Company’s Namebase business is funding legal challenge.
NameBase, a Handshake domain platform owned by domain registrar Namecheap, is funding a legal challenge to Unstoppable Domains.
Unstoppable Domains sued Gateway Registry, a rival to NameBase, after Gateway started offering .wallet domains in the Handshake system. Unstoppable offers a competing .wallet extension in its own platform.
Gateway quickly folded. Then Scott Florcsk, owner of the .wallet domain name in Handshake, put out a call for help to the community to help him fight back.
Namecheap CEO Richard Kirkendall hinted on Twitter that his company would help fight back:
Fret not, the fight for the HNS tld .wallet and it’s domain holders has just begun.
— Richard Kirkendall (@NamecheapCEO) August 2, 2022
Florsck filed to intervene in Unstoppable Domains’ lawsuit against Gateway, and he also filed a separate lawsuit.
Today, Florsck notified the court that Namebase is funding his legal challenge. In return for funding Florsck, Namebase will get a split of any value received from the monetization or disposition of Florcsk’s .wallet top level domain and a split of recoveries, either by settlement or judgment, procured by Florcsk in related litigation.
Namebase does not have approval rights for litigation or settlement decisions.
Unstoppable Domains probably thought it was picking on an easy target with its lawsuit against Gateway. Now, it has a much more formidable foe.
This is a very important and historic fight. There will be all kinds of chains with naming services. If unstoppable wins that would be a red flag for anyone in the crypto space.
NetOperator Wibby says
> Unstoppable Domains probably thought it was picking on an easy target with its lawsuit against Gateway.
Precisely this. Play dumb games, win dumb prizes. #StoppableDomains.
Don’t be surprised the DOJ ,SEC, the antitrust dept,the federal consumer agency will get involved in this case.
How come ICAAN is not involved?
Will Epik get involved too as they are the champions of Free speech
This case is way too small for the government to care (heck, they barely get involved with Google/Facebook concerns, and they’re massively problematic!)
ICANN will also not get involved, because it has nothing to do with its limited scope (gTLDs, IP address, and the root zone).
Domain Enthusiast says
“In return for funding Florsck, Namebase will get a split of any value received from the monetization or disposition of Florcsk’s .wallet top level domain”.
Can anyone explain what will be the procedure of monetization & disposition of .wallet TLD? Through future .wallet TLD sales?
In short, this potentially means if there’s any type of monetary recovery for the owner of Gateway/.wallet, NC could be entitled to a portion of said funds based on their contribution to covering the legal expenditures for the HNS .wallet owner etc. It’s basically their way of recouping some, if not all, of their allocated resources in this case by default.
Now, it’s important to remember that NC’s involvement doesn’t guarantee a win for HNS’ .wallet/Gateway. At bare minimum, it gives NC a nice bump in good PR because they can say “Hey, we stepped in to help the little guy.”. It’s unclear whether exclusive listing rights to HNS’ .wallet are apart of the NC/.wallet legal support dynamic. This will reveal itself in due time.
This is an interesting situation based on the fact HNS has 6+ million TLDs registered; and NC likely won’t go to bat for every HNS TLD involved in some legal issues with a VC-backed company. So, it warrants the question: Why go to bat for/with HNS’ .wallet owner. It COULD be related to Namecheap’s own .wallet goals and interests. After all, they’re a registrar.
With NC owning Namebase, and being the second largest centralized registrar in the world, they realize there’s leverage to be had in the HNS namespace. HNS has the tech; but the owner “community” is fragile and deals with funding/adoption constraints. NC is in a position to be “namespace savior and beneficiary” while never risking “their centralized interests”.
Andrew Allemann says
“So, it warrants the question: Why go to bat for/with HNS’ .wallet owner”
I’d say it’s because of the precedent-setting nature of a first case.
Agreed. This could very well be one angle driving Namecheap’s involvement in the case. It’s reasonable to assume Namecheap’s status as a major centralized player does raise an eyebrow with regard to their involvement in a decentralized TLD matter. Would they be involved if there was a TLD other than .wallet as the subject? Hmm.
Again, there are 7 million HNS TLDs. Namecheap has proven to be selective about which HNS TLDs they allow to be listed on their website. So it’s safe to they’d be selective about who they’d back in a legal suit. In an age of cryptocurrency activity and lingo, it’s clear why .wallet would be a TLD they’d have any interest in supporting with in-house resources.
Granted, the case is precedent-setting. Not only for the domain space; but for the TLD owners who might be under the impression Namecheap will back them in the event another VC backed company files a suit. Precedent or not, we can all agree there are sides being taken for more reasons than one here. Only time will tell under what circumstances support was rendered.
I read both briefs in full.
I think UD has a very good case here… first to market (selling to consumers), intentional interference with 400+ partners and their contracts, etc.
HNS rests its case on trademark law and says that consumers would differentiate between .wallet names on different blockchains (which seems highly unlikely, likely a lot of customer confusion).
If they win this case at trial, the value of UD will quickly 10x because of the precedent. They were first to get widespread usage of a lot of very valuable namespace aside from .wallet…