Creating Fake Profile of Your Competitor on LinkedIn…Bad Idea

If you think making bad choices on social media is limited to high school students and politicians, you should take a look at AvePoint, Inc. and AvePoint Public Sector, Inc. v. Power Tools, Inc. d/b/a Axceler and Michael X. Burns.

In this Virginia, District Court case, the court refused to dismiss most counts in the complaint brought by AvePoint, Inc. against its software competitor, Axceler.  The complaint alleges that Axceler and its agents made false, defamatory, and deceptive claims and statements regarding Avepoint through both Twitter and LinkedIn, as well as through direct communications with customers and prospective customers.  Specifically, the allegations against Axceler state that the company attempted to confuse customers into falsely believing that (i) AvePoint is a Chinese company, not an American company, (ii)  AvePoint’s software is not made, developed or supported in the U.S., (iii) AvePoint’s software is maintained in India, (iv) that Axceler’s ControlPoint software is “Microsoft recommended” over AvePoint’s DocAve software, (v) AvePoint’s customers are “dumping out of 3 year deals in year 2 to buy Axceler’s ControlPoint, and (vi) Axceler uses its maintenance revenue to improve its customers’ existing products, whereas AvePoint uses its maintenance revenue to develop new products to which its customers have no access.

If all of the allegations are true, it appears the defendant went to remarkable lengths to execute its campaign against the plaintiff.  The complaint alleges that the defendant created an account on LinkedIn for a fictitious AvePoint representative named Jim Chung and, in connection with the account, used the plaintiff’s registered trademark.  Emphasizing the confusion caused by the defendant’s actions, the plaintiff noted Jim Chung’s LinkedIn connection list.  Further, taking full advantage of the opportunities afforded by social media, the defendant’s Regional Vice President of Sales for Western North America, while at the SharePoint conference in Las Vegas, tweeted in regard to the fictitious AvePoint representative, “Just ran into jim chung from avePoint Good guy.” To add further credibility to Jim Chung’s existence, another Axceler employee tweeted, “@MICHAELBURNS Free Jimmy! #Axceler.”

The District Court refused Axceler’s request to dismiss most of the nine counts set out in AvePoint’s complaint.  The counts the court refused to dismiss included defamation, breach of contract (defendant also allegedly acquired trial software from the plaintiff through deceptive means), trademark infringement, false association or false endorsement under the Lanham Act, False Advertisement under the Lanham Act and certain violations of Virginia law.

The court’s full opinion is available here.