Chia Network is threatening XCHScan for trying to compete with Chia Explorer

In a stunning move, The Chia Plot has seen evidence that Chia Network is threatening XCHScan.com with trademark infringement for basically trying to compete with Chia Explorer. In their communications they tell XCHScan to “immediately cease in desist approaching farmers who are using the official chia explorer in an attempt to divert them to your own services”. This is simply incredible, and in my mind far worse than what they tried with me and a way different issue than their threats against the forks.

There’s a lot to unpack here, so I am going to begin with the timeline. First, a representative from Chia Network reached out XCHScan on their website to approach them with a Trademark licensing agreement. I don’t think they need one, legally, but so far perfectly fine. Assuming the message isn’t threatening, which this one was. That message is here.

Name Chia Network Inc. Trademark License Email [email protected] Message We write to you on behalf of the Chia Network Inc. First and foremost Chia Network thanks you for your efforts in educating and expanding the Chia community through your platform. We support open discourse and free exchange of information. Chia Network is a proud owner of several trademark registrations and applications (collectively the “CHIA Marks”) including the following: MARK Reg.No./App. No. CHIA U.S. Reg. No. 6428600 CHIA WIPO Reg. No.1446696 CHIA Singapore Reg. No.40201923445T CHIA EU Reg. No. 017930981 CHIA UK Reg. No.00917930981 CHIA Switzerland Reg No. 745390 CHIA U.S. Serial No.90/753383 CHIA India App. No. 4911152 CHIA Canada App. No. 1907024 Chia Logo. U.S. Serial No. 90/753495 Chia Logo U.S. Serial No. 90/753461 ChiaLeaf Logo U.S. Serial No. 90/753591 ChiaLeaf Logo U.S. Serial No.90/753567 Chia Logo Singapore Application No. 40202114717V CHIALISP WIPO Reg. No.1586872 CHIALISP U.S. Serial No. 90/098407 CHIALISP Canada App. No. 2083056 CHIALISP EU App. No. 018392407 Chia Network must remain vigilant in enforcing its trademark rights. Unauthorized use of Chia Network’s registered CHIA Marks exposes community members to potential scammers misleading and confusing them. Moreover Chia Network cannot support violations of privacy laws and cannot condone behaviors that target or endanger any member of the Chia community. The Chia Network Trademarks and Copyrighted Materials Use Guidelines make it easy for the community to remain connected while maintaining a respectful and professional relationship with each other. Therefore it is essential that all users of the CHIA Marks logos or the Chia Network name obtain a written permission to use the CHIA Marks in connection with identical or confusingly similar services. It has come to Chia Network’s attention that you are using the CHIA Marks and Chia Logo without authorizations. Because your use of the CHIA Marks appears to align with Chia Network’s mission of building a better blockchain and smart transaction platform which is more decentralized more efficient and more secure you may be able to secure a royalty free license to use the CHIA Marks. Please contact us at [email protected] immediately and no later than August 3 2021 so that together we can take the next steps in working as one community. Sincerely Chia Permissions

First off, I highly doubt that XCHScan is creating privacy issues by posting public blockchain data or doing anything that targets or endangers anyone. That is a ridiculous and offensive claim. But it really does get worse from here. XCHScan then followed up with a super polite response that we know I couldn’t have mustered after something like this.

Hello,   Thank you for your email.   I’m Luke from xchscan.com, and reaching out to you in regards to your email concerning the Chi Network Inc. trademark license.   We are happy to comply with your request and would like to know the next steps.    If you wish to continue the conversation over the phone, let’s set up a time to talk. We are currently in GMT+7.   Best regards,

Which was followed up with another relatively pleasant reply.

Luke,   Thank you for your reply. We are happy to work with you.   We will need the following for executing a license agreement between your pool and Chia Network:   (1) Please list the kind of uses you plan to make of the Chia mark (where will it be? will it be the word mark CHIA, or the Green CHIA LOGO, or the CHIA LEAF LOGO?).   (2) Please tell us the name, address and phone number where your company may be reached (to be input into the licensing agreement).   (3) Please tell us the name and title/job of the authorized signatory for the license.   Once we have that information and are able to verify the existence of your pool, we will send out a license agreement for your signature via Docusign.   Please let us know if you have any further questions or concerns.   Sincerely, Chia Network IP Team

Luke was then getting those sorted out when 2 days later he received this far more threatening email from Chia Legal. You will notice that to this point there was no rush or timeline anywhere, this was just two companies working out an agreement and sorting out the details on how they would do that.

Luke,   We are following up on our earlier conversation.   We appreciate you removing the Chia Logo from the bottom of your site. However, we noticed that you are still using the CHIA mark in your domain name, chiarex.net, which re-routs farmers to your https://xchscan.com/ site.   Additionally, we learned that you have been approaching licensed pools, proposing that they discontinue the use of the official chia explorer and begin using https://xchscan.com/ statistics instead, in exchange for being featured on your site.  As you do not have permission to use the CHIA Marks in connection with cryptocurrency services, your continued use of the CHIA Marks for the competitive and related goods and services will cause Chia Network irreparable injury in the form of customer confusion, diversion of trade, and dilution of the distinctive quality of Chia Network’s CHIA Marks. Such use constitutes infringement and unfair competition .   We require your prompt written assurances that you will cooperate in taking immediate steps to halt the infringement of Chia Network’s CHIA Marks.  Specifically, Chia Network requests that you:   (1)   Immediately cease and desist use of the CHIA Marks and any other intentional imitations or uses of the mark CHIA, in connection with any and all blockchain and smart transaction services and products, including services and products related to operating in the cryptocurrency space, including removing the CHIA mark from your chiarex.net domain name;                (2) Remove any and all websites and social media pages displaying the mark in connection with any and all blockchain and smart transaction                   services and products, including services and products related to operating in the cryptocurrency space;                       (3) Immediately cease and desist approaching farmers who are using the official chia explorer in an attempt to divert their use to your own                         services.   Thank you in advance for your anticipated cooperation in resolving this matter.  We look forward to your prompt response.     Sincerely, Chia IP Team

First off, Chiarex.net is a Chia pool according to MiningPoolStats and from my understanding (and confirmed with XCHScan) is not affiliated with XCHScan, they just use XCHScan as a blockchain explorer. The same way I do. Because I like it more than Chia Explorer. They do not “re-route farmers” to XCHScan, they link to them. The same way I do.

But this one contains some serious bombshells. Basically this is a threat and demand that XCHScan shut down. And not because they are competing with Chia Network, but because they are competing with Chia Explorer. Who they apparently now consider to be the “Official Chia Explorer”. Mind blowing since both Chia Explorer and Chia Network have denied this in public. Where are they lying? When talking to you, or when making legal threats?

I cannot begin to describe how bad this is for a purportedly open source, decentralized blockchain. They seemingly want to shut down all other blockchain explorers so that only their “official” one is allowed to operate. How can we trust that? That is a simply insane place for a blockchain to exist. I cannot imagine the Ethereum Foundation trying to shut down a blockchain explorer that was providing correct data.

It continues with another email from XCHScan to Chia Network’s “legal team”.

Hello,   I find the tone of your second email extremely different to the first one. I am shocked and quite disappointed to receive this second email in less than 24 hours.   In response to your first email :   1) The official Chia logo was in our footer, that has been removed. Once the agreement is in place we can put it back there.   2) We are yet to be incorporated as a company. Would xchscan pick up and start to show signs of   financial success we would incorporated. As of now it is a personal project between 2 friends.   Details required for license agreement :   Name : Luke <REMOVE FOR PRIVACY>   Address : <REMOVED FOR PRIVACY>   3) Job/Title : Co Founder   In response to your second email :   First, we have removed the Chia logo from our website footer as a proactive and positive step towards our relationship.   Second, we do not own the domain chiarex.net and have nothing to do with it. May I know from what sources you have made this false claim ?   Third, we are approaching and have been approached by pools to list on our https://xchscan.com/chia-pools page. And yes, if the pool wishes to switch from using Chiaexplorer, that’s their choice, not mandatory.    In no way do we confuse any pool owner or pool user that we are an “Official Chia Explorer” or “Related to Chia Network”.   I would like you to clarify what you mean by the term “the official Chia explorer” when referring to chiaexplorer.com, who for reference, states in several occasions on this video that chiaexplorer.com is not an official explorer and has no particular relationship with Chia Network :  https://youtu.be/8Wpf8-VJUsU   In response to the three bullet points in your second email :   1) As mentioned above, we have nothing to do with the domain chiarex.net, do not control it nor own it. Please clarify from what source you are making this false claim.   2) We do not state in any pages of xchscan.com or on our Twitter page that we are directly linked to the Chia brand. It has never been nor will be in the goal to confuse users.   3) Please clarify “official Chia explorer”. We have never forced a pool owner to use our Explorer, it is their choice. If pool owners decide to use our explorer, it is their own decision, simply because our API is more complete or easier to use. Our services are free and will remain free.   Best regards,

Again, a response far more polite than I would have made. These guys are a real class act. XCHScan that is, not Chia Network. Chia Network is coming off like thugs here. Also, I do not want to reveal anyone’s personal information here, but a cursory look into trademark law in the country of origin for XCHScan suggests that they might face criminal penalties, including years of prison time, if they were found guilty of these allegations. This is not a joke.

Now we have a very sad attempt to prove their points from Chia. This one is… I don’t even know what to say. It shows a clear misunderstanding of how computers, the internet, cryptocurrencies and just life in general work.

Luke,   While this may be a misunderstanding, we would like to share the evidence we have uncovered regarding the connection between chiarex.net and xchscan.com, and the continued infringement of the CHIA mark.   Please view the video below taken 4 minutes ago.  The way we see it, this is as much of a problem for you as it is for us.  [Link removed as it was to a Chia Employee’s named Google Drive account. Stop using your real name and accounts to send threats if you don’t want it on the internet. Please. Video shared Below as Movie1]     Additionally, please view the printout of your Advertising  services page, using the CHIA Mark to sell your advertising services, and containing the following statements: “The Chia Ecosystem starts here,” “Gain exposure view the number #1 Chia Blockchain explorer for Chia,” “The Chia Blockchain Explorer,” etc.      We note that your Twitter Account claims that you are “Chia Network Block Explorer and Analytics Platform,” which, I am sure you would agree, is a statement misleading to the community. [Picture1]       Finally, you are using the Leaf Logo, which you have taken without authorization and incorporated into your own logo, all over your xchscan.com site, including as a favicon, and as your Telegram logo.    [Picture2] [Picture3] [Picture4]     Please advise on your proposed plan of action regarding these matters.  We understand that trademark law is complex, and, at times, confusing. If all of the above infringing activities were done without intent to damage, harm, mislead, or capitalize on the CHIA Marks goodwill, we expect that you will remove all unauthorized uses of the CHIA Marks from your website and social media sites in the next 48 hours.    Sincerely, Chia IP team

OK. Here we go. The pictures they included are below, in order.

Lets address their “evidence” here. First the video showing that Chiarex.net links to XCHScan.com. This is ridiculous and Chia Network should be embarrassed for using this for any purpose whatsoever. I’m going to dismiss this is a novice misunderstanding of the internet and move on.

As for the pictures. I am not a lawyer (but you can be sure good ones will get involved if Chia continues to pursue this) but there are two main things, claiming they are a “Chia Network blockchain explorer” which is factually true and their use of the green leaf logo. To the first point, I am not sure if that creates an issue for XCHScan or for Chia Network because they chose a completely generic descriptor as their company name. XCHScan does indeed report on the Chia network. Not the company, but the network. I don’t know how a blockchain explorer could operate without using that terminology and I don’t know how we can trust one that holds a revokable license from Chia Network, Inc, but this is something that will need to be sorted out because I am very concerned.

As for the logo. This one I honestly don’t know. In my communications to XCHScan I told them they might have to change their logo, but it is actually different – includes a scan icon and uses a different leaf. And on top of that they are saying they own a license to their logo for the purposes of using it. Honestly if I had to guess I would say its not too close and that XCHScan is probably good, but it could be an issue for them. They also were at the beginning using the Chia leaf logo to link to Chia Network, which I don’t think is an infringement but again I am not a lawyer.

XCHScan’s response to all this is in screenshot form from their phone, with Chia’s final response to them afterwards.

• 

• 

This is where the conversation ends. And to my knowledge they still have not actually received the agreement that Chia wants them to sign, just threats if they don’t. As you can see Luke was losing patience, and feels the way a lot of us do – that Chia Network is abusing their venture capital money in an attempt to muscle control over their supposedly “decentralized” network. Well. I think we know how much they really value decentralization considering they are willing to use their legal team to protect their friend’s business interests. Not their own, XCHScan does not compete with any services that Chia Network offers. None.

I reached out to Gene Hoffman at Chia Network and at first he was not aware of this action being done. He said “But on that final point we are very strong believers on the first amendment – just as you are” and when I explained a little more his answer was “That is in no way policy but I’d like to hear from my team first”. This is good to hear, but as long as people who have the power to execute legal threats in Chia Network’s name it is not really relevant to me who is making the threats.

When Gene did have a chance to look into the issue, very quickly I might add, he had the following to say. Im going to include it verbatim so there is no confusion. I think there is some merit to his arguments here, and I don’t know what the real answer is. But I do know the approach is appalling, the lack of accuracy when presenting evidence is sloppy and unprofessional, and the inability to listen when confronted with the fact that chiarex.net simply linking to XCHScan does not make them liable for that possible infringement is just boneheaded.

Note how he used to use our logo in white verbatim

and he still does as those are on his advertise page

he could keep using the leaf with a license though

Like I said, some of Gene’s points may be valid. Those are observable facts. The leaf is very close, he is referring to “the Chia Network” which is might be confusing. But XCHScan didn’t create that confusion, Chia Network, Inc did by creating a “decentralized” product called “the Chia Network” and releasing it into the community. How can one reference the Chia Network without saying “Chia Network”? The use of the Chia logo next to sponsored might be an issue to be honest, I didn’t see that before Gene pointed it out and I personally wouldn’t put that on my site.

He is also clearly still getting incorrect information from his staff regarding the relationship between Chiarex and XCHScan, as well as mistaken that XCHscan is using “their leaf”. They are using “a leaf”, along with other items, in their own logo. That is a far different story. Possibly still an infringement, but I don’t know. He says that XCHScan could use the leaf with a license, but as you can see XCHscan asked for one multiple times and only received more threats.

And as for the Chia Explorer “official blockchain explorer” status. I plan on reaching out to Freddie to see what he thinks about Chia threatening people on his behalf.

Update: I spoke with Freddie from Chia Explorer and, unsurprisingly, he had no idea this was happening.