I'd be interested to see how FiftyThree proves damages in this case, and whether or not the judge will make a call for the punitive damages.
I definitely think that there's no doubt about it: the FiftyThree Paper sales will certainly take a hit, and the brand is diluted hugely, especially for those who haven't encountered it yet.
This was obviously a conversation that Facebook had, and chose to do it anyway - not sure exactly what the result of the conversation was internally, but it almost certainly had to have some phrase like "well, if they sue us, we can handle it."