The social networking site filed a lawsuit against German site StudiVZ.com July 18 that alleges copyright infringement. But Facebook’s most successful look-alike–and perhaps the ultimate target of its legal ire–could be China’s Xiaonei.com.
Xiaonei closely mimics Palo Alto, Calif.-based Facebook’s blue and white design, and the site’s founder, Wang Xing, told Forbes.com in June that he “borrowed” Facebook’s design when he created the site in 2005.
Xiaonei, whose name means “in the school” in Mandarin, claims to have attracted around 15 million unique visitors last April, compared with StudiVZ’s 6 million registered users. The same month, Xiaonei received $430 million in venture funding from Japanese investment firm Softbank, which sent its valuation into the stratosphere.
Indeed, as Facebook’s audience has grown to more than 80 million users in the U.S., clone sites have sprung up around the world, including Russia and India (see “Facebook’s Foreign Clones”) .
Compared with StudiVZ, Xiaonei has the potential to grab far more users. According to research firm BDA, China has around 220 million Internet users–nearly three times Germany’s entire population. Facebook confirmed its interest in China’s massive user base last month, when it officially launched a Chinese-language site.
By taking on StudiVZ, Facebook may be trying to start small, building a legal precedent before it takes on Xiaonei or other, bigger copycats. “It’s very common for companies to pick off the easier companies first,” says John Dozier, an intellectual property lawyer who specializes in Internet cases. “Then you argue that it’s precedent as you go after the bigger boys.”
At the same time, Dozier adds, taking on Xiaonei wouldn’t be easy. In general, copyright cases involving Web sites can be highly subjective, he says. “This kind of copyright violation is like the legal definition of pornography: You know it when you see it. But it’s different in every case.”
International legal barriers may pose another challenge to Facebook’s attempts to control its intellectual property abroad. Though both Germany and China have signed the Bern Convention, which in theory extends U.S.-style copyright protections to those countries, suing abroad is a costly and time-consuming process, says Gregory Rutchik, head of the Arts and Technology Law Group.
These difficulties could be the reason Facebook has filed a lawsuit against StudiVZ only in California. But filing there means a court would only be able to show copyright infringement in the U.S., not in other countries, Rutchik says. “This shows that even with deep pockets, [Facebook] may lack the strength to really chase people down,” he says. “There’s no way they’re going to win the ultimate fight if they don’t take it to the domestic courts [for the infringing sites].”
Facebook, meanwhile, continues to talk tough. Company spokeswoman Debbie Frost says the company “hasn’t ruled out” taking legal action against StudiVZ in a German court. As for whether the site has its legal sights set on Xiaonei, she added only that Facebook is “studying and evaluating our options with regard to all clone sites, and we are not ruling out legal action.”