Fight escalates between Unstoppable Domains and Handshake.
Blockchain domain name company Unstoppable Domains and the owner of .wallet in the rival Handshake system have sued each other.
The lawsuits come on the heels of Unstoppable Domains’ lawsuit against Gateway Registry and its owner. Unstoppable sued those parties after Gateway started offering .wallet registrations in Handshake.
Gateway was operating as a registry/registrar for Wallet Inc. and the Handshake domain’s owner, Scott Florcsk. Unstoppable didn’t name Florsck and Wallet Inc. in that suit, but Florsck later filed to intervene.
Florsck’s lawsuit (pdf) asks for Declaratory Judgment that he is not infringing Unstoppable’s rights, unfair competition, and violation of the Sherman Antitrust Act.
His lawsuit reiterates many of the arguments in his motion to intervene. In addition to pointing out Unstoppable’s failed attempts to get trademarks for top level domains, a key argument is that people won’t confuse matching domains in different blockchains because you can only access one blockchain at a time.
Unstoppable’s lawsuit (pdf) names both Florsck and Wallet Inc. It asks for findings of common law trademark infringement, unfair competition, and intentional interference with contractual relations and with prospective business relationships.
The company points to its unregistered trademark rights in the U.S. but also says it has registered rights in the European Union and Japan. (This is news to me. The company has repeatedly failed to get trademarks in the U.S. Last year, it expanded its attempts to get trademarks to Canada.)
At NamesCon earlier this month, Unstoppable Domains CEO Brad Kam said he believes there cannot be matching blockchain domains in different systems for blockchain domains to work. As for who should get exclusive rights to run a TLD, Kam stated:
It’s the same as it would be for any IP. So essentially what happens is you have first commercial use, you have market penetration…you have all the same reasons why you can’t launch McDonald’s restaurant is the same reason.
Both suits were filed in U.S. District Court in Delaware.
After the suits were filed, Unstoppable Domains asked the court to not let Florsck intervene in the first case. Florsck’s attorneys responded to that request by saying they still think it’s important to intervene.
So what would happen if there were another domain to come up as an issue and it’s out of the US jurisdiction? Then what? He can’t make claim to owning the generic word out right.
David Michaels says
While I haven’t examined all of the issues, it seems that Scott FLORCSK’s property rights might be better received in a court within the 9th circuit, such as in California where the defendant has offices, in Las Vegas, it’s principal office, or in Washington state, where Scott is harmed by Unstoppable’s unfair competition and interference with business relations.
“97. Defendant’s unfair business practices include use of the legal process
for the anti-competitive purpose of threatening and/or intimidating competitors with
expensive litigation with their competitors’ registrars/registries.”
It might be that the unfair competition and antitrust claims will be better received in Delaware, but I am not an expert in that court.
The good news is that Scott hired a team of top-tier trial attorneys. I wish him lots of success.
Mark Thorpe says
Waste of time and money fighting over nothing.
NetOperator Wibby says
Did y’all know StoppableDomains is also attempting to trademark .bitcoin and .doge? Wild.
Like I’ve said elsewhere online, they behave like petulant colonists. This entitled, litigious nature of theirs is destructive to the entire blockchain space.
What is this handshake? Sounds like some kind of scam or CashGrab – fugazi
John Berryhill says
Maybe it’s just me, but I would be interested to hear the rationale for opposing the motion to intervene in the first case, and then filing a separate action on a claim which stands or falls on what is the same underlying fundamental issue and many of the same facts, seems like someone found a client who likes to sign checks. I see what they are trying to accomplish, but I don’t think the judges of the District of Delaware – formerly including Hugh Morris of Morris, Nichols, Arsht and Tunnell, his very own self – are going to resist the inclination to get all the rings of this circus under one tent.
Andrew Allemann says
There’s a possible hint in Florsck’s lawsuit: that Unstoppable wants the default in the first case because it would include a ruling that Gateway infringed Unstoppable’s trademark. Then Unstoppable could claim to others that a court has said it has trademark rights in .wallet.
John Berryhill says
Oh, I get that.
The problem is “I want to keep this guy out of the case so I can get a default which I’ll use against him in a case premised on the same thing in the same court” just isn’t a very compelling an argument for squandering judicial resources, and presumes the judge is not very bright.