News & Insights

Web3 Blockchain Domain Names: A New Frontier for Trademark Protection

April 15, 2022

By: Giovanna H. Fessenden-Fairbank

Trademark owners once raced to protect their brands by registering .com domain names on the World Wide Web (Web2). It is with a sense of déjà vu that trademark owners are now facing a new threat of cybersquatting of their popular, famous, and effective brand names as components of blockchain domain names in a new iteration of the World Wide Web, a blockchain web known as Web3.

Blockchain domain names are addresses in Web3. They superficially resemble “traditional” Web2 domain names in that they could incorporate trademarks, but they are otherwise quite distinct. Web3 is a decentralized network with no centralized domain name registrar, such as the Internet Corporation for Assigned Names and Numbers (ICANN) for Web2. As further distinctions, blockchain domains are currently not compatible with Web2, and their functionality is not the same as traditional Web2 domain names.

The technology surrounding blockchain domains is quickly evolving. With current technology, blockchain domain names are configured as non-fungible tokens (NFTs) and can be used, for example, to enable the mapping of human-readable names (e.g., trademarks) to blockchain wallet addresses, facilitate the transfer of electronic assets, enable access to smart contracts, and reroute traffic from Web3 to a “traditional domain” in Web2.

A blockchain wallet address is typically a long unique string of numbers and characters (also called a public key address) that can be used to send/receive electronic assets, such as cryptocurrency and NFTs. By replacing that lengthy string with an address that includes a trademark, consumers may find it more user-friendly to interface with electronic wallet addresses.

In a virtual world as a result of COVID and other developments, businesses are looking for new and innovative ways to connect with their patrons and augment marketing tactics and e-commerce strategies. Easy access to electronic wallets, smart contracts, and NFTs via blockchain domains permits businesses to evolve the user experience for the virtual future. This is a new technological frontier, and while its future and ultimate value are uncertain, it is a cutting-edge branding and brand protection opportunity.

Hamilton Brook Smith and Reynolds is helping some of its clients protect their trademarks in Web3. As an illustrative example, we have been assisting our clients to protect and secure their brands as blockchain domain names, e.g., bromleymountain.nft, jiminypeak.nft, cranmore.eth, snowgun.eth, eosventures.eth, and bullwheel.nft.

Brand owners may only have one opportunity to secure blockchain domains that include their trademarks. Since the legal landscape is in its infancy and there is no central authority which controls the registry of domain name ownership in Web3, there may be limited legal recourse for trademark owners to stop cybersquatters who adopt blockchain domains with the owners’ trademarks in Web3. Consequently, companies should now carefully consider strategies to protect their brands in the context of the emerging blockchain domain names.