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UMG Can’t Quash ‘Republic’ Music Investment Platform, Judge Says

Universal said consumers would think the company was affiliated with Republic Records, but a federal judge said the evidence was "extremely minimal."

A Manhattan federal judge is refusing to grant Universal Music Group an injunction shutting down a music investment service called “Republic,” ruling that consumers aren’t likely to confuse the platform with UMG’s Republic Records.

In a decision on Tuesday, Judge Analisa Torres said a crowdfunding company called OpenDeal didn’t appear to have violated UMG’s trademark rights by using the “Republic” name on a new service that allows users to buy small portions of music royalty streams.

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Filed in November, UMG’s lawsuit claimed the use of “Republic” on music investments was so confusing that even industry insiders would think the service was affiliated with Republic Records. But Judge Torres said the actual evidence for those claims was “extremely minimal.”

“The fact that both parties’ products exist within the same industry is not enough,” the judge wrote. “The products and services offered by the parties differ significantly.”

Tuesday’s ruling – on UMG’s request for a so-called preliminary injunction that would have forced OpenDeal to change its name while the case was litigated – is not a final decision on the case. But it strongly indicates that UMG is unlikely to win, and trademark cases often settle after such early skirmishes.

A spokesman for UMG did not immediately return a request for comment on Wednesday.

Launched in 2016, OpenDeal’s Republic lets users buy into startups, cryptocurrency projects and other investments across a wide range of sectors. In October, the company announced it would start allowing users to invest in music royalties by purchasing NFTs (non-fungible tokens), calling itself the first to “bring music investing to the masses.”

That quickly sparked the lawsuit from UMG, which acquired Republic Records in 2000 and now operates it as one of its top imprints, home to Taylor Swift, Ariana Grande, Drake, Post Malone and many others. Seeking an immediate injunction, the music giant called the OpenDeal’s new service a “wanton effort to usurp plaintiff’s Republic name and trademarks for itself.”

“The artists, labels, managers, agents, and fans who currently know of plaintiff’s Republic label would be presented with two different companies offering identical services under identical names in the same industry,” attorneys for the music giant wrote in the lawsuit. “Confusion is inevitable.”

But in Tuesday’s decision, Judge Torres begged to differ. Among other things, she said that the full “Republic Records” was notably different from the platform’s shorter “Republic,” and that the two companies were aimed at different sets of consumers – even if they both pertained to music.

“It is conceivable that there may ultimately be some overlap between the parties’ consumers—for instance, fans of a popular artist may both purchase that artist’s music through Republic Records, and make crowdfunded investments in recordings by that artist through the Republic Platform,” the judge wrote. “But, such scenarios remain hypothetical.”

In a statement following the ruling, an attorney for OpenDeal said the ruling “comprehensively addresses the issues raised in the litigation and decisively confirmed Republic’s rights.”