Memecoins
Meme token ZynCoin reconciles things with tobacco giant Philip Morris
The founder of ZynCoin, a meme token named after a wildly popular nicotine pouch, has snuffed out a legal threat from the Fortune 500 tobacco giant behind the cigarette substitute.
Philip Morris, the Fortune 500 company that owns Zyn maker Swedish Match, sent ZynCoin founder Colton Kirkpatrick a cease-and-desist letter in the first week of April. The letter, reviewed by CoinDesk, demanded that he toss the token into the proverbial ashtray.
ZynCoin was to immediately cease all use of “ZYN Coin,” “ZynCoin,” and any reference to ZYN products or any other imagery confusingly similar to the ZYN brand, the letter states.
Kirkpatrick said he backtracked and reached a compromise: The “zyn” prefix will remain in the token’s name, but the team behind it will make minor changes to its marketing.
“They wanted to cease and desist the entire Zyncoin, which was problematic because it’s etched into the smart contract and the on-chain coin,” Kirkpatrick told CoinDesk in an interview. “There’s no ‘off’ button.”
There is also no entity, centralized or otherwise, behind the Zyn token, which runs on the Ethereum blockchain. Kirkpatrick was therefore limited in what he could do to satisfy Philip Morris’ trademark.
Philip Morris eventually realized this and after speaking with Kirkpatrick and his lawyer, the company dropped its demands.
“They went from wanting the whole project to cease and desist to, after doing some research, realizing that they couldn’t easily continue or stop the currency because of its decentralized nature,” Kirkpatrick said.
“For the avoidance of doubt, Kirkpatrick may use “$ZYN”, “ZynCoin”, “Zyncoin” and “ZYNCoin” (the “Authorized Marks”),” reads the final version of an agreement between the gaming giant. tobacco and Kirkpatrick.
Kirkpatrick’s lawyer pointed out to Phillip Morris that there are many other companies with the word Zyn in their name and that any infringement created by the Zyn token would be minimal as it is not a competing product of the nicotine sachets.
The compromise: adding a dollar sign in front of “Zyn” to clearly indicate that Zyncoin is a cryptocurrency, and removing references to specific circular title blocks on the project’s website to avoid possible brand confusion.
An email to the U.S. legal counsel for Swedish Match, the Philip Morris subsidiary responsible for Zyn, was not returned.
Setbacks can be a sign of future arguments coins named after celebrities Or consumer products Companies that aren’t officially tied to corporations are proliferating. It also shows that brands or celebrities can’t do much to stop crypto projects from piggybacking on their names.
“The practicalities of enforcing compliance within a decentralized community present unique challenges,” said John Montague, a Florida-based digital asset attorney who was not involved in the case. “Even if the founder can edit the website to remove infringing material, the decentralized decision-making process inherent in DAO adds another layer of complexity.
For example, “token holders could refuse to approve proposals to change chain details, making it difficult to comply with legal requirements,” Montague said.
But all of this relied on centralized entities as hosts. Entities that could be served.
Ross Feingold, special counsel for Taiwan’s Titan Attorneys-at-Law, told CoinDesk that if enough effort is put in, there could be ways to serve blockchain entities through a non-fungible tokeneven though it can be time consuming and expensive.
“You might simply consider the cost of starting to send demand letters to be prohibitive,” he said.
“But I can imagine there are situations where one could say, ‘We’re not really being harmed here,'” Feingold continued, noting that there is no clear case of trademark damage or confusion with the Zyn token and cover art.
After all, Zyn token holders buy the token out of admiration for the product, the coin is free advertising for a company that cannot buy it. Philip Morris and other tobacco giants have been banned from advertising their products on Television in the United States since the 1980s. Then in 1998The Clinton White House eliminated public transportation, billboards and product placements, virtually killing tobacco advertising.
Montague said there might be a reason to say the Zyn token is a parody.
“For trademark purposes, a parody must convey the dual message that it is the original but also that it is not, and serve as a form of satire, ridicule, joke or entertainment,” Montague explained.
He was quick to add that the satire argument had been tried before in the crypto world and ended up burning the defense.