United States: Precedential No. 1: TTAB Sustains Spotify's Dilution-By-Blurring Claim Against POTIFY For Clothing And Marijuana-Related Software And Services

In a rare dilution ruling, the Board sustained this opposition to registration of the mark POTIFY, in standard character and word-plus-design form, for clothing and for software and services related to medical marijuana dispensaries, on the ground of likelihood of dilution by blurring of the famous, registered mark SPOTIFY for downloadable software and online services. The Board found the mark SPOTIFY to be "as famous as marks comes" and dilution not just likely but "inevitable."  Spotify AB v. U.S. Software, Inc., Oppositions No. 91243297 and 91248487 (TTAB 2022) [precedential] (Opinion by Judge Michael B. Adlin).

Opposer Spotify, a Swedish company known for its music-streaming services, alleged both dilution of its SPOTIFY mark both by blurring and by tarnishment, but the Board ruled only on the former ground. It also declined to reach Spotify's likelihood of confusion claim.

To prevail on its dilution claims, Spotify was required to show that: "(1) it owns a famous mark that is distinctive; (2) Applicant is 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., 101 USPQ2d at 1723-24)."

There was no dispute that the mark SPOTIFY is inherently distinctive. As to whether the mark is famous for dilution purposes, the Board considers the following factors under Section 43(c)(2)(a) of the Lanham Act:

• (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.

The Board found Spotify's advertising and publicity-related evidence to be "overwhelming." Its sales of goods and services were "quite significant" even prior to the applicant's first use date in January 2017. As to actual recognition, the Board concluded that "[i]t would be difficult to overstate the extent of public recognition of the SPOTIFY mark." The mark has been registered and the registration is "incontestable" [i.e., more than five years old and thus vulnerable to attack on limited grounds per Section 14 - ed.].

The Board therefore concluded that SPOTIFY "is exceedingly famous and entitled to protection against dilution under 15 U.S.C. Section 1125(c)."

Applicant U.S. Software primarily argued that the mark SPOTIFY was not famous prior to U.S. Software's first use date. The Board, however, saw no question that the mark was famous well before 2017, and has become even more famous since.

Turning to the question of whether the applicant's use of the POTIFY mark is likely to cause dilution by blurring, the Board considered the six factors set out in Section 43(c)(2)(B)(i-vi) of the Lanham Act.

• (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.

The Board found the marks POTIFY and SPOTIFY to be "striking similar" in appearance, sound, connotation, and commercial impression. The applicant's word-plus-design mark is dominated by the word SPOTIFY. Neither SPOTIFY nor POTIFY has any meaning. The marks are used for software products that "perform analogous functions:" finding music and finding marijuana dispensaries.  

The SPOTIFY mark is "nothing if not distinctive." It is a coined, fanciful term registered on the Principal Register without a Section 2(f) claim. SPOTIFY is "among the most highly recognized marks in the United States." 

There was no evidence that the opposer's use of the SPOTIFY mark was "anything other than exclusive." Moreover Opposer Spotify has been vigorous in enforcing the rights in its mark.

As previously discussed, "few marks are as widely recognized in the United States as SPOTIFY." That factor weighed heavily in favor of the finding of dilution by blurring.

U.S. Sofware claimed that its choice of the mark POTIFY had nothing to do with the opposer or the SPOTIFY mark, but the Board concluded otherwise. The founder and the COO of U.S. Software were both longtime SPOTIFY users prior to choosing the POTIFY mark.  

In any case, the Board observed that even if it accepted the applicant's claim of innocent adoption, that would not change the ultimate result here.

Finally, although there was no direct evidence of actual association of the POTIFY mark with SPOTIFY, the Board concluded that, in view of the close similarity of the marks, "Applicant's mark will cause consumers to 'confure up' Opposer's famous mark, and 'associate the two.'" N.Y. Yankees, 114 USPQ2d at 1507. However, in view of the lack of direct evidence of association, the Board deemed this factor neutral.

The Board therefore ruled that use of the POTIFY will impair the distinctiveness of the SPOTIFY mark.

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