California Cannabis Trademark Lawsuit Highlights Industry Pitfall

A cigarette manufacturer has filed a trademark infringement lawsuit against a California cannabis company alleging the smaller firm swiped their long-standing brand. The case highlights the fact that trademark registration and branding are valuable assets for any cannabis company, but accusations of trademark infringement can damage your reputation as well as your pocketbooks.

Bloomberg Law reports that the owner of Kool menthol cigarette brand alleges in Los Angeles federal court that the logo used by the cannabis company Bloom Brands is far too similar to the interlocking “O” letters used by Kool. The marijuana business has reportedly applied for federal trademarks for the branding images that would cover its oral vaporizers and e-cigarettes. The company that owns Kool, however, sent the firm a cease-and-desist letter late last year.

Now, according to the lawsuit, the cannabis business is accused of trying to profit off the established branding of Kool in a “transparent rip-off.”

This claim is merely the latest in a long list of trademark disputes between those in the fledgling marijuana industry and larger, more established companies. Among others that have cropped up in recent years:

• Manufacturers of Nerds candy filed a lawsuit last year against the California-based producer of cannabis edibles alleging trademark infringement.
• Chocolate maker The Hershey Co. has filed numerous trademark infringement complaints against cannabis companies over the last several years.
• Ohio-based glue manufacturer, the Gorilla Glue Company, filed a lawsuit against a Nevada cannabis company, GG Strains, for its use of the trademarked name “Gorilla Glue” for one of its strains of cannabis. The two companies reached a settlement resulting in the cannabis company halting its use of all Gorilla Glue names, rebranding of its products and relinquishing its website URLs to the gluemaker.
• Hot sauce maker Tapatio Foods, LLC filed a federal trademark infringement lawsuit against a California company producing cannabis-infused hot sauce called Trapatio.

The crux of many of these lawsuits is that defendant companies are infringing on the plaintiff’s trademarks by using names, logos, designs, etc. in a way that is likely to cause consumer confusion about the products and potentially damage the reputation of the plaintiff, depriving them of profit.

Companies found to have infringed trademarks may be permanently banned from using those same marks or names, compelled to pay triple monetary damages, cover the cost of corrective advertising to clear the brand confusion, forfeit their profits and pay plaintiff’s attorney’s fees.

The hassle and expense of this type of litigation can usually be avoided with meticulous planning and research of proposed strain names and products. Our Los Angeles marijuana lawyers can help clients formulate strong business plans and review potential product lines for possible trademark issues.

As bigger brands break into the cannabis business, Bloomberg Law predicts such trademark infringement lawsuits are likely to become more common. Many companies want to capitalize on products with cutesy, catchy names and pop-culture references. But that can be lead to legal woes if the more mainstream company catches wind.

A common type of trademark infringement is dilution by tarnishment. This means that the company’s reputation can be harmed by the mark’s association with another company. Typically, there is a high bar to prevail with these kinds of claims because you usually have to prove the company infringing on the mark is somehow associated with something that is obscene, sexually explicit, drug-related or illegal. With cases involving marijuana companies, clearing that proof burden is less difficult.

It should be noted that unless and until marijuana becomes legal at the federal level, trademark protection is not available through the U.S. Patent and Trademark Office. There are still other ways cannabis companies can protect their brands, though, and our Los Angeles marijuana business lawyers are available to help.

The Los Angeles CANNABIS LAW Group represents growers, dispensaries, ancillary companies, patients, doctors and those facing marijuana charges. Call us at 949-375-4734.

Additional Resources:

How Cannabis Companies Can Protect Their Trademarks, Oct. 29, 2020, Bloomberg Law