In 2019, if you want a quick, easy way to send or receive money without paying a fee, you are likely using the app Venmo. It has become so popular that people will often ask to be Venmo’d money. As can be the case, a noun becomes a verb based on heightened usage.
The problem that Venmo’s parent company PayPal is now having is that others seem to want to palm off the strength of the Venmo name. Take for instance Lenmo Inc. It describes itself as a peer-to-peer lending app that connects people looking to borrow money with investors looking to make money. The concept is fine, but the choice of branding is now being challenged.
On July 3, PayPal filed a federal lawsuit against Lenmo Inc. for trademark infringement, trademark dilution and false designation of origin. It claims that Lenmo has intentionally and unlawfully attempted to trade on the goodwill that Venmo has created with consumers.
It is not as if Lenmo Inc. truly tried to differentiate its mark from that of Venmo. It literally only changed a single letter in its mark. Further, there is no real apparent reason to use “enmo” for a lending/financing app other than it sounds similar to that of Venmo.
PayPal already owns six federal trademark registrations surrounding its “VENMO” trademark. It claims, and I believe has a strong case, that Lenmo is likely to cause confusion that Venmo is the source or sponsor of Lenmo’s products or services or that there is some association between Venmo and Lenmo.
This case demonstrates the importance of a brand seeking legal guidance before putting a mark into the wild. The cost for Lenmo to now defend against the lawsuit and potentially rebrand and pay monetary damages may be tremendous. The associated publicity with being sued certainly cannot be worth the consequences, including the possibility that the company will need to cease using the Lenmo mark altogether in the future.
And it is not as if Lenmo did not know about the association issues with Venmo. It previously publicized others calling it the “Venmo for Lenders” and was aware of PayPal’s disdain for its use of the allegedly infringing mark. PayPal previously sent demand letters, but Lenmo Inc. refused to comply with changing its name.