A dispute between blockchain domain name owners is a preview of what’s to come.
Update: Unstoppable Domains sued Gateway.io.
Blockchain domain name company Unstoppable Domains has threatened to sue a Handshake domain name service for offering registrations under the .wallet Handshake domain name.
The company sent a cease and desist letter (PDF) to Gateway.io, a company that acts as a registry and registrar for Handshake domain names, earlier this month.
Unlike other blockchain domain systems that only offer second-level registrations, Handshake allows people to register alt-root High level domains. The holders of these first-level domains can then propose second-level domain names. The owner of the Handshake .wallet top-level domain offers second-level domains through Gateway.io.
In its formal notice, Unstoppable Domains states:
…As we know you know, Unstoppable Domains has been selling .wallet top-level domain names for over a year. Unstoppable Domains therefore owns trademark rights to the .wallet top-level domain name (see US Serial No. 90/886,517). Yet, in blatant disregard of the clearly established rights of Unstoppable Domains, a third party (“Wallet”) and (sic) recently began offering its own .wallet top-level domain names for sale…
The .wallet holder created the Handshake domain on July 31, 2020. Unstoppable Domains began offering its own .wallet domains in the summer of 2021.
US serial number 90/886,517 is a intention to use trademark application for “portfolio”. Unstoppable filed the application in August 2021. Like most of Unstoppable Domains’ other attempts to file top-level domain names, the U.S. Patent and Trademark Office has so far refused to grant the trademark because it does not grant trademarks for top-level domains. He sent a non-final notice of action in May before Unstoppable sent the cease and desist letter.
The Trademark Office previously denied an Unstoppable Domains trademark application for “.wallet” with a preceding dot. The bureau denied all TLD requests from Unstoppable except for “dweb” and “defi” without dots. Although the applications have been authorized, Unstoppable has not yet submitted any usage specimens. A specimen containing a period or used as a top-level domain would probably not be accepted.
Unstoppable has also filed trademark applications in Canada.
All of this points to a persistent problem with domain names on the alt-root blockchain: name collisions. If people can own a .wallet address in the unstoppable and handshake domains, there will be confusion between the two domains. In the C&D, Unstoppable noted:
Additionally, the unapproved use of the .wallet top level domain name will create many conflicts and interference with the thousands of existing .wallet top level domain name owners. This will have a profound effect on both Unstoppable Domains users and Unstoppable Domains itself, and constitutes both tortious interference in Unstoppable Domains business relationships and unfair competition.
This problem will be exacerbated when ICANN launches its next round of top-level domain names. Any domain published in ICANN’s main root will be accessible on popular web browsers, making them instantly more accessible than blockchain domains that require special browsers, plugins, or other workarounds to access them.
And many Unstoppable Domains top-level domains are sure to be challenged in the next round of applications: .crypto, .nft, and .blockchain, for example.
Unstoppable’s trademark applications are likely a way to stand out from the growing number of competing blockchain domain initiatives and ICANN’s next round. This appears to be an effort to claim rights that would block other candidates.
In the latest round, the trademark pioneers filed trademark applications in various jurisdictions and then tried to claim the exclusive rights to the corresponding new extensions. These efforts failed.
On Domain Name Wire Podcast #224 (February 2019), I asked Matthew Gould, founder of Unstoppable Domains, about the conflict with future ICANN domains:
Domain name thread: …it’s a very good bet that dot crypto will be one of the best, most in-demand for names in the next round if it looks like the current round. I mean, so at this point, and I know you’re considering doing a community application, but you know, community applications are, as we saw in the last round, there could be several, is not it. And there could be a fight about it. I mean, chances are we’ll end up in a situation where either you have to pay a lot of money to get .crypto through ICANN, or you have .crypto in your blockchain root and there’s a .crypto in the main road.
Gould: Yeah. I mean, I would just say we’ll try to figure it out once we get there, with ICANN. And I think taking the worst case here, you know, I have to be optimistic, like I’m a small business, a startup founder. And I think we’re going in the right direction here. And you know, I think the previous rejections for TLD reservations like you mentioned with the brands were rejected on the grounds that they didn’t have an existing or functioning naming service. And that won’t be the case with us because we’re actually going to have an existing and working naming service. So at least on the brands side, we’re pretty confident that we’re going to be protected in this fight. And we are also ready to fight for it. Another thing I’ll add to that is that it’s very likely that we will eventually find a partner in the industry to work with us on many of these TLDs. And it may make a lot more sense for us to work together on launching a TLD like .crypto on ICANN than fighting over that kind of TLD.
Unstoppable Domains instructs Gateway to deactivate .wallet domains, stop selling the domains, and provide .wallet handshake domain owner information.
This could be a test for what will surely be a future of naming collisions between alternate roots and, ultimately, the existing main root.
I contacted Unstoppable Domains on Monday for a comment, but did not hear back at the time of publication.