Company follows through on threats citing a “campaign of chaos”.
Earlier today I wrote about Unstoppable Domains threatening to sue Gateway.io for it offering .wallet top level domain names.
It turns out it followed through with that threat yesterday, filing a federal lawsuit (pdf) in Delaware. It names Gateway.io, which provides technical services for the domain, and its founder James Stevens as defendants. It does not name the registrant of .wallet, even though it’s my understanding that he has been in contact with Unstoppable Domains about the issue.
The lawsuit exposes Unstoppable’s belief that the first to market an alt-root domain name should have rights to it and that name collisions are a big flaw in alt-root domains. It states:
By being the first to make commercial use of the .WALLET mark, Unstoppable Domains has acquired the right to exclude others from using the .WALLET mark, or any similar mark that is likely to cause confusion in the marketplace.
.Wallet was created in Handshake before Unstoppable began offering domains, but it was not offered commercially for registration until after Unstoppable started marketing the domain. Unstoppable says it has grossed $5 million from .wallet registrations.
Some of those customers are apparently distressed by the conflicting domains:
Unstoppable says the defendants are “engaged in a campaign of chaos” while pointing to the issue with all all-root blockchain domain names:
If a cryptocurrency account integrates with both Unstoppable Domains’ .WALLET domain name and Defendants’ .WALLET domain name, the conflict between two conflicting identical .WALLET domain names will result in the mis-routing of some users’ cryptocurrency payments; the only thing determining whether the payment went to the Unstoppable Domains’ version of the domain name or to Defendants’ version of the domain name would be the default settings of the application used to initiate the payment.
The same misdirection can happen when users of Unstoppable Domains’ .WALLET domain name sets up a website – Defendants’ same .WALLET domain name will cause untold website traffic to be misdirected.
And:
Defendants’ actions destroy the reliable functioning of Unstoppable Domains on partner applications by producing duplicate .WALLET domain names, rendering the use of Unstoppable Domains’ .WALLET domains unreliable and hazardous to partners’ users.
By causing chaos in partner applications, the Defendants’ actions injure all customers of these several hundred partner applications. This harms a collective customer base of over ten million customers.
The chaos that Unstoppable refers to will become a bigger issue when ICANN releases the next round of top level domain names. Those domains will be more accessible and many will conflict with Unstoppable’s domains. It’s becoming clearer that Unstoppable believes that if it launches alt-root domains before the next round, it should get some sort of leg up in the process to get those domains.
“Unstoppable Domains is on a mission to decentralize the web.”
LOL. Sure.
How is it “decentralized” to have one company try to corner the market on alternative domain extensions and block legitimate competition…especially when they are not even the first blockchain to offer .wallet?
“It’s becoming clearer that Unstoppable believes that if it launches alt-root domains before the next round, it should get some sort of leg up in the process to get those domains.”
Well, that is not happening. If they want to win the extensions on the normal root that can compete on the free market like everyone else. ICANN is not going to buy this bullshit argument and they will simply roll over them like they did with other alternate root “domains” in the past.
New.net v2.0.
Brad
LMAO they think first to market means they get a trademark rights. They should just be grateful they made 5 mil off their flawed business logic.
The sad thing is, the $5M only comes from .wallet sales. They still sell domains for other extensions.
“How will my investment be protected?” he asks. Sorry bud the ‘investment’ is purely speculative. It’s not any different than holding Terra Luna.
And according to a well-respected crypto youtuber I follow, he once related in a video that UD approached him privately offering to ‘get him his domain’ (i.e. from whoever had already reg’d it). He asked how is it a decentralized domain if you can claw it back from the registrant? ..and closed by saying, “unstoppable domains? … very stoppable”.
It’s important to note (2) things in particular:
-“First to market” is a “subjective designation”
-A “lawsuit filed” doesn’t mean a “lawsuit won”
In reality, the filed lawsuit MAY be one segment of a never-ending train of registrar vs. registrar battles Unstoppable might frequently embark upon. One must ponder whether Gateway’s out-the-gate substantial sales of “.wallet via handshake” has anything to do with Unstoppable’s lawsuit. Having private investors and customers likely places them under immense pressure to act for the sake of controlling the .wallet narrative.
In many respects, the courts MAY view the lawsuit as frivolous based on the sheer fact .wallet via handshake is one of over 5+ million handshake TLDs Gateway has the right to offer via its marketplace. Gateway likely doesn’t choose the TLD. The TLD “owner” chooses Gateway as a service portal. Unstoppable seems to be “sculpting” a narrative they hope will cement the notion .wallet via handshake was maliciously listed.
With the filing of this lawsuit, the looming question is how Unstoppable plans to address the release of .x via handshake, .888 via handshake and other domains they believe are a threat to their business model. Is their lawsuit against Gateway merely an attempt to intimidate the increasing number of registrars offering HNS TLDs? Registrars that include names like Namecheap, Porkbun and Encirca. This is the elephant in the room.
If nothing else, Unstoppable’s lawsuit sets a dangerous precedent for namespace disputes. Those new to the space are watching how this unfolds; and Unstoppable is completely aware of this. Whether they win or lose, they stand to be viewed as the centralized entity that initiated a battle with a service provider in the decentralized namespace. The same namespace they market themselves as leveraging with a centralized touch.
These folks are determined to replicate the entirety of alt-root history, right down to Image Online Design, Inc. v. Core Ass’n, 120 F. Supp. 2d 870 (C.D. Cal. 2000).
We’ve seen this movie before. We know how it ends.
A remarkable tendency of the blockchain domain promoters is a remarkable unfamiliarity with well-trod ground by the alt-root operators in the pre- and early ICANN days. This sort of “trademark claim in a TLD based on first use” was taken out for a spin in court a few times, and failed every time. e.g. Image Online Design, Inc. v. Core Ass’n, 120 F. Supp. 2d 870 (C.D. Cal. 2000)
Other than the limited case of in-house TLDs which are used by an existing brand, the notion of a domain registry owning a trademark right in a TLD offered for general use by others flunks the basic test of “what is a trademark”. A trademark, in the most basic sense, is a signifier of the source or origin of goods or services. The trademark tells a consumer “this stuff comes from the same place as other stuff bearing this mark.” The entire point of offering registration services in a TLD is to provide a mechanism for ANYONE to use the TLD (in combination with their own second-level name) to identify their stuff.
To put it another way – where does stuff having “.com” on it come from? It could come from anywhere. Retail services from Amazon.com comes from Amazon. Retail services from Alibaba.com come from Alibaba. Streaming video from Youtube.com and Netflix.com come from different places. Two things should be obvious from these examples. First, “.com” does not distinguish the source of any goods or services provided from a “.com” address. That is why it was analogized to the “800” in US toll-free telephone numbers in early domain name trademark cases. Second, nobody thinks of “.com” as signifying goods or services emanating from Verisign. While Verisign does indeed run the .com registry, that technical function does not translate into a “.com” trademark for registration services any more than “telephone” worked as a trademark for the Bell System back when the US had a monopoly provider of telephone services.
With at least 6 other blockchains doing domains and the giant binance coming into the play. The only winners here are the lawyers. There are other .wallet domains on other blockchains already gaining clients. Unstoppable goes after the only one that’s on dns? Their trademark clearly states they “resolve on blockchain”. Handshake resolves on dns. I feel this is a ploy to show the UD domain holders “look we did something” when they even acknowledged it’s a very different environment.
The irony here is the flexibility of Handshake, they are pushing Handshakers to leave dns and increase their presence on blockchains. In essence, Unstoppable is inviting closer competition.
This “we were first to sell” garbage is just that ..garbage.
Entrepreneurs often buy domains several years in advance for projects, nothing new here. The fact that UD developers knew about it and discounted it just shows poor planning or low morals. UD was not blindsided. They knew it was coming long before they wrote the first wallet contract.
Another motivating factor is UD is a company not a dao. Wallet domain holders might sue them for deliberately setting this in motion with no pre planned controls in place.
EG: Buy the other blockchain domains just like web2 domain owners buy the same domain on.com,.net and .io, just to cover the spaces. This is standard practice.
music.wallet
UD: $100k .. Handshake $1.99
Handshake is definitely more versatile.
Which one is criminal.
The owner of the Handshake Wallet domain paid tens of thousands for their domain. 11 months before unstoppable domains coded theirs.
To put it in a more intellectual and well researched manner than I’ve seen in the comments here, while the “establishment” around non-alt TLDs and the world wide Internet status quo has it’s issues, “alt” domains and how they operate suck.
On a personal note, I came close a few times to getting one or two, since that what people like us do, but my conviction regarding the above always won out and held me firm.
And “it’s” vs. “its” above only strengthens my point. 😉
And “that” vs. “that’s.” 😉
I think every registrar should get to do a .wallet. Lol honestly tho something needs to be decided one way or the other. All of this is not good for the space. Hopefully there is some clarity at some point instead of everyone looking at a shit show.