Money Money Money
ABBA sang about it. So did Simply Red. Wars have been fought over it, and it motivates us to get out of bed in the morning and labor for eight hours a day.
You know what I am talking about……money.
Nowadays, you are unlikely to carry around physical notes and coins. Most people (well, those under 30 at least) hand over their phone when paying for an item as opposed to opening their wallet or purse. And thanks to the still unknown Satoshi Nakamoto, we have cryptocurrency. This form of currency, used for investments, has resulted in a flurry of new trademarks, mainly in Classes 9, 36, and 42.
What is cryptocurrency?
If you have never heard of cryptocurrency, here is a (very) brief explanation.
In 2008, Satoshi Nakamoto published a white paper entitled Bitcoin: A Peer-to-Peer Electronic Cash System.
The paper showed how digital cash could be created using a peer-to-peer network.
"A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution. Digital signatures provide part of the solution, but the main benefits are lost if a trusted third party is still required to prevent double-spending.
We propose a solution to the double-spending problem using a peer-to-peer network. The network timestamps transactions by hashing them into an ongoing chain of hash-based proof-of-work, forming a record that cannot be changed without redoing the proof-of-work."
Many cryptocurrencies are based on blockchain technology which keeps an online ledger of all transactions and because cryptocurrencies are decentralized, they are immune from political interference.
Bitcoin is still the most popular cryptocurrency. Some of the competing cryptocurrencies spawned by Bitcoin's success, known as "altcoins," include Litecoin, Peercoin, and Namecoin, as well as Ethereum, Cardano, and EOS. Today, the aggregate value of all the cryptocurrencies in existence is around $US214 billion, with Bitcoin representing over 68% of the total value.
Nike’s blockchain-based sneakers
In April 2019, Nike filed a trademark with the USPTO for 'cryptokicks'. The trademark would apply to cryptocurrency software and hardware wallets, online marketplace services and virtual financial transaction services. It would also cover "providing online non downloadable computer software for use as a cryptocurrency wallet; providing a website featuring technology that enables users to mine, earn, purchase, receive by any other means, store, and transfer blockchain-based tokens, coins, cryptocurrencies, and other crypto assets," the filing stated.
The exact use for 'cryptokicks' is still new. Preceding their trademark application, in March 2019 the US Patent Office issued sportswear brand Nike‘s a patent for its blockchain-compatible sneakers dubbed “CryptoKicks”. Some recent trademark activity may indicate that the sportswear giant is exploring launching its own cryptocurrency.
Although the USPTO application is still pending, Nike has valid marks for 'cryptokicks' in the EUIPO and UK IPO for Classes 9, 35, 36, 38, 41, and 42. Top product descriptions include: Downloadable image files (Class 9); Cash management (Class 36); and Data security services (Class 42).
Are cryptocurrencies and associated products being trademarked?
According to our preliminary trademark search (and research) tool Examatch, trademark applications for cryptocurrency jumped from just over 700 in 2017 to more than 4,400 in 2018. An impressive growth rate of almost 600%! However, it should be noted that this number almost halved in 2019 to 2,900 and to date, just over 470 applications have been made this year.
The top registry by far for these applications is the United States USPTO (38.4%), followed by the European Union EUIPO (7.3%) and Australia IPAU (7.2%).
The top 3 Nice Classes for the mark text CRYPTOCURRENCY are Class 36 (23.4%), Class 9 (21.1%) and Class 42 (18.6%).
2/3 top products are found in Class 9: having the product description ‘Software’ (44.6%) and ‘Computer software for managing and validating cryptocurrency transactions using blockchain-based smart contracts’ (37.6%). While in Class 36 ‘Financial and monetary services, and banking’ has a ratio of 43.5%.
Slowdown in growth of cryptocurrency trademark applications
The reason for the slowdown may be due to regulators collectively drawing in a sharp breath in 2019 when Facebook announced it was launching its own cryptocurrency, Libra. Suddenly there was a genuine prospect that big tech had the power to disrupt the economy, which has, throughout history, been controlled by governments. Backers bolted in the face of the backlash, with many doubting Facebook could provide consumers with the privacy and safety afforded to them by regulated financial institutions.
However, the new decade has seen significant development in India, the world's fastest-growing economy. Its Supreme Court overturned a ban on banks dealing with cryptocurrencies. This follows the country's Central Bank ordering a bar on financial institutions doing business with anyone involved in cryptocurrencies.
Challenges in trademarking cryptocurrencies and associated products
One obstacle for companies looking to trademark cryptocurrencies is making the mark distinctive enough. Cryptocurrency is a generic term and therefore not in itself distinct. Adding to the challenge is the fact that cryptocurrencies use an open software which makes it even more generic. Companies will need to add their own personalization to satisfy decision-makers. Examples include:
- Metal Vault
- Lumi Wallet
- Metal Pay
It is important to note that the USPTO considers the terms "BLOCKCHAIN" and "BITCOIN" to be generic, so any application using these terms exclusively is likely to be rejected.
Although it fell slightly from favor in 2019, investors are once more cosying up to digital currencies. Steve Kurz, head of asset management at Galaxy Digital, a specialist cryptocurrency firm founded by billionaire investor Mike Novogratz told the Financial Times in February this year:
"Bitcoin has a higher return on a one, three and ten-year basis than any other asset class. When the returns are so high, investors will have to pile in."
As investors return, albeit with caution, having been burnt in the 2018 crypto crash, trademarks for digital currencies and associated products will inevitably climb again.
Looking back to move forward
Everything is changing rapidly in the business world today. However, one thing that has remained constant during challenging times is the value of intellectual property. The study of trademark history can help you to shape your future trademark management.
In our new trademark report entitled “The Last Decade in Trademark Numbers” we take a closer look back at trademark activity over the last 10 years in the USPTO and the EUIPO.
We identify the top 5 Nice Classes of 2010-2019 by volume of applications and also examine and analyze each Nice Class by its respective activity, taking into account volume, top filers and products, as well as success and opposition rates.