Lightning Labs and Tari agree to convert restraining order in trademark suit


Bitcoin (BTC) software firm Lightning Labs and blockchain startup Tari Labs have agreed to convert a court-ordered temporary restraining order that halts the development of Lightning’s Taro protocol.

In a March 15 filing, lawyers for both Lightning and Tari proposed converting the restraining order to a preliminary injunction — a temporary order that prevents a party from undertaking certain actions.

The order’s conversion to a preliminary injunction would stop the development of the protocol until a court decision is reached.

The two firms agreed that Lightning would still not make updates to the Taro protocol, merge internal updates with the protocol’s public-facing open-source code, and could not announce or otherwise launch “the next stage or ‘milestone’ of the TARO protocol.“

Lightning was permitted, however, to respond to communications from non-Lightning developers and users if it does not use those communications to further Taro’s development.

It could also reference Taro as the “prior name of the protocol” for announcements pertaining to changing the protocol’s name — as long as it was “not confusingly similar” to Taro or Tari.

The temporary restraining order was issued on March 13 by California District Court Judge William Orrick after Tari Labs said the name “Taro” infringed on its trademark rights as it was too similar to its own protocol named “Tari” — a registered trademark in the United States.

As a result, Lightning Labs has been unable to make updates to or regarding the Taro protocol.

Tari Labs first filed a complaint for trademark infringement against Lightning Labs on Dec. 8, alleging both firms “compete in the same digital blockchain ecosystem” and provide similar, “in some cases identical,” services.

Both firms also “market to similar developers and users, and appear on the same blockchain platforms,” according to Tari.

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News of the restraining order prompted a backlash on Twitter. Tari Labs co-founder, Riccardo Spagni, defended the lawsuit, arguing in a March 15 tweet that the letters “I” and “O” are close enough together on a computer keyboard to cause confusion and that Tari offered to fund Taro’s rebrand a year ago.

The lawsuit was similarly defended by Tari co-founder Naveen Jain, who suggested in response to a Twitter user calling the suit “frivolous” that “it’s hard to call something ‘frivolous’ when a judge issues a temporary restraining order in your favor.”

Lightning Labs develops software for the Lightning Network, a layer 2 solution for the Bitcoin blockchain, which allows for cheaper and faster transactions than those executed on the base layer.

Its Taro protocol is an ambitious project announced on April 5, 2022, amid a $70 million funding round. It planned to build upon Bitcoin’s Taproot upgrade and allow stablecoins to be transferred via the Lightning Network.