Curbing Cannabis Copycats: How to Protect Your Brand’s Reputation as Marijuana Companies Try to Make Their Mark

“The very nature of cannabis-derived products appears to be presenting an unexpected challenge for brand owners seeking injunctive relief—the products are used ‘for different purposes’ or sold through distinct channels of trade, making it harder for plaintiffs to prove that confusion is likely.”

cannabis - https://depositphotos.com/8694709/stock-photo-cannabis-background.htmlTo capture attention in the crowded new field of cannabis-related goods and services, many companies are using other companies’ brands to promote their goods and services, including puns in the edibles space. Stoney Patch THC gummies, for instance, features a name and logo similar to the popular Sour Patch Kids gummies. Cannaburst Gummies similarly plays on the famous Starburst candy brand. (See Complaint, Wm Wrigley Jr Co v. Conde d/b/a 2020Ediblez et al., No. 5:21-cv-00777 (C.D. Cal.); Complaint, Wm Wrigley Jr Co v. Packaging Papi LLC et al., No. 1:21-cv-02364 (N.D. Ill.).)  Others just copy a famous trademark, add cannabis leaves to the packaging, and claim the product is “medicated,” including Medicated Skittles and Life Savers Medicated Gummies.

Not surprisingly, brand owners are responding with lawsuits, alleging trademark infringement, dilution, and unfair competition among other claims. The focus of these lawsuits is generally quick injunctive relief to stop harm to the brand, rather than damages. This makes sense because of the uncertainty of collecting from companies who do not rely on the traditional finance services industry. But injunctive relief is not guaranteed without demonstrating the four preliminary injunction factors: (1) likelihood of success on the merits, (2) likelihood of irreparable harm in the absence of preliminary relief, (3) the balance of equities, and (4) the public interest. This article focuses on the first two of these factors.

Irreparable Harm

Some courts have found any association of a plaintiff’s trademark with cannabis to be sufficient to establish likely irreparable harm. For example, a court granted United Parcel Service’s (UPS’s) motion for preliminary injunction to stop United Pot Smokers from using a UPS420 logo nearly identical to UPS’s shield logo, but for marijuana shipping services. The court found “UPS would be likely to suffer irreparable injury, absent a preliminary injunction (in the form of prohibiting Defendants’ ongoing infringement and dilution of UPS’s famous UPS® Mark and UPS® Shield Logo through Defendants’ use of the UPS® Mark and a confusingly similar shield logo in connection with businesses selling and shipping marijuana contrary to federal law and the laws of several states).”  Preliminary Injunction Order at 1, United Parcel Service, Inc. v. Brendon Kennedy, No. CV 19-284-MWF (KKx) (C.D. Cal. Mar. 8, 2019), ECF No. 20. In a case filed by The Museum of Modern Art to stop the use of MOMACHA for an art cafe, the court issued a preliminary injunction after determining that confusion would tarnish the museum’s reputation and goodwill.  The court’s Order cited “the social media post of a MOMACHA beverage infused with cannabidiol (‘CBD’), a cannabis compound, and decorated with foam art in the shape of a marijuana leaf,” which the court surmised could cause confused social media users to “hope that the Museum now sells CBD-infused beverages.” Museum of Mod. Art v. MOMACHA IP LLC, 339 F. Supp. 3d 361, 382 (S.D.N.Y. 2018).

Similarly, in a recent trademark and rights of publicity case filed by actor Clint Eastwood against companies who falsely claimed he is selling a line of CBD-oil based wellness products, the court found irreparable harm and granted a temporary restraining order. It concluded, without any substantive discussion, that “[t]here is little question, therefore, that as long as [the advertisement] is publicly distributed there is significant potential for new and ongoing consumer confusion as to whether Mr. Eastwood is associated with or endorses the Defendants’ CBD products. Consumer confusion and loss of goodwill cannot be readily rectified through monetary damages, and therefore constitute irreparable harm.” Clint Eastwood v. Sera Labs, Inc., 2020 WL 5440564 (C.D. Cal. July 28, 2020).

Despite the plaintiffs’ successes in these cases, a defendant’s association with goods and services related to marijuana is not always sufficient to establish likely irreparable harm. For example, the Ninth Circuit vacated a preliminary injunction in Titaness Light Shop, LLC v. Sunlight Supply, Inc., 585 Fed. Appx. 390 (9th Cir. 2014). The plaintiff used Titan Controls for devices that control indoor gardening equipment. The defendant used Titaness for indoor grow lighting systems that were marketed to marijuana growers, noting that the plaintiff Sunlight “did not establish that Sunlight’s customers are aware of the website, would associate the products on the site with marijuana, or would stop purchasing Sunlight products if they mistakenly believed that Sunlight was marketing to marijuana growers.” In sum, even if known, an association between a plaintiff’s trademark and marijuana will not necessarily be viewed negatively by the plaintiff’s customers. Without such “evidence establishing a likelihood of irreparable harm, [the plaintiff] was not entitled to preliminary relief.”

In a recent case between a plaintiff pharmacy and defendant medical marijuana dispensary that both used “Doctor’s Orders” in their names, the court declined to find marijuana use and distribution to be “highly controversial” topics or an association between pharmacy services and marijuana to be “negative,” noting that 51% of Arkansas voters voted for the Arkansas Medical Marijuana Amendment in 2016. White Hall Pharmacy LLC v. Doctor’s Orders RX Inc., 2019 WL 3939357 (E.D. Ark. Aug. 20, 2019). Nevertheless, it granted a preliminary injunction because the plaintiff was able to rely on the rebuttable presumption of irreparable harm that was available in the Eighth Circuit. That option will now be available in other circuits due to the 2020 Trademark Modernization Act’s restoration of the rebuttable presumption of irreparable harm to the Lanham Act.

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Likelihood of Success

Of course, the restoration of the presumption will not lead to injunctive relief when a plaintiff cannot demonstrate a likelihood of success on the merits, which happens in more cases involving cannabis products than one might think—even when the marks are nearly identical. Three cases decided in 2019 illustrate such issues facing parties in trademark cases involving cannabis goods and services.

Lochirco Fruit and Produce Company, Inc. v. Tarukino Holdings, Inc. 2019 WL 157939 (W.D. Wash. Jan. 9, 2019), concerned plaintiffs who sold and distributed apples and apple products on the West Coast using the Happy Apple mark while the defendants used “the Happy Apple Mark to advertise, sell, and distribute a marijuana-laced apple beverage to recreational marijuana retailers in the State of Washington.”  Despite the fact that both entities used the Happy Apple mark, the court found that in light of Washington state regulations governing the sale of cannabis-containing beverages, “Defendants’ products and Plaintiffs’ products are not likely to be sold in close proximity to each other, and it is unlikely that a purchaser would mistakenly enter a retail store selling marijuana or marijuana-related products and confuse a cannabis-containing apple beverage with the fresh apples, apple cider, or caramel apples sold by Plaintiffs.”  Accordingly, the plaintiffs failed to show a likelihood of success on the merits. .

The court in Woodstock Ventures LC v. Woodstock Roots, LLC, 387 F.Supp.3d 306 (S.D.N.Y. 2019), likewise found no showing of likelihood of success on the merits despite both parties using WOODSTOCK as their marks for smoking articles, with the defendant offering recreational marijuana products, because the plaintiff had “expressly disavowed the notion that [its] products are intended for use with recreational marijuana.”  The court found the plaintiff’s disavowal of the recreational marijuana market to be a sufficient distinction between the parties’ products “even if [they] are marketed through the same or similar trade channels.”

Finally, the court in Kiva Health Brands LLC v. Kiva Brands Inc. found that neither party showed a likelihood of success on the merits on cross motions for preliminary injunction even though both parties used KIVA as a trademark. The court focused on the fact that “health supplements and cannabis-infused snacks, although both food items, are not complementary because they are used for ‘quite different’ purposes.” Kiva Health Brands LLC v. Kiva Brands Inc., 402 F.Supp.3d 877 (N.D. Cal. 2019). Thus, the court found “differences in the goods sold and (likely) the marketing channels used mean that there is not a significant likelihood of confusion.”

An Evolving Framework

Thus, these three 2019 cases illustrate that the very nature of cannabis-derived products that concerns so many brand owners appears to be presenting an unexpected challenge for brand owners seeking injunctive relief—the products are used “for different purposes” or sold through distinct channels of trade, making it harder for plaintiffs to prove that confusion is likely. If, however, plaintiffs are able to establish a likelihood of success on the merits, they will now be entitled to a presumption of irreparable harm. While defendants will attempt to rebut that presumption, including arguing that there is no inherently negative association with cannabis-based products or services, plaintiffs in such cases have strong case law to rely on to argue that such an association is harmful to their reputation and goodwill. Trademark practitioners and brand owners will be watching this case law develop as the underlying frameworks of both trademark law and cannabis regulation continue to shift.

Image Source: Deposit Photos
Author: yellow2j
Image ID: 8694709 

The Author

Jennifer Lee Taylor

Jennifer Lee Taylor is the chair of Morrison & Foerster's Trademark Group. She is engaged in a broad intellectual property practice, with an emphasis on litigation and counseling. Jennifer has litigated a variety of intellectual property cases, with a focus on trademark, design patent, and copyright infringement actions, as well as on unfair competition and false advertising actions. She has trial and appellate experience, and extensive experience litigating opposition and cancellation proceedings before the Trademark Trial and Appeal Board.

Jennifer Lee Taylor

Sabrina Larson is an associate in the Litigation Department of Morrison & Foerster’s San Francisco office. Her practice focuses on a broad range of complex litigation, with a focus on intellectual property litigation, commercial litigation, and consumer class actions. She has litigated patent and trademark infringement actions, complex commercial actions, and consumer class actions in federal courts as well as in proceedings before the Trademark Trial and Appeal Board. Sabrina’s practice also includes domestic and international trademark prosecution, copyright and trademark enforcement, and advising clients on trademark and copyright issues, from registration to enforcement and licensing.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author as of the time of publication and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

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