Company Obtains Trademark for ‘Bitcoin’, Sends Infringement Notice to Etsy Seller

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Most people that hear the word Bitcoin may think the name is in the public domain.

It’s all over the news and used by many companies and services. There are even very similar-looking logos in circulation that have become a de facto “brand appearance” for Bitcoin.

But since the developer or developers of Bitcoin are remaining anonymous, there really isn’t a clear or registered first-use entity that owns the rights to the name.

But a company in the UK, A.B.C. IPHoldings South West LLC of London was able to recently obtain a trademark for the ‘Bitcoin’ name in use on clothing and drinks.

Actually searching the UK Intellectual Property Office resulted in even more companies that appear to claim a trademark of the name ‘Bitcoin’ or a derivative of the name in thousands of other product categories and sub-categories.

The US-based The Bitcoin Foundation has long opposed such trademark registrations and helped to successfully squash such attempts with the U.S. Patent and Trademark Office (USPTO).

The organization claims to fight these registration attempts in other jurisdictions as well, but the number of registrations in the UK Intellectual Property Office seems to indicate they are not as successful in that country.

“The Bitcoin Foundation believes that the term “BITCOIN” alone should not be the intellectual property of any individual or entity. Rather, it is a generic term like the terms used for other currencies such as “dollar”, “euro”, “yen”, etc. The Foundation is committed to doing what it can to protect the term “BITCOIN” for public use.”

Statement from The Bitcoin Foundation as posted on their website

In this foundation’s blog post, they go into more detail about the issue of trademarking the name ‘Bitcoin’ and also discuss some differences in trademark registrations between the U.S. and other countries.

However, it does appear there is one application in the USTPO for the trademark ‘Bitcoin’, which was registered on January 11, 2018, and has a Published for Opposition date of May 29, 2018.

On May 29, 2018, USPTO will publish the trademark in the USPTO Official Gazette which starts a 30 day public opposition period. It is during this opposition period that interested parties can file their concerns and try to prevent the final acceptance of the trademark.

This particular trademark application for the name ‘Bitcoin’ is for “Cosmetics in general, including perfumes; Liquid perfumes” and “for Perfume bottles sold empty.

Etsy Seller

On Friday, an Etsy seller on the Bitcoin subreddit asked for some advice from other members of the group about what he should do about a legal notice he received.

The seller listed a link to a letter from A.B.C. IPHoldings South West LLC stating that the seller’s products are in violation of their trademark.

Here is a redacted copy of the letter this seller claims to have received.

In principle, the letter from A.B.C. IPHoldings South West LLC demands the seller stop selling Clothing products with the trademark ‘Bitcoin’, cancel pending orders, stop marketing products, recall items sold to other businesses, deliver infringing inventory to the holding company, provide detail about vendors, and disclose quantities sold and profits made from those sales.

The letter further demands the seller agree to the terms and pay an agreed sum of damages that include the costs of enforcing the infringement action. No actual amounts were listed in the letter.

On Reddit, the seller stated, “So I’ve removed all the bitcoin shirts from my store, which I’m not bothered about since they don’t sell.”

And while he asked advice from other Reddit users, the seller did also say in a response to another posting “Still looking into legal advice regarding this.”

Trolling

This situation appears to be a case of trademark trolling as the holding company’s address traces back to a mailbox.

In trademark trolling, a company or individual obtains a trademark in a jurisdiction where the mark was not registered and then tries to solicit “damages” for trademark infringement.

Usually, the targets are large companies that have the means to actually pay out substantial sums to make these problems go away.

Going after small business operations generally is not particularly profitable for the time and money that has to spend to enforce a trademark infringement situation.

While the infringer usually has to pay expenses to cover the enforcement costs, but how much could be gained from a small or micro business?

The practice of trademark trolling is not as well known as patent trolling. Most trademark infringement claims are settled quietly and both parties move one.

In patent trolling, the issue can be far more problematic as the patent owners go after pieces of a process used by a large company that may be instrumental to their operations.

Google, Apple, Microsoft, and many other tech firms have been hit with patent infringement claims brought by companies that seem to have no other purpose but to own patents and file such cases.

Trademark and patent laws are incredibly complex, especially when they involve multiple jurisdictions with different legal standards. There are international agreements, but again, that still doesn’t solve the complexity of the underlying legal issue.

In the U.S., there is a doctrine of “Date of First Use in Commerce.” which can impact a right holder’s claim on the use of the trademark prior to being granted the trademark.

This can get into deep legal issues of prior user rights versus registered user rights. It’s not a black and white situation of the registrant automatically owning all rights to the use of the name and being able to enforce those rights retroactively or broadly.

A famous example of limitations to trademark rights involves a U.S. case between Nissan Motors (Nissan Jidosha Kabushiki Kaisha TA Nissan Motor Co., Ltd.) and Nissan Computer.

Nissan Computer, named after the founder of the company, Mr. Uzi Nissan, owns the domain nissan.com and was able to successfully defend the use of the domain name.

Nissan Motors owns trademarks related to computer products, mostly as used in automobiles, but that wasn’t enough to give them the exclusive right to name.

Lessons To Remember

The future for many small businesses selling online involves developing and marketing their own branded products.

The large eCommerce retailers, such as Amazon, Walmart, Target, and others, are going to dominate the space selling brand name products.

Even large retailers, well before eCommerce became popular, build their own in-house brands. Walmart with Sam’s Choice, Target with Archer Farms, Macy’s with Alfani, just to name a few.

And Aldi, the German-based but now international grocer, build its business from mostly in-house brands.

Even large consumer brands are increasingly turning to selling products direct to the consumer online, sidestepping distribution supply-chains and retailers.

The story of the Etsy seller allegedly being threatened by a trademark owner that claims to have rights to the name ‘Bitcoin’ in Clothing should be a warning for small businesses.

Regardless of the validity of the claim and the suspicion that the trademark owner is a “trademark troll”, the fact remains the seller has to deal with this legal challenge.

There appears to be a similar to the US first-use doctrine in UK law that may make the case by A.B.C. IPHoldings South West LLC against the Etsy seller unenforceable or extremely difficult to win.

Therefore, even if the seller decides to go to court, such as Uzi Nissan did against Nissan Motors, it becomes a huge distraction and financial drain until the issue is resolved.

It’s a mess that can take years to resolve.

Unfortunately, assuming that a name or object is in the public domain can become a regrettable business decision.

Different jurisdictions may have different views on acceptable use or may unexpectedly grant intellectual property rights to applicants that can lead to legal challenges.

While not a case of trolling, how many people know that the Paris Eiffel Tower and other landmarks and objects enjoy copyright protection, and the owners of the copyrights are actively enforcing their intellectual property rights?

The bottom line is very simple. Build a business on a brand or idea that is original and can be legally protected. Spend time and money to protect the brand.

It’s also important to actively defend one’s intellectual property rights. Marketplaces such as eBay, Amazon, Etsy, all have intellectual property (IP) rights departments that can help protect brands.

Even Google allows brand owners to make claims of infringement to remove search results from infringing content.

In the U.S., and presumably in other countries as well, web hosts have to take IP complaints seriously and may be required by law to remove access to the infringing material.

Ironically, successful patent and trademark trolling depends on this legal requirement to defend one’s intellectual property. Because if a rights owner does not defend it, a claim or case can be weakened or dismissed.

Branding is more than just marketing, it’s the foundation of a successful long-term business.

Note: This article does not try to provide legal advice or opinion. Always consult a legal professional when dealing with complex intellectual property rights issues. Etsy is not named in the alleged claim by A.B.C. IPHoldings South West LLC against one of its sellers. The Etsy seller is only known by his Reddit username; SamuelHunt.

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