NIFTY™: Ethereum’s First Trademark Battle
Part 1: A Crypto Twitter Saga
At some point in time which is difficult to pin point, the crypto™ community started to use the term “Nifty” or “NFTy” to refer to non-fungible tokens (NFTs) — which are blockchain backed assets that are… you guessed it… non-fungible. Essentially, Nifty is the phonetic, non-acronym nomenclature for “NFT”. And now the folks behind CrypoKitties want nifty all to themselves.
Disclaimer: I’m not a lawyer, but my late night rabbit hole has been trying to understand trademark law more because this #Nifty case is just ridiculous.
You are reading part 1 of a 4 part series, NIFTY™: Ethereum’s First Trademark Battle.
- A Crypto Twitter Saga— you are here
- The Etymology (events and discussions that lead toward the birth of the nifty nomenclature)
- A Weak Mark (now that we have learned the etymology, we can see that it is a weak mark)
- NIFTY <> Commons (next steps to ensure nifty remains in the commons)
Part 1: A Crypto Twitter Saga
The drama started on August 9th, 2018, when ronmartinez stumbled upon the NIFTY trademark application and shared it in a tweet. Matt Condon, one of the Ethereum community’s top NFT champions who has been heavily invested in the process of reaching community consensus on the nifty nomenclature was outraged.
The NIFTY trademark application revealed that on July 20th, 2018, Dapper Labs Inc., a subsidiary of Axiom Zen, which is the venture studio that created CryptoKitties, filed a trademark application for NIFTY (or nifty — this isn’t case sensitive). It isn’t a registered trademark yet: the application process has just started.
Once a registered trademark, Dapper will have the exclusive right to use the term “nifty” for software products & services that are related to cryptocurrency & digital assets (e.g. wallets, websites, and other computer programs where a user can interact with crypto). Hence, once officially registered, they will have the ability to take legal action against any external party using this mark in relation to these specified services.
Nifty services Dapper wants to own
This is the comprehensive list of the services where Dapper wants to centrally control the usage of the term nifty. It’s pasted from their trademark application. Feel free to skim.
downloadable computer software to enable consumers and businesses to interact with other software, digital assets, digital apparel, cryptocurrency, online services, and databases; computer application software for mobile phones, portable media players, and computers that is used to enable users to hold cryptocurrency via electronic wallets; computer software to create and manage electronic wallets for holding cryptocurrency; application software, namely, software for sending, receiving, buying, selling and storing cryptocurrency; software for use in accessing, reading, tracking, and using blockchain technology, cryptocurrency, digital assets, and digital apparel; software for facilitating a cryptocurrency transaction
consultation services, namely, professional services, software development, and educational services to third parties
providing an online website enabling users to interact with computer games and other content over a global communication network
providing temporary use of on-line non-downloadable software and applications for use in accessing, reading, tracking, and using blockchain technology; providing on-line non-downloadable computer software for use in blockchain technology and computation; computer software design services, namely, design, development, and implementation of software solutions for digital currency security for blockchain and cryptocurrency transactions; computer programming and computer software design services, namely, design, development, and implementation of software for hierarchical deterministic multisignature (hdm) wallets and third party verification services for blockchain and cryptocurrency transactions; providing a website featuring technology that enables users to engage in cryptocurrency mining and verification services for cryptocurrency; platform as a service (paas) featuring computer software platforms for providing design, testing, deployment, and management of blockchain systems; platform as a service (paas) featuring computer software platforms for the deployment, transfer, and management of fiat and cryptocurrency; software as a service (saas)
promotional apparel, namely, hats, t-shirts, sweatshirts, jackets
Looks like that about covers just about any possible pivot!
After many tweets and tags to @AxiomZenTeam and some of their employees and founders, Matt Condon eventually got a response from Roham, AxiomZen’s Founder/CEO. Roham’s response was a tweetstorm — I’m combining it here into a single quote:
Matt, i do not appreciate your style here — you are either misinformed or being willingly disingenuous
first, you have our direct contacts but chose to spam several of my team on twitter, aggressively: i asked folks not to reply until i had time to
TMs are a standard part of our process — we shipped NiftyLicense and our general counsel jumped on the filing
generic words can never be TM’d — our interest is only in protecting products and services from copy-cats that mislead users
we absolutely will shield the community
third and most important: we’re committed to supporting the community
we know we’re at the earliest stages of a major shift, from centralized to peer-to-peer, from digital rental to true ownership, from feudalism to freedom
to go mainstream, we need sustainable business models
the goal of http://NiftyLicense.org , Nifty Fund, and KittyVerse is exactly this: help artists, creators, devs, designers to navigate the laws of the land and build sustainable businesses with their talents
license was planned since day 1 to give more meaning to NFT ownership
Now to analyze some of the contradictions…
What follows is an analysis of some of Roham’s responses and my attempt at intersecting trademark law with open source culture. Again a disclaimer is that I’m not a lawyer. Another disclaimer is that I’m not trying to do this in bad faith, instead I’m trying to open up the floor for debate — one that doesn’t occur in separate tweets, as this is something that needs to be analyzed from a higher-level perspective.
Roham Quote #1
generic words can never be TM’d — our interest is only in protecting products and services from copy-cats that mislead users
If you believe that generic words can never be TM’d, that means by transitive property you also believe that nifty is not a generic word, since Dapper filed a trademark application for this word. A more appropriate translation of this may be something like “we submitted a trademark application for a non-generic term, nifty”.
Roham Quote #2
we have no intent or ability to TM generic concept of “a nifty”
Well nobody can trademark concepts. Patents protect concepts. The question then returns to: do you actually believe nifty is a generic term, or not? I cannot decipher if you comprehend that the discourse that occurred on Twitter last week was about monopolizing words, not concepts.
When Matt suggests that perhaps Dapper change the scope of the trademark, you seem to scapegoat Stephen Krause, your general counsel (GC). It’s unclear through this statement though if you are admitting that a mistake happened or not.
(Then it doesn’t take too long for ronmartinez to add a comment…)
Roham Quote #3
we absolutely will shield the community
How does one shield the community when, if granted the trademark, it gives Dapper the power to make a community member like SPW Labs, that has built NIFTYgallery, to cease and desist from using nifty in their brand name? After all, NIFTYgallery is:
providing on-line non-downloadable computer software for use in blockchain technology and computation;
Would it be logical for Dapper’s Nifty brands to co-exist with NIFTYgallery? Or wouldn’t it just make more sense to use the trademark power and push them out of the market? Hence is that actually community shielding?
Roham Quote #4
license was planned since day 1 to give more meaning to NFT ownership
Is it really about the planning schedule of the license though? The dispute is about the nifty trademark generally. The term nifty didn’t exist in the NFT context since day 1 — if it did, and if your firm was responsible for this term, then it would have been trademarked since day 1, right?
Additionally, when one looks at niftylicense.org, there is an inconsistent statement in the license: the “NIFTY™ License” mark. It is called NIFTY™ License a mark, yet there is no USPTO application for “NIFTY License”. Additionally, the ™ symbol is placed after NIFTY, not after “NIFTY License”. Was this really an er in the GC’s part? How could the GC miss trademarking three things (Nifty Fund, Nifty License, Nifty Kitty …) and instead only apply for a single term?
Roham Quote #5
our interest is only in protecting products and services from copy-cats that mislead users
What does misleading users mean? If Dapper begins using Nifty in many of its goods, products, and services, then users can actually become mislead to believe that Nifty was a brand invented by Dapper. But that isn’t actually what happened as nifty is a fresh, generic industry nomenclature for non-fungible tokens that has evolved through internet brainstorming sessions.
In fact, users may be mislead to think that NIFTYgallery is a Dapper product.
CryptoKitties is the only copy-cat in this picture.
Axiom Zen/Dapper didn’t think about this trademark application logically, as they applied for a trademark for what the nifty community considers a generic term. Usually the opposite happens: the original company invents a fresh term — one that’s not (yet) descriptive, such as Xerox. The term then becomes so popular, that it actually transforms to mean something descriptive (Xerox = to copy something) — such that it loses its trademark protection.
Roham discussing the “generic concept of a nifty” is actually an admission that he does indeed believe nifty is a descriptive term.
So shouldn’t this all end now?
You have read part 1 of a 4 part series, NIFTY™: Ethereum’s First Trademark Battle.
- A Crypto Twitter Saga — you are here
- The Etymology (events and discussions that lead toward the birth of the nifty nomenclature)
- A Weak Mark (now that we have learned the etymology, we can see that it is a weak mark)
- NIFTY <> Commons (next steps to ensure the term remains in the commons)
There’s a lot more to be said to create the historical record, but time is limited… more coming soon — hit me up if you want to help write.
