This whole Paper debacle is a macrocosm of bullying. It’s not a case of emulation. Nor is it a case of flattery. It’s downright theft. Worst of all, the stealing of the name represents more than theft — it represents a threat to the innovative process as a whole.

Innovation’s greatest enemy is complacency. When a product or service does its job so well that it eliminates competitors, that product immediately becomes vulnerable to complacency. Why fix something that isn’t broken?

But where does this complacency stem from? Startup companies with little corporate structure are the leading force of innovation. With few opinions and a less rigorous decision structure, startups are able to efficiently tackle cutting edge products and services.[1] The inclusion of all major opinions, board members and shareholders into a corporate decision-making structure greatly hinders the chances of innovative ideas seeing the light of day.

This is why Facebook’s Paper[2] app is so detrimental to the system. Facebook represents the corporate-giant thief and Fiftythree represents the startup victim. Stealing Fiftythree’s trademarked name by simply using enormous size and spending power is an undermining of the startup/corporation innovation process. Paper by Fiftythree has been associated with breakthrough design and innovative programming. Now, that same name faces disillusionment. If an App Store venturer types in “Paper”, the once innovative application that changed design on the iPad will now be replaced with a corporate app that hogs your privacy.[3] What gives?

In addition to the “story of the name”, what about dollar-speak? If huge money flows in the direction of the corporate monster who stole a name, does that not also undermine the innovation process? How can startups fund their brilliant ideas if investors know a giant can simply take their brand?

Worst of all, Facebook has been in Fiftythree’s shoes in the past. Facebook has tried to expand its trademark rights over the term “book” and has launched lawsuits against websites and companies who use the word. All the hypocracy aside, Facebook must understand the implications of its now gigantic corporate power. Zuckerberg would have lost his mind had someone threatened his name in the early days of “The Facebook”.

And lastly, what precedent does this set for future startups who want to bring a brilliant idea to market? The fear — the bullying effect — instilled in this Facebook strategy will have a lasting impact on the market if something isn’t changed.

Facebook knows few startups have the power to stand up to its size and spending power. But to use that against a startup is hypocritical, detrimental and enormously consequential.

This also means they are more susceptible to boom and bust cycles. But when they strike oil, they can really strike oil.

Even saying “Facebook’s Paper app” feels wrong. Kind of like “He-Who-Must-Not-Be-Named”.

I suppose the fact that one is made for the iPad and the other made for the iPhone will play a role in an App Store search. However, the association of characteristics to a name or brand is of the utmost importance for marketers. In this case, it’s the thought that counts.