Delaware Court Dismisses Unfair Competition and Antitrust Claims in Blockchain Domain Name Dispute

News | February 15, 2024 By:

On Thursday, February 8, 2024, the United States District Court for the District of Delaware dismissed two of the three claims in an ongoing case involving a dispute over blockchain domain names.

The case centers around ownership rights to the “.wallet” top-level domain name on blockchain networks. Plaintiff Scott Florcsk owns Wallet Inc., which launched the .wallet domain on the Handshake blockchain network in July 2022. Defendant Unstoppable Domains also owns the .wallet domain on another blockchain and has been trying to register it as a trademark since 2021.

When Wallet Inc. opened .wallet for public registration, Unstoppable sued Gateway Registry – the company that hosted the .wallet domain for Wallet Inc. Unstoppable alleged trademark infringement and other claims. Gateway shut down in response and defaulted, prompting Unstoppable to seek a default judgment.

Florcsk then intervened in the suit between Unstoppable and Gateway. Shortly after, Unstoppable voluntarily dismissed that original case. Florcsk then filed a new case against Unstoppable, seeking declarations around trademark rights and alleging unfair competition and antitrust violations.

In his 38-page opinion, Judge Colm Connolly dismissed two of Florcsk’s three claims. Under the Noerr-Pennington doctrine, genuine efforts to petition the government – including filing lawsuits – are protected from liability. The judge found that despite the USPTO rejecting Unstoppable’s trademark applications, Unstoppable’s claims against Gateway were not “objectively baseless” as the law requires to bypass Noerr-Pennington immunity.

While trademark registration confers benefits, common law trademark rights can still exist even without approval from the USPTO. The judge did not see evidence demonstrating no reasonable litigant could expect success on the merits of Unstoppable’s original case against Gateway. Florcsk’s antitrust and unfair competition claims were both based on the filing of this prior suit. The judge’s dismissal leaves only Florcsk’s trademark declaratory judgment claim still pending.

Please contact BlockTribune for access to a copy of this filing.