Cryptocurrency has piqued curiosity around the world, with some calling it “the future of money.” Even though cryptocurrencies cannot be used in the same way as traditional money at the current moment, they are kept as investments in the hopes that their value will rise as adoption grows. As a result, financial institutions frequently refer to it as a “crypto-asset.” Cryptocurrency has its financial market, with companies like Facebook and Samsung announcing plans to build their versions of cryptocurrency to participate in it.
Many people have been intrigued by this ground-breaking technology since the triumph of ‘BITCOIN,’ the world’s most popular cryptocurrency. Nike has secured a trademark for their cryptocurrency, nicknamed “crypto sneakers,” in the United States.
Blockchain technology makes bitcoin transactions easier by allowing them to be recorded in a secure, protected ledger utilizing a networked database structure protected by hashing power. Permanent, irrevocable, and anonymous transactions avoid the use of middlemen while being transparent and unaffected. Bitcoin transactions are made easier by blockchain technology, which allows them to be recorded in a secure, protected ledger using a networked database structure protected by hashing power. Transactions that are permanent, irreversible, and anonymous prevent the use of middlemen while being transparent and unaffected. Cryptocurrencies were established to replace some of the existing currencies and to do similar financial duties without the need for government approval or legal recognition. They are usually issued by a virtual corporation or a capital-raising entity. A virtual organization is represented by computer code and can be run on a blockchain or distributed ledger.
WHAT IS CRYPTOCURRENCY?
Cryptocurrency is a sort of virtual currency that combines cryptography for security and a decentralized ledger to record transactions. Unlike a physical note or coin issued by the government, it only exists in digital form. It is represented by a computer code that can be modified to include a wide range of rights and responsibilities to perform tasks other than serving as a payment or exchange medium. It can be used to provide digital access to a product, app, or service, as well as to reflect real-world asset interests.
Furthermore, unlike traditional currencies, Bitcoin is not created or distributed by a central authority. Instead, it’s a network of computers that performs computations while also maintaining a digital record of transactions. As a result, the freshly created currency receives a reward.
The first step forward in the cryptocurrency era was the introduction of Bitcoin, which was first discussed in a white paper in 2008 and then realized in 2009. Since then, there have been nearly 2500 cryptocurrencies. A few well-known cryptocurrencies with distinct trademarks are Ethereum, Litecoin, Ripple, Zcash, Dash, and Monero.
IS IT POSSIBLE TO PROTECT CRYPTOCURRENCIES UNDER TRADEMARK LAW?
In 2016, BitFlyer, Inc. applied for a trademark to register the term “BITCOIN” for use as “computer programs used in the field of electronic commerce transactions; computer programs; electronic machines and apparatus; telecommunication machines and apparatus,” but the USPTO declined the application. According to the USPTO, the word was solely descriptive of the subject matter and qualities of the applicant’s products. In 2018, the USPTO refused a trademark application for the word BITCOIN, finding that the mark was merely descriptive of the subject matter and a feature of the applicant’s services.
In addition, the mark ‘OMNICOIN’ was registered in the United States in Class 36 for “cryptocurrency, namely, providing a virtual currency for use by members of an online community via a global computer network; cryptocurrency, namely, a peer-to-peer digital currency, incorporating cryptographic protocols, operating over the internet, and used as a method of payment for goods and services; cryptocurrency, namely, a peer-to-peer digital currency, incorporating cryptographic protocols According to Class 36, “cryptocurrency is essentially a peer-to-peer digital currency that combines cryptographic protocols, runs via the internet, and is used as a form of payment for products and services.”
In June 2020, the Spanish Patents and Trademark Office, like the UK, granted Trademark Protection to M4046141, a Bitcoin salesperson involved in buying and selling bitcoin. Because Bitcoin and Blockchain are open-source technology that anybody can use to supply cryptocurrency services, such a grant of Trademark Rights for the name “BITCOIN” has been criticized around the world.
The United States is expected to be the first jurisdiction to see an increase in case law relating to trademark law and cryptocurrencies, especially since it began allowing bitcoin names to be registered.
In Alibaba Group Holding Ltd vs. Alibabacoin Foundation, the plaintiff sought a preliminary injunction against the defendants for trademark infringement as a new cryptocurrency, Alibabacoin. They requested an injunction prohibiting the use of the term Alibaba Coin to refer to their cryptocurrency until the litigation was settled.
The US District Court for the Southern District of New York granted the preliminary injunction, and the defendants’ motion to dismiss the complaint was denied. Alibaba had plainly said that it would never engage in the cryptocurrency industry and, as a result, had lost its right to use its cryptocurrency trademark, according to one of the defendants’ primary arguments. After determining that Alibaba had established a likelihood of success on the merits of its trademark infringement claim, the Court dismissed this argument, noting that “accepting this view of abandonment would render American trademark law largely ineffective,” and granted Alibaba a preliminary injunction. The defendants also used the mark “in combination with their online business activities,” indicating that the mark was utilized in commerce as a good or service, according to the Court.
In Telegram Messenger Inc. vs. Lantah LLC, the US District Court for the Northern District of California granted a preliminary injunction prohibiting the defendant from using the term “Gram” for its cryptocurrency brand because it was confusingly similar to the plaintiff’s trademark “Gram,” which was a pending registration at the USPTO for “financial services, namely, providing a virtual currency for use by members of an online co-op.”
In the case of West vs. McEnery, the Southern District Court of New York issued a default judgment in favor of Kanye West, ordering the defendants to stop using the name “Coinye West” as a trademark for their cryptocurrency enterprise.
Cryptocurrency has taken on many different shapes as a result of its desire to evolve. Since the launch of bitcoins, various variations have emerged in the form of ‘alt-coins,’ which are varying degrees of alternatives that can take on a variety of other forms. The world of cryptocurrency is becoming substantially more challenging with next-generation blockchains like Neo and Ethereum. Because bitcoin is so diverse and difficult to govern, no single person or organization can claim ownership or responsibility for it; as a result, community-based blockchains appear to have little prospect of preserving intellectual property rights (IPRs).
THE DRAWBACKS OF NOT GRANTING TRADEMARK PROTECTION TO CRYPTOCURRENCY
Failure to ascribe trademark ownership could result in a host of issues arising from the incorrect implementation of such technology. Consider the example of a normal internet user who is curious about cryptocurrencies and wants to buy some. He decides to buy bitcoins from a person who is actively promoting the currency’s sale while also acting as a fraudulent investor after considering his options. The proprietor cannot prevent anyone acting in such a fraudulent capacity from harming the cryptocurrency brand’s image because the aforementioned cryptocurrency is not held and protected under trademark law.
If the client fails to prevent the foregoing behavior, he or she may face unjustified difficulties due to a lack of available remedies. Furthermore, terminology like ‘Bitcoin’ and ‘Blockchain’ has become increasingly prominent, making it easy to use similar terms for other goods or services without breaking the law. As a result, it’s vital to figure out how to protect cryptocurrencies so that clients aren’t fooled by various cryptocurrency providers and the reputations of recognized providers aren’t destroyed.
As a result, assigning collaborative authorship to owners in the form of ‘collective marks’ is a viable alternative to a sole proprietorship in the context of such technologies. The same would protect consumers from deceit while also resolving the decentralized control challenge. However, this is not a problem-free method because determining true trademark ownership might be difficult.
In recent years, cryptocurrency has increased in popularity, allowing consumers to receive and send payments that are not limited to a single currency. Such technology has the potential to disrupt and revolutionize the way we do business. However, a plethora of regulatory and legal challenges around bitcoin continue to plague the world as a whole.
Many heavyweights, like Facebook, Samsung, and Nike, are racing to join the cryptocurrency race to supply bitcoin outlets. As a result, as previously indicated, technological improvements in the field of cryptocurrencies have created new challenges and difficulties that must be addressed through regulatory and legislative changes.
To begin with, cryptocurrencies, as well as the other varieties of cryptocurrencies that may emerge, must be assigned a place in the Nice Classification. As a result, to establish new jurisprudence, recognition must take the form of law. Additionally, while a legal framework in the targeted member state is being developed, Bitcoin should seek Trademark Protection in countries that allow it to strengthen its claim over the use of a certain mark, work, or logo. Finally, amending trademark laws may look ambitious in countries where bitcoin has been outright banned due to its harmful effects on morals and public policy (for example, India). Such countries will not give protection against third-party deception and misrepresentation. As a result, any technology must endure the test of time before we can decide the appropriate course of action for dealing with the hazards posed by bitcoin use.