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Trademark Infringement and THC-Infused Candy

Post Time:2022-11-30 Source:ipbrief Author:Ali Ruvolis Views:

Recently, several lawsuits have been filed against cannabis companies for trademark infringement. With the increasing prevalence of trademark infringing THC-products on the market, there are growing calls for other forms of government action in addition to the litigation and agreements. Coachella Music Festival LLC (“Coachella”) sued Coachillin’ Holdings LLC (“Coachillin”) for using a common hashtag associated with the festival as well as infringing on Coachella’s trademarks. Wm. Wrigley Jr. Co . (“Wrigley”) has also taken action against alleged infringers. Wrigley entered into an agreement with the owner of OC 420 collection to stop them from mimicking the Skittles and Starburst logos. The agreement stipulated that OC 420 can no longer mimic the logos and also subjected them to monetary penalties.

Trademark holders claim that the alleged infringing THC-infused candies will lower brand appeal and cause financial harm. A suit filed in May 2022 alleges that a Florida-based company, Top Five Wholesale’s THC (“Top Five”) infringes on the popular marks of Ferrara Candy Co.’s (“Ferrara”) Nerds and Trolli candies. Top Five sells THC-infused edibles that allegedly copy the branding for the popular candies. Ferrara’s concern is that Top Five’s products will be confused for Nerds and Trolli candies, and that this uncertainty could cause “a health hazard to the consuming public, especially children.” Ferrara could also face potential harm to their brand due to their marks being used by an infringer selling THC-infused products. Ferrara is seeking a court order to block future sales of the alleged infringing products and $2 million in damages for each counterfeited trademark.

Companies alleging trademark infringement claim that the THC-infused candies threaten market trust by confusing the public. The maker of Sour Patch Kids, Mondelez Canada Inc. (“MCI”), has filed suit against a THC-edible maker selling a product branded “Stoney Patch.” In MCI’s complaint, the company alleges that the “Stoney Patch” branding is a “willful and intentional attempt to trade off of the goodwill and reputation of MCI.” MCI claims that consumer confusion and brand harm could damage the high quality and worldwide reputation of their products. Suing companies that make THC-infused products is difficult because the counterfeit companies generally do not have an established presence, so it can be hard to serve them. This poses issues for companies that wish to protect their trademarks as it can be difficult to bring alleged infringers to court.

While bringing trademark infringement suits to court helps to fight off copycats, some experts argue that this will not be enough to stop the copycat’s infiltration into the market. Stacy Papadopoulos, general counsel for the Consumer Brands Association, thinks that the current framework is not enough to mitigate the entirety of the problem. The nature of the companies selling these products, especially in jurisdictions where marijuana is not legalized, poses problems in holding copycats accountable. For example, it can be difficult to locate the infringing companies. In order to tackle the problem, Papadopoulos suggested legislative action. Additionally, twenty-three attorney generals have asked Congress to take action against THC products that copy the branding of popular snacks. While trademark litigation and agreements seem to be helping against the influx of copycat products, as the Wrigley win demonstrated, Congress and the courts may need to do more to stop the copycat products from infringing popular marks.

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