Judicial Reserved Judgment on Passing Off and Trademark Registration in Cryptocurrency, John Kimbell QC, July 16, 2021
Christopher Snell, who represented the creators of Litecoin, won the case.
Also, John Pepin, a well-known cybersquatter, filed two trademark applications for “LITECOIN” in 2017. (in the name of a business organization exclusively owned and managed by him). He then had a second company he controlled renamed “Litecoin Exchange Limited” at Companies House.
Moreover, The Litecoin Foundation responded by launching a lawsuit seeking injunctive relief to prevent the word mark Litecoin from passing off.
Injunctive relief grants in the first instance: The first instance judge held that:
(a) First, the public deception establishes by the submission of a trademark application for the mark Litecoin on the public register.
(b) It was not enough to just change a company’s name to Litecoin Exchange Limited to establish a misrepresentation.
(c) Mr. Pepin’s trademark application and organizational name change intend to equip him with deceptive instruments to hijack the Litecoin mark’s goodwill. As a result, the injunctive remedy requires in both situations.
All features of the first-instance ruling confirm on appeal by John Kimbell QC, sitting as a High Court Judge.
The decision is notable for two reasons:
(a) For starters, it’s the first time the Court has decided (at least in a published case). That a trademark application – which appears in the Trademarks Journal – is a deception to the public that the applicant owns the goodwill in the wordmark. The foundation for such a finding is the well-known decision in British Telecommunications PLC v One in a Million Ltd and others [1999] 1 W.L.R. 903; [1999] F.S.R.
Mr. Pepin argued on appeal that the Litecoin Foundation should have challenged the registration under the Trade Marks Act 1994 rather than suing for passing off. The appeal court rejected that claim. However, stating that the Trade Marks Act of 1994 does not provide the exclusive remedy for trademark infringement.
(b) Second, it affirms that the Court has authority to give quia timet relief when a party equips. Or is about to equip, himself with a fraud instrument, as set forth in One in a Million. There is no need to establish all of the standard aspects of passing off in this situation. It is sufficient to show: (a) goodwill in the name mark; and (b) respondent act (c) indicating that they are acquiring a tool (such as a trademark or business name) that will allow them or a third party to exploit the name mark’s goodwill.
