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Judge declines to ban Republic investment site from offering music NFTs

By | Published on Thursday 7 July 2022

Republic Records

A New York judge has declined to issue an injunction banning investments site Republic from offering music investment opportunities, suggesting Universal Music’s wider trademark lawsuit against the company will also likely fail.

Universal took offence at the investment site’s move last year into the music NFT space – allowing investors and fans to buy into new tracks in return for a future royalty share – because it owns the label Republic Records. And, it reckoned, having another Republic branded company doing music NFT nonsense would be confusing, it having its own plans to jump on the NFT bandwagon.

It possibly didn’t help that the Republic investment site’s big move into music – via a partnership with music NFT start-up Opulous – was accompanied by some bullish copy that basically dissed traditional record labels like those operated by Universal.

It explained that, not only would investors get royalty rights and other perks linked to the tracks they supported, but they’d also allow more artists to secure investment without doing a traditional record deal and, in doing so, “fix [a record] industry that pays creators only 12% of the revenues they generate”.

So, while the Republic investment site might not have been launching a conventional record label, by its own admission, it was seeking to create an alternative to labels of that kind. With all that in mind, Universal argued that Republic was infringing on its Republic Records trademark in a way that would cause consumer confusion. Indeed, the major argued, it was already confusing people.

As well as suing the investment site for trademark infringement, Universal also sought an injunction stopping Republic from doing music stuff under its current brand. It was on the request for an injunction that the judge ruled this week, concluding that there were not sufficient grounds for such an order to be granted.

According to Billboard, judge Analisa Torres stated: “The fact that both parties’ products exist within the same industry is not enough. The products and services offered by the parties differ significantly”.

“It is conceivable that there may ultimately be some overlap between the parties’ consumers”, she conceded, “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”. However, she added, “such scenarios remain hypothetical”.

Universal’s wider lawsuit against Republic continues, although the decision regarding the injunction suggests that action is unlikely to succeed. As a result, some sort of settlement may well now be negotiated.

Although there is still a music category on the Republic site, displaying both current and past investment opportunities involving music projects, including a royalty right NFT product from Lil Pump, the investment platform previously removed some content that presented Republic Music as a distinct service.

It’s not clear if that content was removed because of the trademark dispute, nor whether it might return now that it looks like Universal’s trademark action might fail.