Universal Music Group, the owner of Republic Records, has reached a settlement to resolve a trademark lawsuit the music giant filed against a music investment platform called Republic.
The deal will end a case in which UMG accused the smaller company of confusing consumers by expanding into music royalties investing – a move UMG warned could dupe people into thinking Republic Records was involved in the project. But a judge later ruled that the case would be difficult to win.
In an order last week (Dec. 13), the federal judge overseeing the lawsuit said that all claims had been “settled in principle” and ordered the case dismissed. Terms of the agreement were not disclosed, and neither side immediately returned requests for more details.
Launched in 2016, OpenDeal Inc.’s Republic platform lets users buy into startups, cryptocurrency projects and other investments across a wide range of sectors. In October 2021, 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. In a November 2021 complaint seeking an immediate injunction, UMG called 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,” UMG’s lawyers wrote at the time. “Confusion is inevitable.”
But in July 2022, Judge Analisa Torres ruled that that UMG was unlikely to be able to prove such allegations in court. She said the evidence of potential confusion was “extremely minimal,” since the services and consumers of the two companies “differ significantly” — and that a shared connection to the music industry was “not enough.”
“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.”
That ruling – denying UMG’s request for a so-called preliminary injunction that would have forced OpenDeal to change its name while the case was litigated – was not a final decision on the case. But it indicated that UMG was unlikely to win, and such trademark cases often settle after such early skirmishes.
After that decision, UMG later filed an updated version of its allegations, and the case proceeded into discovery – the process of exchanging evidence in a civil lawsuit. But the lawsuit has largely been paused for more than a year as the two sides engaged in settlement talks that ultimately resulted in last week’s agreement.
