Universal Music Group, one of the music industry’s three majors and owner of a record label called Republic Records, is suing OpenDeal, Inc., a fintech startup that runs a crowdfunding investment platform called Republic.
Trademark law does not protect your mark against all possible competing uses. If two companies want to use the same mark in completely different industries or in completely different geographic markets, they may both be able to register their marks. So it might surprise you that a record label is suing an investment platform over the relatively milquetoast name “Republic.”
Well, that’s because one of the investment products available on OpenDeal’s Republic is the ability to purchase equity shares in music royalties. The name of this product? Republic Music:
On October 7, 2021, [OpenDeal] sent out an email announcing the launch of “Republic Music,” which it described as a “way for artists to raise capital from their fans through investing, and in exchange, the fans receive equity in the rights to the royalties” from that artist’s songs or albums.
UMG Recordings, Inc. v. OpenDeal, Inc. d/b/a Republic, Case No. 1:21-cv-09358-AT, at 3 (S.D.N.Y. July 5, 2022).
So last November, UMG brought suit against OpenDeal in the Southern District of New York for trademark infringement and unfair competition. On its face, you have two companies selling music-related goods and services, one using the name “Republic Records” and the other using the name “Republic Music.” Without further details that may sound like a good candidate for an infringement suit.
But earlier this week a judge denied UMG’s motion for preliminary injunction, stating that UMG failed to show likelihood of confusion or even that the claimed mark is deserving of protection.
Can You Claim Trademark Rights In A Shortened Version Of Your Mark?
UMG holds a valid federal trademark registration for its REPUBLIC RECORDS word mark and for its related design mark. The problem for UMG, however, is convincing the court that they have common law trademark rights over the term REPUBLIC, not REPUBLIC RECORDS.
The court held that other than a couple of decades’ old examples, UMG failed to provide much evidence they have used REPUBLIC to identify its goods and services. Any example UMG provided that referred to the label as “Republic” was always just a shorthand following a previous reference to “Republic Records.” This distinction was fatal, and the court said UMG failed to show this shortened version of Republic Records deserves common law trademark protection.
It’s important to note that if UMG had more (and more recent) evidence of bona fide trademark use of the REPUBLIC name, this could have gone completely differently. Contrast this case, for example, with how “Calvin” is often used as shorthand for CALVIN KLEIN. I’m not sure if CALVIN is registered with the USPTO, but it has certainly gained secondary meaning and is worthy of trademark protection.
What’s The Likelihood Of Confusion?
The court went on to say that even if UMG did deserve common law trademark protections for REPUBLIC, it had failed to show a likelihood of confusion. In making this decision it went through the Polaroid factors, stating that the majority of them weighed against UMG. A few examples:
1. Strength of the mark: UMG showed no acquired distinctiveness or secondary meaning for REPUBLIC. Standing on its own, the court stated, it is a very weak mark.
2. Similarity of the marks: The court noted that both UMG and OpenDeal’s marks “are sufficiently distinct as presented in the marketplace.” Id. at 12. Their respective logos are totally dissimilar and “are prominently shown in connection with their products and services, on their respective websites and social media, and in media coverage of each entity.” Id. at 13. So while the word “Republic” appeared in all contexts for both companies, the overall presentation and usage of the marks, when taking into account logos, fonts, and colors, was not similar at all.
3. Proximity between goods and services: “[T]he fact that both parties’ products exist within the same industry is not enough.” Id. at 14. UMG’s products and services (records and recording artist promotional services) are nothing like OpenDeal’s (investment opportunities to purchase revenue-generating assets).
The court said these three factors are more important than all the rest of the Polaroid factors, so even if the remaining factors weighed in UMG’s favor that wouldn’t be enough for the court to conclude there’s a likelihood of confusion.
This decision goes to show that the evidentiary burden for showing likelihood of confusion may not be impossibly high for a motion for preliminary injunction, but bare assertions of similarity and likelihood of harm won’t cut it.
Full decision: UMG Recordings, Inc. v. OpenDeal, Inc. d/b/a Republic, Case No. 1:21-cv-09358-AT (S.D.N.Y. July 5, 2022)