Coinbase hit with proposed trademark lawsuit over Nano derivative products

Crypto exchange Coinbase has been named as a defendant in a legal complaint brought by NanoLabs – the company behind the digital currency Nano (NANO) – over alleged trademark infringement. 

In the Feb. 24 filing with the California Northern District Court, NanoLabs alleged Coinbase’s Nano Bitcoin futures contract and Nano Ether futures contract products infringe on trademark rights owned by them.

It’s also alleged the infringement has caused NanoLabs economic detriment and weakened its brand identity, resulting in “actual damage and irreparable harm.” 

Colin LeMahieu founded the Nano digital currency in 2014; which was originally named RaiBlocks. It was rebranded to Nano on Jan. 31, 2018.

Years later, Coinbase launched its Nano Bitcoin futures contract on June 27, 2022, and its Nano Ether futures contract on Aug. 29, 2022.

Coinbase Derivatives Exchange has launched Nano #Bitcoin Futures.

Here are the brokers we’ve partnered with for you to trade it: @Tradovate@NinjaTrader@IronbeamFutures@RealEdgeClear@S5Trading@optimusfutures pic.twitter.com/jDD23hC1iv

– Coinbase (@coinbase) June 29, 2022

In the complaint, NanoLabs argued the offerings launched by Coinbase are “derivative products” based on Bitcoin (BTC) and Ethereum (ETH), which “are identical or highly similar” to its digital currency Nano.

It also argued that Coinbase targets the same type of consumers as NanoLabs, being “those seeking to invest in, and utilize, a digital currency,” and that the trademarks for Coinbase’s products “are identical, and […] confusingly similar,” to NanoLabs.

It also alleges that Coinbase had full knowledge of the Nano digital currency before launching its products due to correspondence between the two companies starting in 2018, which later resulted in Coinbase allegedly denying NanoLab’s application to list Nano on Coinbase. 

Nano is #DigitalMoney that can be spent, sent and accepted anywhere in the world.

An easy to use, sustainable currency that is open to all

Visit https://t.co/XGTa4OlvAr to learn more. pic.twitter.com/ZWvfSFLLtO

– Nano (@nano) August 30, 2022

“Thus, since at least October 17, 2018, various department heads and directors, as well as associates, in various departments at Coinbase were familiar with the Nano Digital Currency.”

NanoLabs further argued that Coinbase should “have known that offering Nano Bitcoin on the Coinbase Derivates Exchange would only further consumer confusion.” 

“Particularly because the Nano Digital Currency is not listed on the Coinbase Exchange, and Defendants’ provide no disclaimer, distinction, or otherwise to educate consumers to this point,” the court documents read.

Related: Judge dismisses proposed class-action suit alleging Coinbase securities sales

NanoLabs is asking the Court for an injunction against Coinbase to stop them from using the word “Nano” and all associated trademarks and domain names of a similar nature.

NanoLabs is also seeking at least $5 million in damages, corrective advertising from Coinbase, destruction of all materials infringing on the Nano trademark, and forfeiture of all profits Coinbase made using Nano trademarks. It has requested a jury trial.

Excerpt from NanoLabs complaint against Coinbase. Source: Courtlistener

Cointelegraph reached out to both Coinbase and NanoLabs for comment but did not receive a reply by the time of publication.