The cryptocurrency marketplace can sometimes feel like the Wild West of trademark law – for example, there are several coins that feature very similar images of a particular breed of dog, the Shiba Inu. Perhaps it is the decentralized nature of cryptocurrency that makes obtaining and enforcing trademark rights a lower priority. However, as a recent case illustrates – at least one trademark owner is taking a stand against the free trademark spirit of the cryptocurrency marketplace.

The purveyor of the ‘JRR Token’ cryptocurrency, a resident of Florida, was hauled before the WIPO domain name disputes panel. The estate of JRR Tolkien, the departed author of the well-known novels The Hobbit and The Lord of the Rings series, argued that JRR Token was confusingly similar to the well-known JRR Tolkien family of marks, and that the corresponding domain name, ‘jrrtoken.com’, had been registered and used in bad faith. The WIPO panelist agreed and ordered the transfer of the domain name to the estate.

The registrant asserted that the domain name was not confusingly similar to the marks asserted and maintained that his use of JRR Token was a parody. Of course, parodies are based on confusion, but of a kind that society has decided is harmless or even helpful, so the domain name registrant’s argument seems a bit muddy.

The domain name registrant also asserted, without evidence or sufficient explanation, that JRR stands for ‘Journey through Risk to Reward’ and that the word ‘token’ is generic in the cryptocurrency market, thus implying that there was a plausible non-Tolkien related reason for him to have registered the domain name. Of course, his use of ‘One Coin to Rule Them All’ severely undercut his additional non-parody defense.  The panelist seemed at a loss to understand what the ‘Journey’ slogan had to do with cryptocurrency. One wonders whether the respondent would have been better to not assert this and simply attempt to better explain why a parody defense was in order.

The panelist directly addressed the parody defense and stated:

“the Respondent does not specify why the disputed domain name is humorous, funny or nail-biting, and not just a domain name chosen due to its similarities with the Complainant’s trademarks to take commercial advantage of its evocation. If the Respondent’s use was in relation to a genuine non-commercial parody website (see Johnson & Johnson v, Domain Protection Services, Inc., c/o Whois Agent / Danielle Baskin, Danielle Baskin, WIPO Case No.D2021-0947), the result may have been different, but that is not the situation here. The Respondent’s website is clearly a commercial venture, which is clever but not humorous.” (See The Tolken Estate Limited v Domain Investments / Matthew Jensen, WIPO Case D2021-2571.) There are several takeaways from this particular episode. First, just because you happen to like someone else’s literary work, this does not allow you to borrow its branding for your own commercial purposes. Second, if you intend to lampoon someone else’s work, stick to that argument instead of grasping at far-fetched excuses. Explain to the panelist why your use of the branding is both humorous and has social merit.

Finally, if you think that the use of the third-party branding has a major economic upside due to its cleverness (and no one has claimed that the JRR Token is not an ingenious play on JRR Tolkien), consider reaching out in advance to the brand owner to see if you can arrange a license. If you can show the value proposition to the brand owner, they may very well grant a royalty bearing license, which would be to the financial benefit of all involved. One does not simply use branding without permission. If one does, one will quickly learn that – especially for estates whose sole purpose is to enforce IP rights and to protect the image of a deceased author –  such branding rights are quite precious.

This article originally appeared in World Trademark Review Weekly on Dec. 9, 2021 and is reprinted with permission.