Lightning Laboratories and Tari Labs have reached an agreement to convert a court-ordered temporary restraining order that halts the development of Lightning’s Taro protocol.
In a March 15 filing, attorneys for both Lightning and Tari requested modifying the restraining order into a preliminary injunction—a temporary order prohibiting a party from engaging in certain conduct.
The modification of the order into a preliminary injunction would halt the protocol’s development until a judicial ruling is made.
The two companies reached an agreement that Lightning will not upgrade the Taro protocol, combine internal modifications with the protocol’s public-facing open-source code, or otherwise publish or launch “the next step or milestone of the TARO protocol.”
Nonetheless, Lightning was authorized to reply to messages from non-Lightning developers and users so long as it did not utilize these discussions to further Taro’s development.
It might also refer to Taro as the “previous name of the protocol” in announcements about renaming the protocol, so long as the reference was “not confusingly similar” to Taro or Tari.
The temporary restraining order was granted on March 13 by California District Court Judge William Orrick after Tari Labs claimed that the word “Taro” infringed on its trademark rights because it was too close to its protocol, “Tari”—a trademark registered in the United States.
As a consequence, Lightning Labs has been unable to implement protocol changes for the Taro system.
Tari Labs first filed a trademark infringement action against Lightning Labs on December 8, stating that both companies “operate in the same digital blockchain environment” and provide similar, and in some instances identical, services.
According to Tari, both companies “market to comparable developers and users and appear on the same blockchain platforms.”
The news of the restraining order provoked a Twitter reaction. Riccardo Spagni, the co-founder of Tari Labs, justified the lawsuit in a March 15 tweet, stating that the letters “I” and “O” are close enough on a computer keyboard to create misunderstandings and that Tari offered to support Taro’s rebranding a year before.
In response to a Twitter user who called the case “frivolous,” Tira co-founder Naveen Jain said, “It’s difficult to label anything ‘frivolous’ when a court gives a temporary restraining order in your favor.”
Lightning Labs creates software for the Lightning Network, a Layer 2 solution for the Bitcoin blockchain that enables cheaper and quicker transactions than the base layer.
The Taro protocol is an ambitious project that was unveiled on April 5 in conjunction with a $70 million financing round and promises to build upon Bitcoin’s Taproot update and enable stablecoin transfers over the Lightning Network.
