Coinbase Won Latest Round of Trademark Fight Against Rival Crypto Platform

Image: Coinbase

Law

Coinbase Won Latest Round of Trademark Fight Against Rival Crypto Platform

Coinbase has been handed a win in the latest round of a trademark battle to get an unaffiliated crypto platform’s registration for the “Coinbase” mark invalidated in the European Union. In a decision this spring, the European Union General Court sided with the San ...

June 2, 2023 - By TFL

Coinbase Won Latest Round of Trademark Fight Against Rival Crypto Platform

Image : Coinbase

Case Documentation

Coinbase Won Latest Round of Trademark Fight Against Rival Crypto Platform

Coinbase has been handed a win in the latest round of a trademark battle to get an unaffiliated crypto platform’s registration for the “Coinbase” mark invalidated in the European Union. In a decision this spring, the European Union General Court sided with the San Francisco-headquartered crypto exchange, holding that the European Union Intellectual Property Office (“EUIPO”)’s Fourth Board of Appeal erred in its April 2021 assessment of bitFlyer Inc.’s registration for “coinbase,” as it failed to fully consider whether bitFlyer – the largest crypto exchange in Japan – acted in bad faith in filing to register the mark across all of the goods/services at issue back in 2016. 

A bit of background: Tokyo-based bitFlyer obtained an international registration for the “coinbase” word mark – in Classes 9, 35, 36, 38 and 42 – from the International Bureau of the World Intellectual Property Organization in February 2016. In June 2018, Coinbase sought to invalidate the registration, arguing that bitFlyer’s mark conflicts with its own Coinbase mark, which was registered by the EUIPO for use in Classes 9, 36 and 42 in June 2014. BitFlyer’s filing was done in bad faith, per Coinbase, as the Japanese crypto giant knew or should have known about its intensive prior use of the Coinbase mark, mainly in the U.S.

In June 2020, the EUIPO’s Cancellation Division sided with Coinbase, in part, finding that there was a likelihood of confusion for “all the identical or similar goods and services covered by the [two parties’ “Coinbase”] marks, given that [the] marks were identical.” Among such identical goods/services were downloadable computer software for use in electronically trading/transmitting digital currency payments (in Class 9); currency exchange services (in Class 36); and providing temporary use of online non-downloadable software for use in electronically trading/managing digital currency payment and exchange transactions (in Class 42).

Not a total win for Coinbase, though, the Cancellation Division rejected its argument that bitFlyer’s trademark registration should be invalidated even with regards to the goods/services that are dissimilar in accordance with Article 59(1)(b) of Regulation 2017/1001, which mandates that an “EU trademark shall be declared invalid … where the applicant was acting in bad faith when he filed the application for the trademark.” According to the Cancellation Division, Coinbase failed to submit sufficient evidence to show that bitFlyer had acted in bad faith at the time of filing for the mark at issue. 

As a result, bitFlyer’s registration was invalidated with regard to the similar goods/services, but remained in force in the EU for the dissimilar ones, such as: ear plugs, mathematical instruments, satellites for scientific purposes, and downloadable music files, etc. in Class 9; retail or wholesale services for a wide array of products in Class 35; agency services for the leasing or rental of buildings in Class 36; news agencies in Class 38; and surveying; geological surveys or research; designing of machines, etc. in Class 42. 

Coinbase appealed to the EUIPO’s Fourth Board of Appeal, taking issue with the goods/services for which the invalidity request had been rejected (i.e., the dissimilar goods). The Board dismissed the appeal due to the lack of evidence that bitFlyer had acted in bad faith in filing its trademark application for the dissimilar goods, prompting Coinbase to appeal again. This time it appealed to the General Court on the basis that: (1) the Board’s assessment of bad faith was too narrow, as it only considered the potential of bad faith in relation to the dissimilar goods/services without taking into account the similar ones; and (2) the Board erroneously concluded that bitFlyer did not act in bad faith at the time of filing the application for registration. (On the first point, Coinbase also argued that the intention of the [filing party] cannot be split for the similar and dissimilar goods/services, and instead, “bad intentions should affect all the goods and services applied for.”)

The General Court’s Decision

Setting the stage in its decision, as first reported by IPKat, the General Court held that in order to determine whether the applicant was acting in bad faith, “all the relevant factors specific to the particular case which pertained at the time of filing the application for registration of the [mark] as an EU trademark must be taken into consideration.” 

Gauging Bad Faith: Citing the Court of Justice’s 2019 decision in Chocoladefabriken Lindt & Sprüngli v. Franz Hauswirth, the court stated that those factors, include: “(i) the fact that the applicant knows or must know that a third party is using, in at least one Member State, an identical or similar [mark] for an identical or similar product capable of being confused with the [mark] for which registration is sought; (ii) the applicant’s intention to prevent that third party from continuing to use such a [mark]; and, (iii) the degree of legal protection enjoyed by the third party’s [mark] and by the [mark] for which registration is sought.” 

And beyond that, the court asserted that “account may also be taken of the origin of the [mark] and its use since its creation, the commercial logic underlying the filing of the application for registration of that [mark] as an EU trademark, and the chronology of events leading up to that filing.” 

Against that background, the court sided with Coinbase, holding that “it is apparent … that the assessment of bad faith by the Board of Appeal concerned only the dissimilar goods and services.” As such, the Board “did not properly take into consideration, in the context of the overall assessment of bad faith, all the relevant factors specific to the particular case which pertained at the time of filing the application for registration,” which includes the similar goods/services, as well as the dissimilar ones. 

While the General Court did not assess whether bitFlyer did, in fact, act in bad faith, and instead, remanded the matter back to the Board for additional determination, the outcome is, nonetheless, significant, according to Fencer Law’s Paul Maeyaert, as “an opposite decision would be an incentive for persons acting in bad faith to file applications for already existing EU trademarks for dissimilar goods and services.” In other words, he states that “splitting an application for registration into a part filed in bad faith and a part filed in good faith would offer an opportunity [for those looking to piggyback on the appeal of another’s brand] to apply to register marks for a larger set of goods and services than is justified by the actual intended use.” 

A Different Outcome: In a separate but similar trademark clash, Coinbase prevailed in its bid to invalidate bitFlyer’s registration for the “coinbase” mark in Singapore this spring on bad faith grounds. In that proceeding, Coinbase was able to show that when its application was filed, bitFlyer had actual knowledge of Coinbase and its “COINBASE” mark, as bitFlyer had mentioned the Coinbase by name in a press release and individuals from the two companies had appeared in a same panel discussion together. “They are also in the same niche industry, making it likely that the [bitFlyer] was aware of Coinbase’s presence in the market,” Coinbase’s counsel Melvin Pang and Zachery Tan successfully argued. 

In the wake of the invalidation by the Intellectual Property Office of Singapore’s Principal Assistant Registrar, Pang and Tan note that Coinbase, Inc. v bitFlyer Inc. is “one of the few trademark cases in Singapore where the high threshold for establishing bad faith was met,” noting that “choosing to register a mark that is identical or highly similar to a competitor’s without a sound explanation [as to how the mark was derived] may provide sufficient basis for the finding that the mark was registered in bad faith.” 

related articles