The Trademark Trial and Appeal Board ruled that the applications for the marks "POTIFY" and "POTIFY & Design" would not be approved following the ingenious arguments given by the Spotify brand.
The first 2022 session held by the Trademark Trial and Appeal Board (TTAB) acknowledged that the SPOTIFY trademark is famous and distinct. The Board sided with the music-streaming company in this trademark dispute case. Spotify lawyers argue that the approval of the POTIFY mark will have a negative and diluting impact on the "SPOTIFY" trademark. They also added that the SPOTIFY mark became well-known years before POTIFY was established.
The mark "POTIFY" is linked with an American software company affiliated with the cannabis industry. The mark is used to describe the company's products, which are sold on an app designed to legal market marijuana.
A company's wish is to have a famous trademark that can be easily connected to their products (goods or services) in the minds of consumers.
Laws Regarding Trademarks in the United States
The United States Patent and Trademark Office (USPTO) is responsible for approving and registering marks and patents. The TTAB is a neutral agency under the USPTO that serves as a court for trademark and patent disputes. In the event of conflicts such as the Spotify vs. Potify case, the TTAB steps in to make an unbiased decision. The controversy began when US Software Inc. submitted an application to register its Potify mark.
The similarity between the two marks is obvious because save for the "S," both patterns are spelled the same way.
The TTAB determines which mark is undisputedly famous. In these trials, both parties must meet four non-exclusive requirements to prove that their brand is the most famous. These four criteria include:
- The volume and geographic reach of sales generated by the mark.
- The duration and geographic extent of publicizing the mark.
- Proof of registration on Principal Register.
- The reach and extent of the mark's recognition.
POTIFY vs. SPOTIFY
To efficiently make a decision, the board requested that both parties present evidence that their brand meets the above-listed requirements.
During this trial, Spotify established its alleged fame, garnered over the years since 2011. The Swedish company produced evidence that it promotes its music streaming services using the SPOTIFY mark.
During the consolidated opposition, Spotify also provided proof that it caters to a wide range of consumers across all age groups and throughout all states in the U.S. It also presented copies of previous advertisements placed in national publications like Vanity Fair, The New York Times, Billboard, and Rolling Stone. This was also amplified by the various visual and audio adverts released by major radio and TV stations over the years.
In early 2017, President Barack Obama was honored with an honorary job position titled "President of Playlists" after he famously announced that he'd love to work at the music-streaming company after he completed his tenure. The requirements for the job position featured credentials possessed only by Obama. This marketing strategy trended in the top two trends on Twitter and reached so many audiences on and off the platform.
Spotify also presented its social media records for consideration. On Facebook, the brand has over 23 million likes, 1 million YouTube subscribers, and almost 6 million followers on Instagram. This proved that the SPOTIFY mark has widespread recognition. The brand's teams presented statistical polls to show that a high percentage of the U.S. population knows about Spotify and the services it renders.
In addition to these, Spotify showed ownership of an undisputable registration on Principal Register, which was made about thirteen years ago. The records showed no claim of acquired distinctiveness.
On the other hand, the Potify team claimed that Spotify or Shopify did not influence the brand's name. It also noted the discrepancies in Spotify's objections, stating that there are at least three other brands ending in "otify". Based on the angle presented by Spotify's legal team, brands like Notify, Plotify, Votify, and Clotify should not be registered, but they all are.
The Final Decision
The TTAB ruled that the SPOTIFY mark was more famous, and as such, the Potify brand could dilute its fame if registered. Potiify's legal team claimed that there were criteria the board could have based their judgment on rather than "fame." Kevin Davis, the attorney in charge, added that the overly broad protection of the Spotify brand was clearly due to its fame.
Despite this unpopular opinion from the defending brand, it remains clear that Spotify clearly established how Potify could dilute and subsequently diminish the uniqueness of the SPOTIFY mark in the near future.
Spotify proved that it has the most distinctive and famous mark. The Potify brand began using its mark in 2015, about three years after the SPOTIFY mark became a household name in the U.S., and the approval of the applicant's mark would likely result in blurring or tarnishing the Spotify brand.
What this means for the cannabis industry
In the coming years, customers will be introduced to many cannabis brands, many of which will attempt to build their brand around an existing, well-established brand. However, as with many new brands that do this, this concluded trial between SPOTIFY and POTIFY shows that all will be resisted.
Entrepreneurs need to get familiar with the trademark laws. They also need to request the assistance of trademark counsels to prevent more trademark disputes.
Bottom Line
Trademark law is a highly delicate area that must be delved into with proper understanding. The TTAB concluded that the Potify mark was strikingly similar to the Spotify mark in sound, connotations, commercial impression, and appearance.
The Potify team made its first mistake when it failed to get trademark counsel before filing its trademark applications. Doing this would have saved the company countless hours and hundreds of thousands of dollars used to fight this trademark battle in the last five years.
Startup businesses need to run a simple trademark search and hire proper trademark counsel before registering trademarks with the USPTO. Brands need to understand that scaling through the USPTO examination phase does not automatically mean that the applications will be approved.
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