Cryptocurrency is a form of digital currency with no central issuing or regulatory authority, and instead uses a decentralized system to record transactions and manage the issuance of new units, and relies on cryptography to prevent counterfeiting and fraudulent transactions. Not an entirely new asset (the first cryptocurrency, eCash, created way back in 1990), the increasing acceptance of currencies like Bitcoin and Ether, for example, have brought crypto into the mainstream and made the interplay between these digital assets and brands an increasingly important topic .
No longer a niche market, the global cryptocurrency market reached $1.49 billion in 2020 and is expected to reach $4.94 billion by 2030, according to Cryptocurrency Market Outlook data. With an expected compound annual growth rate of 12.8 percent between 2021 and 2030, the continued growth of the crypto market will be supported by the increased use of distributed ledger technology and rising digital investments in venture capital. At the same time, blockchain technology offers decentralized, fast, transparent and reliable ways to conduct financial transactions and makes it easier for companies to offer quality services to consumers around the world.
With widespread adoption of crypto around the world (top countries when it comes to their share of cryptocurrency owners are the US (46 million), India (27 million), Pakistan (26 million), Nigeria (22 million) and Vietnam (20 million), according to stats compiled by TripleA) has seen an increase in companies turning to relevant trademark offices to collect registrations for their trademark related to the digital world – although not without in some cases Challenges.
Existing classes of goods/services explicitly extend to cryptocurrencies and related services. For example, crypto is placed in Class 9 (hardware wallets for cryptocurrencies, hardware for mining cryptocurrencies, etc.), Class 36 (financial exchanges, such as , etc.). And there’s no shortage of companies listing these classes in the context of crypto-related applications they’ve filed with the United States Patent and Trademark Office (“USPTO”). The latest data on the matter, coming from Intellectual Property Attorney Mike Kondoudis, shows that as of August 31, individuals and companies have filed more than 3,600 applications for trademarks for cryptocurrencies and crypto-related services with the USPTO, up from 3,516 applications in the whole year 2021.
(It’s worth noting that while the US and European Union trademark systems are “somewhat adaptable” to emerging technologies in the US and European Union, some other countries, including China, are struggling to collect registrations in light of a lack of specific provisions for cryptocurrencies (and other categories related to virtual goods/services).
The rapid growth in the popularity of cryptocurrencies and associated applications for crypto-focused brands is not without its problems, leading to emerging branding issues related to the crypto market, many of which are centered on the following questions…
Is cryptocurrency some kind of product or service?
One of the central problems arises from the fact that trademark protection in its traditional form only covers products and services, while cryptocurrencies are understood more as a medium of exchange. Although cryptocurrencies themselves cannot be registered as a product or service, the coin name can still be trademarked as: Class 36 financial services, for example: “Financial services, namely, providing a virtual currency for use by members of an online community via a global computer network;” or Class 42 as Software as a Service (“SAAS”), for example: “SAAS services featuring software for the clearing, attribution, compliance, recording and settlement of trades relating to bitcoins.”
Additionally, cryptocurrency-related advisory services may be classified in Class 36 as “financial advisory services” while “educational articles, videos, blogs or lectures about cryptocurrency” are classified in Class 41 as “educational and/or entertainment services.” ”
Can a crypto’s name be a source identifier even if the source is unknown?
As indicators of origin, brands identify a single source of goods/services, which contradicts the key logic behind cryptocurrencies. Because cryptocurrencies are generated through blockchain technology, they are fundamentally characterized by the lack of any central control or ownership. Bitcoin, for example, is a decentralized cryptocurrency — hence the controversy surrounding its trademark registration. However, when a currency is centralized, the chances of it being considered a brand can increase because it comes from and is distributed from a single known source.
Does it include creative elements to establish a degree of distinctiveness?
As with other forms of trademarks, the most important criterion is to ensure that a cryptocurrency-related trademark is distinctive. In other words, the mark should not reflect an already registered mark in a similar field and not only be descriptive. One of the most cited examples of this is of course Bitcoin. In 2016, BitFlyer, Inc. applied for registration of the word “BITCOIN” for use in connection with “computer programs used in the field of electronic commerce transactions; computer programs; electronic machines and apparatus; Telecommunications machinery and apparatus.” In a filing, a USPTO examining attorney refused registration of the mark on the grounds that it was descriptive of the goods/services in question “as used in connection with electronic commerce transactions involving bitcoin is used”.
At the same time, the USPTO attorney also challenged BitFlyer’s now-abandoned application, claiming that “the applied mark is not only descriptive, but also appears to be generic in connection with the identified services and is therefore inoperable as a source identifier for.” [BitFlyer’s] Services.” However, as this (and the fate of other crypto brands) is subject to subjective analysis, some countries have registered “Bitcoin” as a legitimate trademark, such as the UK Patent Office and the Spanish Patent and Trademark Office.
Igor Demcak is CEO and Head of Legal at Trama, a trademark and brand protection law firm.