A dispute between blockchain domain name owners is a preview of what’s to come.
Blockchain domain name company Unstoppable Domains has threatened to sue a Handshake domain name service for offering registrations under the .wallet Handshake domain name.
The company sent a cease & desist letter (PDF) to Gateway.io, a company that acts as a registry and registrar for Handshake domain names, earlier this month.
Unlike other blockchain domain systems that only offer second level registrations, Handshake allows people to register alt-root top level domains. The registrants of those top level domains can then offer second level domain names. The owner of the Handshake .wallet top level domain offers second level domains through Gateway.io.
In its demand letter, Unstoppable Domains states:
…As we know you are aware, Unstoppable Domains has sold .wallet top level domain names for over a year. Unstoppable Domains therefore possesses trademark rights in the .wallet top level domain name (see U.S. Serial No. 90/886,517). Yet in flagrant disregard of Unstoppable Domains’ clearly established rights, a third-party (“Wallet”) and (sic) has recently begun to offer their own .wallet top level domain names for sale…
The registrant of .wallet created the Handshake domain on July 31, 2020. Unstoppable Domains began offering its own .wallet domains in summer 2021.
U.S. Serial No. 90/886,517 is an intent-to-use trademark application for “wallet”. Unstoppable filed the application in August 2021. Like most of Unstoppable Domains’ other attempts to trademark top level domains, the U.S. Patent and Trademark Office has so far declined to grant the trademark because it doesn’t grant trademarks for top level domains. It sent a non-final action notice in May before Unstoppable sent the cease & desist letter.
The trademark office previously refused an Unstoppable Domains trademark application for “.wallet” with a preceding dot. The office has refused all of Unstoppable’s TLD applications except for “dweb” and “defi” without dots. While the applications were allowed, Unstoppable has yet to submit specimens of use. A specimen containing a dot or use as a top level domain would likely not be accepted.
Unstoppable has also filed trademark applications in Canada.
All of this points to an ongoing issue with alt-root blockchain domain names: name collisions. If people can own a .wallet address in Unstoppable Domains and Handshake, there will be confusion between the two domains. In the C&D, Unstoppable noted:
Additionally, the unapproved use of the .wallet top level domain name will create numerous conflicts and interference with the thousands of existing .wallet top level domain name owners. This will have a profound effect on both Unstoppable Domains’ users, and on Unstoppable Domains itself, and constitutes both tortious interference with Unstoppable Domains’ business relations and unfair competition.
This issue will be exacerbated when ICANN launches its next round of top level domain names. Any domain released in the main ICANN root will be accessible on popular web browsers, making them instantly more accessible than blockchain domains that require special browsers, plugins, or other workarounds to access.
And many of Unstoppable Domains’ top level domains are sure to be contested in the next round of applications: .crypto, .nft, and .blockchain, for example.
Unstoppable’s trademark applications are likely a way to get in front of the growing number of competing blockchain domain initiatives and ICANN’s next round. It seems to be an effort to claim rights that would block other applicants.
In the last round, trademark frontrunners filed for trademarks in various jurisdictions and then tried to claim sole rights to the corresponding new extensions. Those efforts failed.
On Domain Name Wire Podcast #224 (February 2019), I asked Unstoppable Domains founder Matthew Gould about the conflict with future ICANN domains:
Domain Name Wire: …it’s a pretty good bet that dot crypto will be one of the top, most applied for names in the next round if it’s anything like the current round. I mean, so at that point then, and I know you’re looking at doing a community application, but you know, community applications are, as we saw in the last round, there could be several, right. And there could be a fight over that. I mean, there’s a good chance that we come into a situation where either you need to pay a lot of money to get .crypto through ICANN, or you have .crypto in your blockchain root and there’s a .crypto in the main route.
Gould: Yeah. I mean, I would just say that we’ll try to figure it out once we get to that point, with ICANN. And I think that taking the worst case scenario here, you know, I’ve got to be an optimist, like I’m a small business, startup founder. And I think that we’re headed in the right direction here. And you know, I think that also previous rejections for TLD reservations like you mentioned with trademarks, were rejected on the basis that they did not have an existing or functioning naming service. And that is not going be the case with us because we’re actually going to have an existing and functioning naming service. So at least on the trademark side, we feel pretty comfortable that we’re going to be protected going into that fight. And we’re also willing to fight for it. One more thing I will add to that is it’s very likely that we’ll end up finding a partner in the industry to work with us on a lot of these TLDs. And there’s a possibility that it’ll make a lot more sense for us to work together on the launch of a TLD like .crypto on ICANN than it will to fight about that type of TLD.
Unstoppable Domains is demanding that Gateway deactivate .wallet domains, stop selling the domains, and provide information about the registrant of the .wallet Handshake domain.
This could be a test case for what will surely be a future of name collisions between alt-roots and, ultimately, the existing main root.
I reached out to Unstoppable Domains on Monday for a comment, but have not heard back at publication time.