Watching the Pot™ (Jan. 2022)

As of the third quarter of 2021, Swedish music streaming company SPOTIFY boasted 381 million monthly active users worldwide – significantly more than the population of the entire United States. And in a recent win before the TTAB, SPOTIFY wielded this fame to successfully oppose registration of the mark POTIFY (and POTIFY and Design) for software, search and networking services, and merchandise, all related to medical marijuana dispensaries.

To succeed on a dilution (versus infringement) claim, the opposer must demonstrate that:

1. Applicant’s mark is similar to Opposer’s more senior mark;
2. Opposer owns a famous mark that is distinctive;
3. Applicant is using a mark in commerce that allegedly dilutes Opposer’s famous mark;
4. Applicant’s use of its mark began after Opposer’s became famous; and
5. Applicant’s use of its mark is likely to cause dilution by blurring or tarnishment.

To reach a conclusion on the dilution issue, the Board considered the degree of similarity of the marks (in that they differ by only one letter), the degree of consumer recognition of the SPOTIFY mark (the Board found SPOTIFY to be “exceedingly famous”), whether there is association between the marks SPOTIFY and POTIFY, and whether that association was intentional.

As for the Applicant, although its founder and CEO admitted that he became a SPOTIFY customer well prior to Applicant’s use of and applications for the POTIFY marks, he claimed that the mark SPOTIFY never crossed his mind when coining the mark POTIFY. Instead, he explained the mark POTIFY was coined to connote a commerce platform, like SHOPIFY® – another registered mark – for the “weed industry.”

The Board sustained the opposition, in light of the fame of SPOTIFY, and the degree of similarity between the marks. In particular, the Board observed that Applicant’s claim of “innocent adoption” of the term POTIFY would require a tremendous “leap in logic and common sense,” given the similarity of the functionality of the software products at issue.

There are three key takeaways from this opinion:

1. First, while “homage” and humorous marks are popular with the marijuana and cannabis industries, these brands are still subject to the same rules as mainstream trademarks – trademark counsel can help provide the appropriate clearance when taking niche marks to the national level.
2. Second, it is important to remember that applications for cannabis-related marks can only cover federally legal products and services – typical examples include ancillary merchandise such as clothing and accessories.
3. Third, once you have selected and committed to a brand, keep careful records of how you use the mark – including archiving versions of the website, media “tear sheets,” and social media posts; results of consumer recognition and engagement evidence; and advertising and PR expenditures – for use in demonstrating fame and recognition should you need to defend your brand down the road.

This article appeared in the January 2022 issue of MarkIt to Market®. To view our past issues, as well as other firm newsletters, please click here.