The founder of ZynCoin, a meme token inspired by a popular nicotine pouch, recently dealt with a legal threat from Philip Morris, the tobacco giant behind Swedish Match, the manufacturer of Zyn. Philip Morris sent a cease-and-desist letter to Colton Kirkpatrick, the founder of ZynCoin, in early April. The letter demanded that all references to “ZYN Coin,” “ZynCoin,” and any images resembling the ZYN mark be discontinued immediately.
Kirkpatrick made efforts to negotiate with Philip Morris and eventually reached a compromise. The prefix “zyn” would remain in the token’s name, but minor changes in marketing strategies would be made to address the concerns raised by the tobacco giant. Due to the decentralized nature of the Zyn token, there was no simple way to comply with Philip Morris’ initial demands.
After further discussions, Philip Morris realized the limitations of taking legal action against a decentralized project like ZynCoin. As a result, they revised their demands, allowing Kirkpatrick to use specific variations of the ZynCoin name. The agreement stated that Kirkpatrick could use ‘$ZYN,’ ‘ZynCoin,’ ‘Zyncoin,’ and ‘ZYNCoin’ as permitted marks.
The legal dispute between ZynCoin and Philip Morris highlights the challenges faced by brands and celebrities when dealing with crypto projects that use their names or likeness. The decentralized nature of blockchain technology and decentralized autonomous organizations (DAOs) adds complexity to enforcing compliance with legal demands.
While centralized entities like companies or individuals can issue cease-and-desist letters, enforcing such demands within decentralized communities presents unique challenges. Token holders in DAOs may resist changes that are required to comply with legal requests, making it difficult to resolve disputes effectively.
Previous attempts to stop unofficial crypto projects that reference real-world products, such as Nintendo’s actions against NFTs and Metaverse games, have shown that centralized entities can be targeted. However, serving legal notices to decentralized projects on-chain could be time-consuming and costly, deterring brands from pursuing legal action.
In the case of ZynCoin, the token serves as a form of admiration and free advertising for the Zyn product, rather than causing harm or confusion. Some legal experts suggest that the parody argument could be used to defend such projects, as long as they clearly differentiate themselves from the original brand and convey a satirical message.
Overall, the resolution of the legal dispute between ZynCoin and Philip Morris underscores the evolving landscape of trademark protection in the crypto space. As meme coins and fan-made projects continue to proliferate, brands will need to navigate the complexities of decentralized communities and blockchain technology to protect their intellectual property rights effectively.