Welcome to today's webcast on
the NFT lawyer Youtube Channel. There are new domain extensions in Web3,
including .crypto, .eth, and .nft. What happens when someone registers your trademark
or personal name on these web3 extentions? There are two videos in this web3 domain
squatting educational series. Both videos are linked in the description below
for easy navigation and reference. This is a 'one of kind' video
series on token squatting. I am doing this series because I
have been unable to find any other comprehensive content on the web or youtube
that lays out a detailed and viable playbook for brands and celebrities to protect their names,
slogans, and marks against Web3 cybersquatting. If you already understand
blockchain and cybersquatting law, feel free to skip to the following video where we will provide instruciton on blockhcain
foresics and wallete owenr identificaiton. If you are not an expert in cybersquatting
or blockchain technology, Don't go anywhere! This 10-minute video is going to
level you up to champion status. The next 10-minute video
is going to blow your mind.
Let's talk about trademark
protection and domain names.
If you are a brand or trademark attorney,
you may already know about cybersquatting. Before diving into token squatting on web3
blockchain technology, we need to understand precisely how the web2.0 domain name system 9.com,
.net,. edu, .xyz) of the last 30 years has worked. In yesterday's internet world, a person
unknown could register your company name, your slogan, your product name, your brand name, or YOUR personal name as a domain
name without your permission. Maybe they host a website on this infringing
domain name and use the domain name and website to confuse, counterfeit, or
defraud your customers – or worse, extort you by demanding an
exorbitant price to buy it from them. When the internet emerged in the 1990s, you were allowed to steal someone's trademark
as a domain name. There were no laws to stop it. As the internet expanded, confusion
about domain names and trademarks persisted. Let s dig on Cyberquattng law.
Cybersquatting is defined
by the Anticybersquatting Consumer Protection Act (aka
ACPA). The ACPA is a federal law that brought trademark enforcement
to the internet in the year 2000. Remember when Microsoft – which thought
the internet was a fad – had to pay $1 million dollars to buy microsoft.com
from a stranger? That was 1998. The ACPA was passed in 2000 to make it illegal
for anyone except the trademark owner to register, use, or traffic in a domain name
with a bad faith intent to profit. Microsoft looked foolish back then for failing
to register its name as a .com domain name. And thinking the internet was
never going to amount to much. This its a fad argument sounds familiar
when we listen to blockchain deniers. Most brands are way more in tune with Web3
today. They are working to understand blockchain technology and start teh porcess of combating
the online infringement that web3 will inspire.
This video channel is here to
help you avoid being a Microsoft. THE ACPA also protects your personal
name for the same good and noble reasons To protect you and your community from fraud. If someone
who is not the trademark owner registers a literal or variation of your
company name, brand, or even your personal name as a domain name
with a BAD FAITH intent to profit, well Under the ACPA, that person is liable
for up to $100,000 in statutory damages per domain name, plus attorney fees. That is some pretty heavy-duty
legal and financial leverage. Many cybersquatters fold under the
threat of being sued under the ACPA.
Courts and arbitrators can also order a
transfer of a web2 domain name to your control. Let's pause. This is important because it
demarks a critical differentiator between web2 and web3; between the .com
world and the .crypto world How does forced transfer work
in the web2 world, and why doesn t forced transfers work
in the web3 world of blockchain? Why is forced transfer improbably in web3? The answer, my friends, lies in the
architectural difference between centralized technology and
decentralized technology. Because all Web 2 domain names are
controlled by ICANN – the internet corporation for assigned names and numbers –
as well as registries such as Verisign, which control DomainName Servers (DNS) and Domain registrars such as GoDaddy which rent
domain names to you for a period of years. Well, in the web2 world, there are three centralized companies
involved in every Web 2 domain registration. That means three controlling entities
can take a name from a cybersquatter and transfer it to the trademark owner
or person whose name is cybersquatted.
Think of web2 domain names like this.
You don't OWN a Web2 domain. You rent it. And the landlord, building owner,
or municipality can take it from you and give it to someone else
if you break the rules. That is not the way blockchain or
web3 work. Blockchain is Decentralized with no controlling entities.
Web 3.0 moves all power from 'too big to fail' corporations directly to we
the poeple . Web3.0 is trickle-up economics. Most power lies with the individuals
who share whatever power they decide with corporations. Or at least that is the
libertarian promise and potential of blockchain. Token contracts include self-executing
software code which makes ownership immutable – unchanging over time and unable
to be changed – unless the little guy agrees. And transfers of domain names occur only when
the person who owns that wallet says so; the trnasfer actually happens without any third party
involvement. No GoDaddy. No escrows. No versign. Web3 wallets owners hold private keys that
execute software code that controls ownership. For Web3 domain names such as
.crypto, .eth,
.blockchain .nft
And many others, there is no intermediary which can arbitrate trademark infringement or
take a Web3 domain away from a token squatter.
So what if you are a brand or a
famous person whose Web3 domain name is purchased by a 'token squatter'?
yourcompany.eth yorutrademark.blockchain. ICANN can't help you. Verisign cant
help you. GoDaddy cant help you. There is no landlord, property owner, or
municipality with any say, power, or control over that infringing domain. Only the wallet owner – whose identity
is represented by a string of 64 random numbers – controls ownership of the
domain name and the ability to execute the transfer code embedded in
the token on the blockchain. Interestingly, none other than Microsoft –
which no doubt has scars from its microsoft.com debacle –
issued annual 'Digital Defense Report' which warned: "The next big threat" are web3 domain names
written into a distributed ledger maintained across a constellation of computers instead of
stored in a traditional, centralized registry. Unstoppable Domains is a blockchain entity
offering .nft and.crypto domain names. Unstoppable Domains says on its website. "Unlike traditional
domains, Unstoppable Domains are fully owned and controlled by the user with zero renewal fees
ever (you buy it once, you own it for life!)." It sounds hopeless, and you might
worry that web3 will bring endless consumer confusion about the source
and origin of goods and services.
Just as the skeptics and chicken littles
of the 1990s were wrong about web2.0, so will the critics be wrong about the
sky falling as we move towards web3.0. Web3 won't be perfect, but the benefits – even for companies and brands – will
far outweigh the problems. Why do brands need to register
their web3 domain name NFTS? For those brands that are
already being token squatted, why do they need to act fast and
aggressively to secure those domains? And given everything I just
said about decentralization, how can a brand force a transfer of domains
to the company-controlled Ethereum wallet? Let's start with the first question. Why must
brands aggressively protect their web3.0 identity? Unlike web2 domain names, web3 domains do much
more than point the DNS to the website or email server. Ethereum domain names – NFTS –
can be mapped to crypto wallet addresses. When the token owner of – for example –
googlestore.eth – asks for a crypto payment, they provide the payor the
address "googlestore.eth" Any crypto sent to that branded address
goes directly into the token owner's wallet. Well you can see the problem is worse
than web2 domain names and websites.
Web3 domains can be mapped to what would otherwise
be arbitrary 64-character wallet addresses that pay and receive cryptocurrency. Web3 wallets represent your branded bank account
routing number. Web3 domains are the branded 'swift code' for your – or a squatter
pretending to be you – bank account. Let that sink in. In addition to hosting websites and
acting as your branded payment processor, Ethereum NFT domain names can also be set up as a
login name, username, avatar name, or store name across any decentralized
application on any blockchain. Whoever controls googlestore.eth can set up a
store in the metaverse, ask for crypto payments to be sent to googlestore.eth, and take on the brand
identity in both the physical and virtual world.
Owning googlestore.eth – for instance – can make
it easy for a scammer to confuse google customers into thinking the payment request is coming
from google. And that they are paying google. It gets worse, web3 domain name can be used
as your NFT marketplace name on Opensea and your social media handle across web2 and web3. Your blockchain wallet address – mapped
to a web3 branded domain name – can be used to identify all aspects
of your web3 existence. Yikes! We don't mean to pick on any of the brands
whose web3 domain names you see in this or the following video.
Hopefully, these brands
do control the wallets linked to these domain NFTs. Or at least by the time you are watching
this video, these brands have followed the tips in episode 2 to leverage a
transfer to their control. The domain names shown and mentioned herein are
just examples that should help you realize the problem is more than theoretical. Brand protection
in a blockchain world is not some distant problem on the horizon of an uncertain metaverse.
If you are waiting to portect your brand on web3, you are likely making your job
that much harder in the future. Every branded Web3 domain has
the potential to defraud in ways web2 domain squatters
could never have imagined. Listening to this video to this
point might make you think that web3 will incite unsolvable fraud for all of us. Web2 detractors thought the same
thing in 1999 and protested loudly. But alas, do not fret. Web3 is
more promise than infringement. I am here today – and every day on the NFT
lawyer Youtube Channel – to help you protect your – and your clients' – trademarks
in the metaverse and beyond. Our first question was 'why do you
need to protect your brand in the web3 world. I now hope your sense of urgency
is a little more (head shake) urgent. Remember the second question. How do you protect
yourself in the decentralized world of web3? LEt's generally talk and then take a
deeper dive on the question of enforcement in episode 2 of this token squatter video series.
How do I protect my brand and
personal name in a tokenized world? Instead of looking to centralized third parties
to assist you, IP enforcement in the Web3 world is about four things, all of which we will
discuss in the following videos in this series: 1. forced compliance,
2. practical leverage,
3. financial leverage and 4. legal leverage. Each of these levers, correctly
pulled, can exert real force.
In many instances, they give you as much chance of domain recovery
as the centralized control system of web2. Today, you may be surprised to learn
what many blockchain experts already know Don't believe the hype and click-bait. Web3 is not a haven for criminals to
engage in anonymous criminal activity. At least not more so than the real world or web2. A 64-digit anonymous wallet
address is not as anonymous or immune from accountability as you might think. YOu can sometimes identify the wallet owner
with a bit of digging on and off the blockchain. We will be discussing blockchain
forensics in the following video. Leverage against token squatters comes in
many forms if you know how to exert it. There is no threat 'letter' in the metaverse. There are chat and bbs postings on block
explorers between wallet addresses, Discord channels for most projects, forum
communications, linked social media accounts, and sometimes discoverable emails that can
open a line of communication with the squatter.
Notice or threats communicated
to the wallet owner, which owns the NFT domain, can achieve
your IP protection goals. There are several ways to identify
a wallet owner. Sometimes, you have to go to court to get subpoena power. But often, a reasonable blockchain
attorney can uncover the token squatters, identify or at least establish
a line of communication. The following video will discuss digital
breadcrumbs, subpoenas to decentralized exchanges, and other dAPPS and other
wallet owner identification techniques.
If a threat/notice chat,
post, or email does not work, a john doe lawsuit can also get the job done.
You will need expertise in alternative service, among other procedural rules which come
into play for many blockchain lawsuits. Here is the reward .. AN ACPA
judgment – typically by default unless the squatter wants to identify
themselves by name voluntarily – can .. (a) subject the cybersquatter to the
collection, attachment, and garnishment. You can chase down their digital
asset until the end of days. The cybersquatters cryptocurrency and NFT
transfers through crypto exchanges such as Coinbase and all crypto transactions
made through decentralized applications – known as dAPPs which are the heart of web3 – They are visible, traceable,
and subject to collection.
An ACPA judgment – or even a threat
of being sued for token squatting: (b) can be used to preclude the
cybersquatter from safely using the best features of blockchain
– metaverses, exchanges, dAPPs – Establishing YOUR trademark rights (c) can be used to preclude the squatter
from using NFT marketplaces. THis wil make it harder to sell the infringing
Web3 domain name for a profit. A trademark lawyer specializing in cybersquatting
and blockchain technology can creatively implement and evolve enforcement strategies
as this technology rapidly changes each day. Remember one of the benefits of Web3 . every
transaction is recorded and publically available for everyone to see. That transparency
doesn't exist AT ALL in the web2 world. Phew. That was a lot. Do you like what you have learned so far? This is not the playbook lawyers use to protect
their clients' IP.
This is the playbook we are creating in real-time for lawyers to assist
their clients. This is the playbook brands MUST understand to implement IP protection
strategies in our evolving web3 world. One more note. I get this question all the time.
Why are you sharing your expertise so publically? We are proud to continue to set the pace and
create the legal framework for IP creation and protection in the wild, unknown and
ever-changing blockchain world of Web3. We as a web3 community must help Web3
emerge legitimately and sustainably so that the incredible promise of
Web3 is more likely to be realized.
We share our knowledge as an act of leadership. Disclaimer. This is not legal advice. This is educational and informational.
Every situation is different. Consult your blockchain and IP
attorney if you need legal advice. I have a favor to ask before jumping in
with both feet in the following video. Hit the subscribe button if you
like what you have heard so far, Click the bell to be notified of
the following videos. Ask questions in the comments. I welcome your thoughts.
Don t forget to watch Episode 2 of this Token Squatting series by clicking the video right there
or find the link in the description below. We will be educating and elevating on blockchain foresics
and wallete owenr identifcation techniques. My name is Enrico, and I am the author
of the NFT Lawyer video channel. We will see YOU in the next video.
