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Thursday, December 7, 2023
Dec. 7, 2023

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Seattle psychic startup hit with copyright lawsuit it never saw coming


There’s some irony in the fact that the founders of a Seattle fortunetelling startup were entirely unaware of their own looming legal misfortunes.

Until they were sued for copyright infringement in June, the biggest issue for Tom Cote and Courtland Kellum was whether their 2 1/2-year-old company, Soulmate Medium, could handle all those seeking solace from Soulmate’s 100-plus tarot readers and spiritual guides.

But as Cote, 31, and Kellum, 34, have learned since, they weren’t the only ones trying to break into a psychic advice industry that has boomed since the pandemic.

On June 30, Soulmate was sued in a Seattle federal court by Enlightened Today, an even younger psychic startup out of St. Petersburg, Fla.

Enlightened accuses Soulmate of illegally copying marketing materials “nearly verbatim” and, according to Cote, seeks damages of “hundreds of thousands to millions of dollars.”

Adding injury to insult, Enlightened also got Soulmate’s website temporarily shut down, which “essentially wiped out our revenue for the month of July,” Cote said Wednesday.

Soulmate got its site back up July 28, but by then the company had cut half its staff and is now struggling to restore lost business, Cote says.

Soulmate denies the allegations, which Cote dismisses as an “illegal shakedown” by a competitor intended to render Soulmate unable “to invest in the things we need to do to compete.” Last week, Soulmate’s attorney asked the court to dismiss the case.

A different view comes from Enlightened, which was started September 2021 and provides “tarot card readings, relationship coaching, and astrology consultancy” via a website called Spiritual Society.

Enlightened “has invested substantial resources to develop its intellectual property and to provide a valuable consumer experience,” Enlightened attorney Damon Wright said Thursday. “Our client brought the lawsuit to protect its intellectual property and to help consumers.”

The dispute comes amid surging demand for spiritual advice, which industry insiders attribute partly to pandemic stress.

“Every time there is something big happening across the world … people want to go back to intuition and connect to something bigger than them,” Rana George, a celebrity Lenormand card reader, told Forbes in 2021, adding that “all the metaphysical stores are booming.”

Google searches for the astrological term “birth chart” hit a record high in June 2021, according to Google Trends.

Technology has also been key. New software has let astrologers generate and personalize predictions more quickly, while hundreds of app-based services make that information more accessible to clients, according to Allied Market Research. A search for “astrology” turns up more than 140 apps on the Apple App Store.

That’s translating into big money. The global astrology market generated $12.8 billion in revenues in 2021, up from $2.2 billion just three years before, according to studies cited by The Washington Post. It’s expected to reach nearly $23 billion by 2031.

That was the market Cote, an ex-Microsoftie-turned-internet consultant, and Kellum, a marketing veteran, hoped to tap when they launched Soulmate in February 2021.

Cote says they saw an opportunity in a crowded market for an “ethical” astrology platform with an appealing user experience and a positive outlook.

Many astrology providers are “fear forward,” with users hearing that “‘if you don’t do this, you’re not going to find somebody or you’re not going to be successful,’” says Cote, who works from his home in Kirkland.

By contrast, Soulmate stresses “positivity,” with the goal that customers are “feeling good when they walk away, not fearful,” Cote says.

And where some established providers marketed their advice mainly to older women, Cote says, Soulmate has seen a roughly even gender split, and a lot of younger users. “Some of our best customers have been younger men, actually,” Cote says.

Soulmate initially offered a basic digital tarot reading service, marketed on social media. Users requesting advice, typically about romance, get an emailed response from a stable of readers and other advisers that eventually grew to around 100, and who worked with Soulmate under an arrangement similar to Uber and its drivers, Cote says.

Last summer, Cote says, Soulmate launched its own app, Mystica Psychic Readings (six ratings, 4.3 stars on the App Store) that lets users connect with tarot advisers in real time. Advisers set their own fees, which range from 99 cents to around $5 a minute, and Soulmate takes a cut, Cote says.

That’s on the bargain end of the market. On the popular site Kasamba, providers were charging anywhere from $1.50 to $20 a minute Friday.

Soulmate’s positivity and pricing were effective, Cote says. At its peak, Soulmate was hosting 200 or so user conversations daily and making enough to pay a staff of around 30.

But Soulmate’s dark night started in early 2023 when it lost its programmer just as it was trying to improve its app, Cote says. Efforts to hire a replacement went nowhere, in part because the tiny startup couldn’t compete with larger, venture-backed firms, Cote says.

Then, in June, Soulmate had a new problem: a lawsuit and the prospect of a costly legal battle.

Philip Mann, Soulmate’s Bainbridge Island attorney, thinks the case should be tossed in part because the plaintiff hasn’t provided any examples of the allegedly stolen copyrighted material.

Enlightened contends that it has developed scripts and other copyrighted content “specifically phrased to entice the interests of potential customers,” and that Soulmate has illegally copied those works “and repurposed them for their own uses to unlawfully compete with [Enlightened] and convince potential consumers to engage with [Soulmate] and purchase [Soulmate’s] services rather than” Enlightened.

A main piece of evidence in the suit is a screenshot of a single Facebook user who appears to find similarities between scripted content used by Soulmate and scripted content used by Enlightened.

More specific evidence of infringement is forthcoming through the discovery process, said Wright, Enlightened’s attorney.

“We’ve analyzed the Soulmate Medium scripts, compared them to our scripts, confirmed that we were using our scripts before they were using their scripts and confirmed that the scripts are substantially similar,” Wright said.

Whether a jury will get to judge that for itself isn’t certain.

Defending a copyright suit can cost upward of $300,000, which is generally out of the question for smaller firms, Mann says.

Instead, Mann says, many defendants, especially smaller ones, agree to pay an amount that is well below the cost of a legal battle, but sufficient “to make the plaintiff go away.”

Cote, meanwhile, admits he’s more than a little fearful of what the future may bring and, when asked, conceded he was tempted to ask for a prediction from his own spiritual team.

“A little bit, yeah,” he said. “I mean, certainly, there’s something reassuring to hearing somebody tell you everything’s going to work out.”

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