Tinder IPO runs into Tinder® Crowd-Funded Lawsuit

Tinder (Tomasso Boddi / Getty)
Tomasso Boddi / Getty
Newport Beach, CA

With the Tinder double-opt-in Internet dating app valued at up to $5 billion in advance of its initial public offering on the stock market (IPO), little WildFireWeb, which owns the “Tinder®” federal registration mark, has launched a crowd-funded effort to raise hundreds of thousands of dollars to fund a lawsuit that could potentially be worth hundreds of millions of dollars.

WildFireWeb developed its Tinder® mark and graphic in 2007, has conducted business under the Tinder name and logo since February 2010, and obtained a U.S. Federal trademark registration in July 2011. “Tinder, Inc.” started using the name “Tinder” in August 2012 for its dating application, as well as for its website at http://gotinder.com, and did not obtain a U.S. Federal trademark registration until February 2014.

Business litigation has traditionally favored the party with deep pockets, because the rules of the federal court seem structured to maximize costs. WildFireWeb is reportedly a tiny player with under $500,000 in revenue, competing in the content management system industry dominated by behemoths like WordPress®, Joomla® and Drupal®.

But the upside rewards for Tinder® filing a lawsuit changed dramatically on October 16. when parent company IAC/InterActiveCorp (IACI-NASDAQ) announced in a Securities and Exchange Commission filing the spin off and initial public offering (IPO) of their West Hollywood “Tinder Match Group,” composed of 45 branded dating sites.

The virally popular Tinder dating app recently went from being a free-download and a free-use site, to offering differentiated services for paying and non-paying users. Tinder Match, has become extremely profitable with a projected $1 billion in revenue and net income of $177 million for 2015, according to the regulatory “S-1” filing.

The Tinder dating app gathers info from customers’ Facebook profiles and finds potentially compatible matches by traits such as gender, age range, and geographic location. The user is presented a potential match’s photos and profile, then swipes left if interested. If the “swiped” user is interested, he or she swipes right and the mutually interested parties can start communicating with each other.

With cash equaling debt, the S-1 disclosure statement used a wildly conservative valuation for Tinder Match of just $1.3 billion. But last year, Bloomberg reported 10 percent of Tinder sold for $500 million, which would indicate a $5 billion valuation.

Analysts are very optimistic that Tinder’s monetization strategy will continue to boom on recurring subscriptions and advertising, as the company rapidly moves up from focusing on the under-30 crowd to ‘Tinder Plus’ that focuses on over 30 year olds that have much more disposable income to spend.

With financing the key to the success of almost any lawsuit, WildFireWeb would have had no realistic capability to battle on its own over the Tinder® trademark infringement against a hot “Silicon Beach” tech company and its huge corporate daddy, which have virtually unlimited access to legal resources.

But WildFireWeb is now crowdfunding through Indiegogo for donations to help level the playing field for Tinder® against Tinder, Inc. and IAC Interactive Corp.’s deep pockets.

Tinder, Inc. filed a court opposition to the Tinder® complaint stating that the lawsuit is an “attempt by a company that operates in a wholly different market from Defendant, with different customers, for profit from the growth and success of a popular company.”