Author – Chitwandeep Kaur and Naman Jain
INTRODUCTION
Blockchain is a form of distributed ledger technology, which creates a secure, transparent record of every transaction and reports the transactions undertaken to everyone on the blockchain platform[1]. While copyright is automatically awarded when a work is created under civil law, other intellectual property rights such as patents, trademarks, and designs must be obtained through a registration process. The procedure of registering an IP right is often time-consuming and expensive. Furthermore, registration usually only allows the right holder to enforce his or her intellectual property rights in the nation where the intellectual property right is registered. Given the worldwide nature of trade, this restriction is insufficient to meet the interests of right holders, especially given the modern economic system’s fast-paced commercial existence. Blockchain technology could once again be the key to unlocking IP rights by making the registration procedure much quicker, faster, and less expensive, easing the procedural and enforcement burdens experienced by IP right holders. Even while blockchain technology has a lot of potential and might deliver a lot of benefits, it still has certain issues. In this post, we’ll look at some of the difficulties that come up when dealing with trademark registration for blockchain-based technologies.
BLOCKCHAIN AND DIGITAL CURRENCY
Blockchain is an electronic distributed ledger of entries that is maintained by multiple users via a network of computers[2]. In 2009, this technology was implemented for online financial transactions. The concept of Crypto was born in 2008, when Satoshi Nakamoto, the anonymous founder of Bitcoin, published an article titled “Bitcoin: A Peer-to-Peer Electronic Cash System.” Bitcoin has the potential to be widely used in a variety of industries, including finance, energy, health care, transportation, and cybersecurity. Blockchain technology is used in the creation of digital currencies such as Bitcoin and Ethereum. The current state of blockchain technology entails sophisticated processes that enable the development of blockchain-based apps, as well as novel technology such as smart contracts that rely on blockchain to validate transactions.
Virtual currency is a digital representation of a value that may be digitally traded and is used as a medium of exchange, unit of account, or store of value. The distributed ledger or blockchain technology is used to create virtual currencies, coins, and tokens. Similarly, cryptocurrencies give goods intrinsic worth that may be used for purchases, sales, and other financial activities.
As a result, virtual currencies or cryptocurrencies are being developed to replace some of the established currencies and perform similar financial functions without receiving official government recognition or being recognised as legal tender. They are usually issued by a virtual organisation or a capital raising entity. A virtual organisation is one that is embodied in computer code and can be executed on a distributed ledger or blockchain.
TRADEMARK AND BLOCKCHAIN BASED TECHNOLOGY
A trademark is a word, label, symbol, or other graphic representation that can be used to distinguish one company’s goods and services from those of another[3]. The laws in the United States includes ‘cryptocurrency’ with utmost certainty in its Trademark ID Manual for bringing different classes of goods and services under its purview, such as within Class 9 (cryptocurrency hardware wallets, hardware for cryptocurrency mining, etc.), Class 36 (financial exchange, such as cryptocurrency payment processing, cryptocurrency trading service, etc.), Class 42 (online cryptocurrency wallet, etc.), other jurisdictions suffer from being left out[4].
As a result, in order to bring cryptocurrency within the purview of any trademark legislation, a few questions must be answered affirmatively:
- Can cryptocurrency be classified as a product or service?
- Is it distinguishable through the use of logos, words, symbols, or a combination of these elements?
- Is the name of the cryptocurrency used to identify the source of its creation?
The first answer’s question could be subjective. Consider the case of Alibaba Group Holding Ltd. vs. Alibabacoin Foundation, in which the Federal District Court determined that a cryptocurrency can be regarded a good capable of bearing its own trademark. It is important to note, however, that when cryptocurrency is used in the same way as traditional currency, it may not be considered a good or service because it will simply serve as a medium of exchange for the value it contains. It may act as a good or service if it is used for a very specific purpose different than what currency can give.
If it is established that a certain type of cryptocurrency can be classified as a good or service, the answers to the following two questions may be taken into account. It can act as a trademark when the cryptocurrency aids in identifying the single source from which it originates by associating with a specific symbol, logo, or name. Because Bitcoin is a decentralised cryptocurrency that does not originate from a single source, it may not be considered a trademark. When a money is centralised, however, the likelihood of it being designated a trademark rises because it is created and disseminated by a single known source.
Furthermore, it should not be generic to the category of goods or services being pursued in order to generate a distinct image in the minds of the general public. Because of this, the US District Court in Telegram Messenger Inc. vs. Lantah LLC prohibited the defendants from using the name “gramme” for their cryptocurrency brand because it was similar to the plaintiff’s trademark of the “Gram” word mark and image.
Consider the case where the identity of the cryptocurrency is conceived in the minds of the consuming public in terms of only the type of cryptocurrency that can be used to buy real estate in Australia (a fictional ‘AusieCoin’), in which case, rather than identifying the source of the company distributing the ‘AusieCoin,’ it risks being deemed the generic name of that type of digital currency. However, because this is a matter of subjective opinion, some nations, such as the United Kingdom Patent Office (TM No. UK00003279106) and the Spanish Patent and Trademark Office (Trademark Number: ES003279106), have registered ‘Bitcoin’ as a genuine trademark.
Due to its drive to change, cryptocurrency has taken many different forms. Since the introduction of bitcoins, other variations have appeared in the form of ‘alt-coins,’ which are alternatives of differing degrees and can take on a variety of other forms. With new generation blockchains like Neo and Ethereum, the world of cryptocurrencies becomes significantly more complicated. Because bitcoin is so diverse and difficult to regulate, no single person or institution can claim ownership or responsibility for it; as a result, there appears to be little chance of protecting any Intellectual Property Rights (IPRs) in community-based blockchains.
DISPUTES ARISING DUE TO ABSENCE OF TRADEMARK PROTECTION FOR CRYPTOCURRENCIES
The lack of trademark protection granted to cryptocurrency providers has raised serious concerns about the more recent aspects of such technology. The market’s wide range of cryptocurrency has broadened the scope for which laws and regulations can be applied. One major issue with cryptocurrencies and their unregulated, unregistered use is that a user may come across various cryptocurrency providers engaged in bitcoin buying and selling across the internet. Such a user may be vulnerable to bogus cryptocurrency providers and may initiate an exchange involving real money with the fraudulent website.
The individual discovers the fraud committed after completing the transaction, but there are no remedies available to the user. If a user is defrauded in a similar manner while conducting regular financial transactions, the original trademark owner can immediately enjoin the defrauder from further tarnishing the brand’s reputation. Due to the lack of trademark protection granted to cryptocurrency firms in India and around the world, it is difficult to injunct such fraudulent websites under trademark law. Furthermore, when such fraud involves generic terms like Blockchain and Bitcoin, trademark law cannot be used to protect users from passing off and fraud because no single person can claim trademark protection as the owner of the mark.
This situation is exacerbated by the fact that there is no other regulation in India that specifically addresses cryptocurrency and blockchain. Businesses have also begun to use the terms “Bitcoin” and “Blockchain” for purposes other than cryptocurrency, as evidenced by the UK registered trademark of Bitcoin. Because such terms are well-known, such businesses profit. However, due to the lack of locus, no action can be taken against such businesses under the Trade Marks Act[5]. The need of the hour is to find ways to grant cryptocurrencies trademark protection and further protect users from fraudulent blockchain, bitcoin, and other cryptocurrency providers.
Furthermore, various cryptocurrencies with deceptively similar names to Bitcoin, such as “Baitcoin,” are on the rise, leading users to invest in such currencies believing they are investing in the well-known Bitcoin. Due to the lack of trademark protection, Bitcoin, as an unregistered mark, cannot protect its goodwill and reputation.
Although blockchain technology has the potential to revolutionise the application of intellectual property law, there are some potential roadblocks. Because there is currently no universal standard for brand protection and intellectual property rights, potential conflicts between countries may arise. Furthermore, the blockchain does not necessarily provide an integrity check on the original information entered—it only ensures that this data has not been compromised or altered. To begin, some internal trust must be built between the parties to ensure that there are no underlying questions about the original information that initiated the blockchain.
BLOCKCHAIN RECOGNITION & GOVERNMENT INITIATIVE IN INDIA
In recent years, the Indian government has expressed a strong desire to transform its economy into a digital economy. The government has taken a number of steps to adopt and improve the use of cutting-edge technology. As the Government of India’s premier think tank, the National Institution for Transforming India (NITI) Aayog provides critical knowledge, innovation, and entrepreneurial support to the country. It is investigating the use of blockchain and artificial intelligence (AI) in a variety of fields, including education, healthcare, agriculture, electricity distribution, and land records. The institution is investigating a platform called ‘IndiaChain,’ which is a blockchain-enabled infrastructure for Indian business and government[6].
This will be the world’s largest blockchain implementation programme in governance once it is completed. Furthermore, in June 2018, NITI Aayog released a discussion paper on the National Strategy for Artificial Intelligence, which envisions the establishment of a decentralised data marketplace based on blockchain technology.
Aside from the Union Government’s commendable initiatives, state governments have shown a strong interest in adopting blockchain technologies for digital transformation in governance.
States such as Maharashtra, Andhra Pradesh, Telangana, Karnataka, and Kerala are investigating the use of distributed ledger technologies for their e-governance initiatives. The National Association of Software and Services Companies (NASSCOM), India’s apex body for the IT BPM industry, recently signed an agreement with a blockchain research institute to promote the blockchain ecosystem in the country.
CONCLUSION
Blockchain creates a new and simpler level of the entitlement system, giving users a modern tool that does not replace, but rather supplements, the existing system. However, many issues must be resolved before blockchain can be successfully used and developed as a tool for copyright protection in Russia. First and foremost, there is the legal recognition of blockchain, as well as the possibility of using it in various areas of the economy and government. Eventually, legislation will address potential barriers to the widespread legal use of this technology, such as issues of applicable law and jurisdiction, the implementation of smart rights, data security and confidentiality, the existence of reliable rules, and the conceptual framework for smart contr
[1] Blockchain: Transforming the registration of IP rights and strengthening the protection of unregistered IP rights July 20, 20 By Anne Rose, Associate and Co-Lead of the Blockchain Group, Mishcon de Reya, London, Englandhttps://www.wipo.int/wipo_magazine_digital/en/2020/article_0002.html Accessed on 18-02-2022
[2] Ibid
[3] Blockchain technology: could it be a powerful tool for trademark offices and brand owners in the trademark application process? by HSSIPM | Mar 4, 2021, https://hssipm.com/2021/03/04/blockchain-technology-could-it-be-a-powerful-tool-for-trademark-offices-and-brand-owners-in-the-trademark-application-process/ Accessed on 18-02-2022
[4] https://www.wsj.com/articles/dogecoin-copycats-trademark-fight-erupts-over-joke-crypto-worth-billions-11631638106?mod=itp_wsj&mod=djemITP_h
[5] Timely Trademarks Are Important to Crypto: Dogecoin Disputes Illustrate Potential Naming Issues
By James E. Rosini & Christopher Gresalfi on October 7, 2021 https://www.blockchainlegalresource.com/2021/10/timely-trademarks-are-important-to-crypto-dogecoin-disputes-illustrate-potential-naming-issues/ Accessed on 19-02-2022.
[6] http://pib.nic.in/newsite/PrintRelease.aspx?relid=173334
