Fintech Startup Fights Trademark Claims from Firm Tied to Rival

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A trans-Atlantic trademark dispute pits one of the most talked-about startups in the emerging blockchain technology field against a futures exchange whose founder is involved in another ballyhooed blockchain firm.

Eris Exchange, an over-the-counter futures market based in Chicago, is trying to stop Eris Industries, a London tech startup with an office in Essex, Conn., from using the name Eris in markets where both companies operate. (Fittingly, the word is Greek for "strife.")

"There exists a likelihood of confusion on the part of the relevant public," who are "likely to consider that the goods and services at issue are provided by the same undertaking," Eris Exchange said in a filing last month with the U.K. Intellectual Property Office.

Preston Byrne, chief operating officer and general counsel at Eris Industries, called the reasoning "absurd."

"Our customers are system architects; theirs are exchanges and traders," Byrne said. "We make a command-line blockchain database toolkit; they have an interest rate swap contract methodology and a market that trades them. There is no way that anyone is going to confuse these two brands."

However, Eris Exchange has a connection to the nascent business of creating distributed ledgers. The company's founder and a board member, Don Wilson, is also a cofounder and board member of Digital Asset Holdings, the blockchain startup led by former JPMorgan Chase executive Blythe Masters. And since blockchain technology is seen as a potential way to bring efficiencies to financial contracts, it's conceivable that Eris Exchange might have its eye on the space.

"It seems like Eris Exchange is grasping for something, that maybe they're trying to scare away Eris Industries," said Patrick Jennings, a partner in the intellectual property practice at Pillsbury Winthrop Shaw Pittman. What Eris Exchange might want to do in the future can be just as significant as what it does now, said Jennings, whose firm does not work for either Eris.

Eris Exchange and Digital Asset Holdings declined to comment for this story.

A blockchain is a shared ledger that publishes all transactions on a network such as Bitcoin, which typically are near-instant, irreversible and validated by anonymous participants. Permissioned blockchains in particular — those that restrict network access to trusted parties — have been touted for their potential to reduce costs, risks and inefficiencies in banking and payment systems.

Eris Industries writes software allowing anyone to enable blockchain technology for self-executing "smart" contracts, compliance functions and nonfinancial applications. (The software is free and open-source; the company aims to charge for support services.) Byrne said his company works with a number of global banks interested in its commercial approach to blockchain technology and its technological solutions for bank IT infrastructure. Digital Asset Holdings focuses on using the blockchain for asset trading, clearing and settlement in and between banks and other financial institutions.

"We invented the permissioned blockchain," Byrne said. "We're known for that. Nobody has once called us up to talk about interest rate swap futures."

In mid-January, Eris Exchange sent a cease-and-desist letter to Eris Industries opposing the filing of its U.K. trademark, which became fully registered in mid-February. Later in February, Eris Exchange filed for the Eris mark in the U.S., which was published in late July.

In June, Eris Exchange filed in opposition to the Eris mark in the U.K. And last week, it filed to oppose Eris Industries' Dec. 10 U.S. trademark filing.

Jennings, a former trademark examining attorney at the U.S. Patent and Trademark Office, said Eris Exchange's claim appears weak.

Similarities between names are one of many factors of trademark infringement but how similar or dissimilar the parties' services are is also strongly considered, Jennings said. In the U.S. alone he found about 40 registered marks with the word Eris in their names. "If they can't provide any evidence of overlap, typically these cases don't go very far."

Nevertheless, Eris Exchange's actions are typical for trademark rights owners, Jennings said. It's possible the company has a watch service in place that allows it to identify who's filing what types of marks. Filing these oppositions, he said, is certainly not unusual.

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