LITECOIN - crypto trade mark application is passing off
An application to register a trade mark can constitute passing off, according to a recent judgment by Deputy High Court Judge John Kimbell QC in a case concerning the Litecoin cryptocurrency.
The litigation was brought by Litecoin Foundation Limited (Litecoin Foundation) against three defendants: Inshallah Limited, Nasjet Limited and John Pepin. Litecoin Foundation claimed it has a substantial reputation and goodwill in the UK in Litecoin, which it had promoted and developed.
The first defendant had filed a UK trade mark application for LITECOIN (in upper and lower case) in December 2017. Litecoin Foundation claimed that this would cause the public to think that the defendant was connected or associated with Litecoin Foundation’s business, that the application was made in bad faith and that it had suffered loss and damage and would continue to do so.
The first instance judge found largely in favour of Litecoin Foundation, concluding that the trade mark application gave rise to a misrepresentation to the public and constituted an instrument of fraud. She granted two injunctions prohibiting the use of the name LITECOIN and ordering the destruction of all articles including the word. However, she also granted permission to appeal, saying her decision was “as a matter of law, at the edge of the court’s jurisdiction”. The defendants appealed on six grounds. Judge Kimbell rejected all of them.
Notably, he said that the judge had correctly found that a small amount of trading may be sufficient to establish goodwill, following the 1967 case Stannard v Reay: “The judge's evaluation that sufficient goodwill had been generated by December 2017 to found a claim in passing off … does not in my judgement contain any gap in logic, or lack of consistency, or a failure to take account of some material factor so as to undermine the cogency of the conclusion reached.”
District Judge Hart was also right to conclude that the trade mark application was an actionable misrepresentation, as it was a public announcement of a purported connection with Litecoin, and inherently asserted a right and intention to use the sign when there was no such connection or intention. Judge Kimbell agreed with the first instance judge that the trade mark application constituted an actionable passing off for the same reasons as the registration of domain names did in the 1999 One In A Million case.
A procedural point to note: This was an appeal from a 2020 decision by District Judge Hart sitting in the IP Enterprise Court (IPEC) small claims track. Appeals from the IPEC small claims track are fairly unusual and are made to the Enterprise Judge in the Chancery Division of the High Court.
To find out more about the issues raised in this case including trade mark disputes and filing contact Rosie Burbidge, Intellectual Property Partner at Gunnercooke LLP in London - firstname.lastname@example.org