Despite branding itself Backt before the Intercontinental Exchange took up the name Bakkt for its popular crypto exchange, Backt was forced to change its name to 0xFutures due to the nature of the United States trademark system.
Bakkt is a popular crypto exchange owned by the Intercontinental Exchange (ICE), the same company that owns the New York Stock Exchange (NYSE). It was the first exchange to offer Physical Bitcoin Futures and has plans to drastically expand crypto adoption.
These days, Bakkt is a well-known name in the crypto space, but well before Bakkt existed, there was Backt, whose development began in 2017.
Cyril Houri, co-founder of Backt, changed the name to 0xFutures so he could continue working on the project. He said the futures product that 0xFutures offers cannot run on fractional reserves since the money for each trade is stored in a blockchain smart contract. Each trade is backed by crypto locked in a smart contract, which is how they came up with the Backt brand.
ICE announced the launch of Bakkt in August 2018 and filed a trademark application in July 2018. In response, Backt filed an imposition saying they were using the name first, providing proof such as the Backt domain name, transactions on the blockchain, and a GitHub account.
Houri said that Backt tried to settle, but Bakkt refused to participate in negotiations. Crypto.IQ attempted to get Bakkt’s side of the story, but a spokesman for Bakkt said the story was fabricated. Upon sending Bakkt the substantiating court documents, the company had no comment.
After Bakkt declined to settle, the case moved into the discovery process during which Backt provided the evidence to prove its claims.
Houri claims that Bakkt filed nothing and essentially indicated that it was not going to ‘play along.’ Instead, the company used its deep pockets to win what would have been a protracted legal battle.
Backt had already spent $50,000, a fraction of the hundreds of thousands more it would need to win. Since Backt was an open-source project with scant funding, the company had no chance of winning a legal case against a goliath like Bakkt and ICE that essentially had unlimited legal resources.
Ultimately, Houri changed the name of the project to 0xFutures and will no longer use the name Backt.
“The big guys always win,” he said, adding that Bakkt did not provide 0xFutures with any compensation.
Moving forward, 0xFutures cannot use the name Backt without facing a lawsuit it would lose.
The moral of this story is that crypto and blockchain companies and organizations should be careful to trademark their names.
Houri said he did not trademark the name Backt because he thought no one would ever try to take the name, and the cost of getting a trademark is around $10,000.
Basically, without paying for a trademark, a blockchain or crypto company can easily have its name swiped and risk having to spend hundreds of thousands of dollars on lawyers to protect their brand. Ten thousand dollars for a trademark may seem expensive, but it is a lot cheaper and less frustrating than dealing with a major corporation claiming the name in the future.