First of all you can't claim to have copyrights on the word ''bitcoin'' nor the word ''penny'' They only have copyrights on ''BitcoinPenny'' as a whole, not separate. You can't claim copyright if someone decides to use ''bitcoin'' or ''penny'' just like ''wholefoods'' would not be able to claim copyright if someone uses the word food.
True, sort of. You're right that no person/company can trademark the individual words "bitcoin" or "penny." However, they can trademark the combination of those words, as in "Bitcoin Penny™." It's the same as the words "home" and "depot." Individually, they are non-trademarkable. Together, they are 100% trademarked.
Additionally, it's not just the words themselves that carry trademark weight. It's the category of product or service where that trademark is used. I am totally within my rights to create a hand-knit woolen doll that looks like a snow monster and call it the "Yeti" doll. However, I can not create a new beer cooler and call it the "Yeti" cooler without infringing upon an established trademark.
Does he claim copyright because someone uses "bitcoin" or "penny" or does he claim copyright because someone uses both and added Nasty between it?
It's trademark infringement "because someone uses
both and added Nasty between it."
In court, the question would be asked, "Would the average, reasonable consumer expect that the 'Bitcoin NastyPenny™' was affiliated with 'Bitcoin Penny™'?" If the answer is "yes," then it's trademark infringement. That's the whole reason for trademark law--to protect unknowing consumers from purchasing a service or product from one person/business while thinking it was affiliated with a different person/business. That's why they invented trademarks, to differentiate the service or product of one business from the service or product from another business. It's really very simple.
In this particular case, it boils down to the above question: "Would the average, reasonable consumer expect that the 'Bitcoin NastyPenny™' was affiliated with 'Bitcoin Penny™'?"
If the answer is "yes," then it's trademark infringement. If the answer is "no," then it's not trademark infringement.
Personally, I believe the answer is "yes." However, since we're not taking this to court, then it's really a moot point.
Regards,
Me
PS -- To play devil's advocate (because I find doing so exercises the mind), one might attempt to argue on OgNasty's behalf that the use of "Bitcoin NastyPenny™" should be allowable via protected parody laws. It may be a stretch to consider the product as a legally-defined parody, but it's worth considering as a possible exemption from trademark infringement.