A large Australian payments company filed a suit last week in New South Wales over the use of the trademark “PAY ID.” The company, New Payments Platform Australia (NPPA), says Ripple illegally used its brand.
The federal suit alleges that the trademark “PayID” was developed by NPPA. It also said that millions of dollars had been poured into an advertising campaign for the brand. PayID was launched by NPPA in February 2018 and the $3.3 million AUD campaign included international advertising.
Importantly, the trademark’s reach went beyond the borders of Australia.
NPPA maintains that Pay ID was a well known part of their company in 2018. It bought the website www.payid.com.au. Furthermore, NPPA used the trademark during the Sibos conference where 7500 delegates became aware of it.
There are over 90 financial institutions which use PayID. This includes 10% of NPPA’s customer base and five million distinct “Pay IDs,” which process over a million transactions a week, the suit claims. Furthermore, in the wake of the pandemic, the number of those transactions has been growing.
The public became aware of the suit earlier in the week and the court published documents on Tuesday. A case management hearing took place on Wednesday.
NPP Australia — the operator of the New Payments Platform — appears to be suing Ripple Labs in an IP case pic.twitter.com/JLfWsySzI8
— Rohan Pearce (@rohan_p) August 24, 2020
NPPA became aware of Ripple’s use of the phrase “PayID” in June 2020. This was two years after they had launched their own product.
Adrian Lovney, NPPA CEO, says he first heard about Ripple’s PayID after NPPA’s lawyer sent him an e-mail with a Fortune magazine article. The article described Ripple and its use of the trademark Pay ID.
Ripple used PayID in conjunction with 40 companies in the Open Payments Coalition. Several of those partners were based in Australia.
Mr. Lovney also gave evidence in an affidavit that some of the 40 partners mentioned in the Fortune article believed Ripple was working in affiliation with NPPA’s PayID system. This implies that Ripple, intentionally or not, was taking advantage of NPPA’s notoriety and the extensive advertising campaign.
Further evidence shows the casual use of the phrase “Pay ID” on Ripple’s website. The plaintiffs argue that the use of the phrase was meant to be construed as a trademark. In addition, Ripple’s service was similar enough to NPPA’s Pay ID that the public was misled into believing the two firms had an affiliation.
Despite these allegations, the legal timing of these arguments is a little murky. It appears that NPAA secured a copyright for “Pay ID” with a space in March 2017 in Australia, and filed for “PayID” without a space in October 2017.
However, the October application for “PayID” with no space lapsed. The Australian government did not issue the trademark.
While Ripple is the exception, most issues over crypto trademarks are due to centralization. In January 2019, a controversy erupted when the Litecoin foundation changed the Litecoin logo in an “undemocratic” way.
Unauthorized use of the Pay ID trademark and Ripple’s benefit from it seem to be the dominant questions of the suit. With different spellings, different registered trademarks, and different countries, the suit is by no means straightforward.