Memecoins
Meme token ZynCoin makes things right with tobacco giant Philip Morris
The founder of ZynCoin, a meme token named after a hyper-popular nicotine pouch, has extinguished a legal threat from the Fortune 500 tobacco giant behind the cigarette replacement.
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, called for putting the token in the proverbial ashtray.
ZynCoin was to immediately stop all use of “ZYN Coin,” “ZynCoin,” and any references to ZYN products or any other confusingly similar images of the ZYN brand, the letter said.
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 from the whole of Zyncoin, which was problematic because it is etched into the smart contract and the on-chain currency,” Kirkpatrick told CoinDesk in an interview. “There is no ‘off’ button.”
Nor is there any entity, centralized or otherwise, behind the Zyn token, which runs on the Ethereum blockchain. So Kirkpatrick was limited in what he could do to satisfy the Philip Morris trademark.
Philip Morris eventually got the message, and after speaking with Kirkpatrick and his lawyer, the company backed down on its demands.
“They went from wanting the entire project to cease and desist to, after doing research, realizing that they couldn’t easily sue or stop the coin due to its decentralized nature,” Kirkpatrick said.
“For the avoidance of doubt, Kirkpatrick may use ‘$ZYN’, ‘ZynCoin’, ‘Zyncoin’ and ‘ZYNCoin’ (the ‘Permitted Marks’),” a final version of an agreement between the tobacco giant and Kirkpatrick reads.
Kirkpatrick’s lawyer pointed out to Phillip Morris that there are many other companies with zyn in their names and any infringement created by the Zyn token would be minimal because it is not a competing product to nicotine pouches.
The compromise: Adding a dollar sign in front of “Zyn” to clearly indicate that Zyncoin is a cryptocurrency, and removing references to specific circular containers from the project’s website to avoid possible branding confusion.
An email to the U.S. general counsel of Swedish Match, the Philip Morris subsidiary responsible for Zyn, was not responded to.
The setback may be a sign of future disputes meme coins takes its name celebrity OR consumer products without any formal ties proliferating. It also shows that brands or celebrities can only do so much to stop crypto projects from relying on their names.
“The practicalities of enforcing compliance within a decentralized community present unique challenges,” said Florida-based digital assets lawyer John Montague, who was not involved in the case. “Although the founder can modify the website to remove infringing materials, the decentralized decision-making inherent to DAO It adds another layer of complexity.”
For example, “token holders may refuse to approve proposals to change the details of the chain, making it difficult to comply with legal requests,” Montague said.
But all of these relied on centralized entities as hosts. Entities that could be served.
Ross Feingold, special counsel at Titan Attorneys-at-Law in Taiwan, told CoinDesk that if sufficient efforts were made, there could be means to serve on-chain entities through a non-fungible tokenalthough this may take a lot of time and money.
“You might still find it prohibitively expensive to start sending out demand letters,” he said.
“But I can imagine where there would be some situations where you say, ‘we’re not suffering any harm here,’” Feingold continued, noting that there is no clear case of brand harm or confusion with the token and the Zyn bag .
After all, Zyn token holders buy the token out of admiration for the product, the coin is free advertising for a company that can’t buy it. Philip Morris and other tobacco giants have been banned from advertising their products TV in the United States since the 1980s. Then in 1998the Clinton White House cut public transportation, billboards and product placement, virtually killing tobacco advertising altogether.
Montague said it might be a case of saying the Zyn token is a travesty.
“For branding purposes, a parody must convey the dual message that it is the original but also that it is not, and serves as a form of satire, ridicule, joke or entertainment,” Montague explained.
He was quick to add that the satire argument has been attempted before in the cryptocurrency world and ended up burning the defense.