NFT Domain Name Squatters: ICANN Rules UDRP Applies to NFTs

Arent Fox
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Arent Fox

Nothing is safe from fraudulent activity, not even emerging NFTs (non-fungible tokens). While most domain owners are still learning about NFTs, cryptosquatters have been busily creating NFTs using well-known trademarks. There is now greater clarity regarding resources for addressing this troublesome issue.
 

On May 10, 2021, FORUM, the dispute resolution body for the Internet Corporation for Assigned Names and Numbers (ICANN), ruled on a case of first impression that ICANN’s Uniform Domain Name Dispute Resolution Policy (UDRP) applies to so-called “cryptosquatters,” who attempt to turn trademarked domain names into NFTs. In the subject decision, Morgan Stanley brought a complaint for infringement of their domain “morganstanley.com” after alleged cryptosquatter Joseph Masci registered a similar domain name entitled “nftmorganstanley.com” with GoDaddy.com (e.g. domain registrar).

In its decision, FORUM ruled that the domain name consists only of “the Complainant's MORGAN STANLEY mark (which is registered, inter alia in the USA for financial services with first use recorded as 1935), the acronym ‘nft’ meaning [NFT] and the gTLD “.com”.” Under prior ICANN decisions, in particular Wiluna Holdings LLC v. Edna Sherman, FA 1652781 (FORUM Jan. 22, 2016), “[t]he addition of a generic term and a gTLD does not negate confusing similarity between a domain name and a trademark contained within it” and therefore, “the addition of a generic term and gTLD is insufficient to distinguish a disputed domain name from a mark under” the UDRP.

The decision in the Morgan Stanley dispute held that “the Domain Name is confusingly similar for the purpose of the [UDRP] to the MORGAN STANLEY mark in which [Morgan Stanley] has rights …” Moreover, under the UDRP, Morgan Stanley sought and received a transfer of the domain name from the cryptosquatter.

This is an important ruling for trademark owners faced with the rise of NFTs using their brands. There are several pending NFT-related domain name complaints to watch including “GEICONFT.com” and “ComerciaNFT.com”, for Geico and Comerica Bank, respectively. If you are a trademark owner, it is advisable to watch the NFT space for infringing activity using your marks and consider appropriate and swift action. The UDRP will be an important weapon for corporations to use in the ongoing and expanding battle against cryptosquatters trying to capitalize on the NFT craze.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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