Unstoppable Domains asks for injunction against “counterfeit” Handshake .wallet domain

Company argues first to offer second level blockchain domains in a TLD should get exclusive rights to it.

After filing a lawsuit against Gateway.io over the Handshake .wallet domain two weeks ago, Unstoppable Domains has asked the court for a preliminary injunction (pdf) to stop the sale of the competing domains.

In its request, Unstoppable compared the Handshake .wallet domains with having duplicate street addresses:

Imagine that someone attempted to create an alternate universe of street addresses, in which they intentionally sold the address “844 North King Street, Wilmington, DE” to some third party, such that it did not correspond to this courthouse, but to a different location entirely (knowing the address already pointed to this courthouse). Imagine further that when one searched for “844 North King Street, Wilmington, DE” on the internet, the only thing determining which location was revealed to the searcher was the type of computer used to run the search. This is the exact kind of chaos that Defendants are creating with the counterfeit .WALLET domain names that they are offering for sale, despite Plaintiff’s already being the exclusive provider of .WALLET domain names.

Unstoppable noted that on the internet there is a single authority (ICANN) that allocates top level domains, ensuring that there are no name collisions like this. For blockchain domains, it believes the first entity to begin offering a blockchain top level domain to the public should be able to prevent any other entity from running the same extension:

Because there is no central authority ensuring that no two users register the same .WALLET address, and because there is no technical bar to prevent competing registries from offering the same NFT domain name, the NFT domain name registries rely on a first-come, first-served basis for providers of such domain names. That is, once a registry has begun offering a specific NFT top-level domain name such as .WALLET, no other domain name registry can or should register .WALLET domain names. This is similar to how trademarks work – once a company creates restaurants called McDonald’s, no one else should be naming their restaurants McDonald’s.

If Unstoppable’s view was accepted, there would be a rush to begin offering second level domains on alt-root blockchain domains, both from Handshake top level domain owners and competing services. (.Wallet was registered on Handshake before Unstoppable started offering the domain, but it wasn’t made available for other people to register second level domains until later.)

To further bolster its claim, Unstoppable again cites a pending trademark application that will likely not be granted:

To further secure its exclusive rights in the .WALLET domain, Unstoppable filed a trademark application with the U.S. Patent and Trademark Office for its WALLET trademark, U.S. Serial No. 90/886,517, which is currently pending.

The company did not mention that its .wallet application (with the preceding dot) was denied and that the U.S. Patent and Trademark Office sent a non-final action notice to Unstoppable regarding the cited trademark because it doesn’t grant trademarks for top level domains.

Unstoppable Domains also revealed that a registrant of domains under Handshake’s .wallet domains threatened to sue Unstoppable if it sold matching domains in its naming system.

Unstoppable Domains just raised $65 million, and you can expect it to throw a lot of resources at this lawsuit to try to defend its business model.