Spotify successfully opposes POTIFY applications based on dilution by blurring

In its first precedential decision of 2022, the Trademark Trial and Appeal Board (“TTAB”) sustained two oppositions filed by Spotify AB (“Spotify”) against registration of POTIFY for use in connection with an online ordering platform and community for medical and recreational cannabis consumers to connect with legal marijuana retailers.  Both oppositions were sustained on Spotify’s dilution by blurring claim, with the TTAB not reaching Spotify’s likelihood of confusion or dilution by tarnishment claims.  Spotify AB v. U.S. Software Inc., 2022 USPQ2D 37 (TTAB 2022).

The parties

Applicant U.S. Software Inc. (“Applicant”) develops sales systems, telemedicine systems and enterprise resource planning systems.  Applicant’s POTIFY platform is designed to permit legal marijuana dispensaries to market and sell their products, including via mobile applications and websites.  Spotify AB, 2022 USPQ2D 37 at *13–14.  Applicant sought registration of POTIFY, both  in standard characters, and stylized with the following design element:

for use in connection various services including downloadable software for use in searching, creating and making compilations, rankings, ratings, reviews, referrals and recommendations relating to medical marijuana dispensaries and doctor’s offices and displaying and sharing a user’s location and finding, locating, and interacting with other users and place, and clothing, namely, shirts, tops, t-shirts, hoodies, headwear, shorts.  Spotify AB, 2022 USPQ2D 37 at *1–2.

Opposer Spotify AB is a Swedish audio streaming and media services provider.  It is one of the largest music streaming service providers with over 406 million monthly active users, including 180 million paying subscribers.  Spotify offers digital copyright restricted recorded music and podcasts from record labels and media companies.  Users can search for music based on artist, album, or genre, and can create, edit, and share playlists.  Spotify AB, 2022 USPQ2D 37 at *7.

Opposer, Spotify AB, alleged in both of its notices of opposition prior common law rights and registration of SPOTIFY, in standard characters, for not only computer software for use in the delivery, distribution and transmission of digital music and entertainment-related content, but also entertainment services and a range of sound and television broadcasting services for music and films, on-line chat rooms and discussion forums for transmission of messages and digital pictures among users in the field of general interest.  Spotify AB, 2022 USPQ2D 37 at *2–3.

Basis of opposition

Spotify alleged dilution by both blurring and tarnishment.  To prevail, Spotify was required to show that (1) it owns a famous mark that is distinctive; (2) Applicant was using a mark in commerce that allegedly dilutes Opposer’s famous mark; (3) Applicant’s use of its mark began after Opposer’s became famous; and (4) Applicant’s use of its mark is likely to cause dilution by blurring or tarnishment.  N.Y. Yankees P’ship v. IET Prods. & Servs., Inc. 114 USPQ2d 1497, 1502 (TTAB 2015) (quoting Coach Servs. v. Triumph Learning LLC, 101 USPQ2d 1713, 1723-24 (Fed. Cir. 2021).  The TTAB chose to focus solely on dilution by blurring and not to reach whether use of Applicant’s  POTIFY mark is also likely to dilute Opposer’s SPOTIFY by tarnishment.  Spotify AB, 2022 USPQ2D 37 at *21–22.

Spotify mark is “exceedingly” famous

The TTAB had no trouble concluding that the SPOTIFY mark was famous based upon the evidence in the record.  There was no dispute that SPOTIFY was inherently distinctive and the TTAB turned to the question of whether SPOTIFY was sufficiently “famous” to qualify for protection against dilution.  Spotify AB, 2022 USPQ2D 37 at *21.

To be “famous,” the TTAB must determine whether the mark at issue “is widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the mark’s owner.”  N.Y. Yankees P’ship, 114 USPQ2d at 1502 (quoting 15 U.S.C. § 1125(c)(2)(A).  In doing so, the TTAB will consider:

(i) The duration, extent, and geographic reach of advertising and publicity of the mark, whether advertised or publicized by the owner or third parties.

(ii) The amount, volume, and geographic extent of sales of goods or services offered under the mark.

(iii) The extent of actual recognition of the mark.

(iv) Whether the mark was registered under the Act of March 3, 1881, or the Act of February 20, 1905, or on the principal register.

15 U.S.C. § 1125(c)(2)(A).

The TTAB reviewed the evidence of widespread use and recognition of the mark put forth by Spotify AB and highlighted the following as part of its “fame” analysis:

• Opposer “promotes its products and services under the SPOTIFY mark to a wide variety of consumers, including across age groups (from younger users to older listeners) and across all geographic regions in the U.S. (from West, Northwest, Midwest, South and others).”
• Opposer advertises in well known, national publications such as THE NEW YORK TIMES, THE WASHINGTON POST, VANITY FAIR and ROLLING STONE, as well as all of the major broadcast television networks, and many cable television and radio networks.  It also advertises itself in connection with, and gains publicity from, several nationally televised or distributed programs in a variety of genres, which we can safely assume exposes fans of those programs to the SPOTIFY mark, even if those fans are not prospective SPOTIFY customers.
• Opposer has “exclusive podcast partnership deals” with famous celebrities including Michelle Obama, Joe Rogan and Kim Kardashian West.
• Opposer’s “President of Playlists” job posting after President Obama expressed a desire to work for Opposer was so successful and engaging that it became “the number one trending moment on Twitter.”
• Opposer’s sales of goods and services offered under the SPOTIFY mark were quite significant prior to Applicant’s first use of its mark. In fact, in 2015, before Applicant’s first use of its POTIFY mark, Opposer had more monthly SPOTIFY users than most U.S. states had residents.
• Evidence of public recognition of the SPOTIFY mark was expansive. Opposer’s 23.3 million Facebook “likes” (and its millions of followers on other social media platforms) evidences widespread recognition of the mark by a substantial fraction of the United States population.
• Opposer’s search of the iWeb Corpus, an online database of 14 billion words, revealed that SPOTIFY had more Web “hits” than a number of other trademarks, including ROLEX, MCDONALD’S, AMERICAN EXPRESS, CHANEL and BARBIE.
• Opposer’s “President of Playlists” marketing effort was so widely recognized that it was “the number one trending moment on Twitter, and claimed the number one spot on Reddit.”
• Opposer’s SPOTIFY brand is so strong that it has been ranked among the “best” or most “relevant” in the United States and beyond. .
• Opposer also introduced empirical evidence that a substantial portion of the United States is aware of the SPOTIFY mark.
• Opposer’s SPOTIFY mark has been registered on the Principal Register in its broadest (standard character) form for almost 13 years. The incontestable Registration is not based on a claim of acquired distinctiveness.

Against this body of evidence, the TTAB had no hesitation in finding that SPOTIFY was “exceedingly famous.”  Spotify AB, 2022 USPQ2D 37 at *22–26.

Potify marks dilutes spotify mark by blurring

Dilution by blurring is “an association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark.”  Coach Servs., 101 USPQ2d at 1724 (quoting 15 U.S.C. § 1125(c)(2)(B)).  It “occurs when a substantial percentage of consumers, on seeing the junior party’s mark on its goods, are immediately reminded of the famous mark and associate the junior party’s mark with the owner of the famous mark, even if they do not believe that the goods emanate from the famous mark’s owner.”  N.Y. Yankees P’ship, 114 USPQ2d at 1509.

The concern is that “the gradual whittling away of distinctiveness will cause the trademark holder to suffer ‘death by a thousand cuts.’”  Nat’l Pork Board v. Supreme Lobster and Seafood Co., 96 USPQ2d 1479, 1497 (TTAB 2010).  Blurring may occur “regardless of the presence or absence of actual or likely confusion, of competition, or of actual economic injury.”  Omega SA (Omega AG) (Omega Ltd.) v. Alpha Phi Omega, 118 USPQ2d 1289, 1298 (TTAB 2016) (quoting 15 U.S.C. § 1125(c)).

To determine whether Applicant’s use of its mark is likely to cause dilution by blurring, the TTAB considered:

(i) the degree of similarity between Applicant’s mark and Opposer’s famous mark;

(ii) the degree of inherent or acquired distinctiveness of Opposer’s mark;

(iii) the extent to which Opposer is engaging in substantially exclusive use of its mark;

(iv) the degree of recognition of Opposer’s mark;

(v) whether Applicant intended to create an association with Opposer’s SPOTIFY mark; and

(vi) any actual association between Applicant’s mark and Opposer’s mark.

15 U.S.C. § 1125(c)(2)(B)(i-vi).

Here, the TTAB concluded that the POTIFY mark was strikingly similar to Opposer’s SPOTIFY mark in sight, sound and commercial impression, noting that the only difference in the two marks is the deletion of the letter “S.”  The marks are otherwise identical and even rhyme.  The inclusion of the design element did not change this conclusion as POTIFY was the dominant portion of the mark.  Further, consistent with its fame analysis, the TTAB quickly found that Opposer’s SPOTIFY mark was inherently distinctive, used by Opposer in a substantially exclusive manner, and that the SPOTIFY mark was widely recognized throughout the United States.  Spotify AB, 2022 USPQ2D 37 at *29–34.

In addressing evidence of Applicant’s intent in seeking to create an association between POTIFY and SPOTIFY, the TTAB considered Applicant’s claim of innocent adoption and rejected the same.  The owners of Applicants were both long-time users of the SPOTIFY platform well before selecting POTIFY as a mark.  In view of this long time use, the TTAB stated that it “defies logic and common sense” for the TTAB to conclude that longtime SPOTIFY users came up with the highly similar POTIFY name with no intent to create any association with SPOTIFY.  Regardless of Applicant’s intent, however, the TTAB noted that it would find dilution regardless of Applicant’s intent based upon the overall record.  Spotify AB, 2022 USPQ2D 37 at *34–35.

Finally, the TTAB found no evidence of actual association between Applicant’s POTIFY mark and Opposer’s SPOTIFY mark.  Recognizing that such an association was possible, the record did not support a finding that actual association had occurred.  Spotify AB, 2022 USPQ2D 37 at *35–36.

On balance, the TTAB considered the “exceedingly famous” nature of the SPOTIFY mark, the high level of recognition of the mark in the United States and the distinctive nature of SPOTIFY as sufficient to support a finding of dilution.  Indeed, the TTAB concluded that “although we need only find likely dilution” the TTAB believed “it inevitable that POTIFY ‘will diminish [SPOTIFY’s] distinctiveness.’”  Spotify AB, 2022 USPQ2D 37 at *37.

Takeaways

The opinion provides a useful overview of the different types of evidence relevant to a fame inquiry.  Here, the volume and variety of evidence presented by Spotify drove a conclusion that the SPOTIFY mark was not only “famous,” but “exceedingly famous.”