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Trademark Infringement Litigation Heats Up in the Cannabis Industry

//Trademark Infringement Litigation Heats Up in the Cannabis Industry

Trademark Infringement Litigation Heats Up in the Cannabis Industry

By David R. Wunderlich, Esq.

Cannabis businesses must be careful when selecting product names and strain names. In recent months, non-cannabis businesses have pursued federal trademark litigation against cannabis businesses for branding of cannabis products similar to non-cannabis based products. Using or modifying the name or design of existing non-cannabis brands for your cannabis branding will get your business sued for trademark infringement.

This month, hot sauce manufacturer Tapatio Foods, LLC filed a complaint in federal district court in California for trademark infringement and other claims against the makers of a cannabis-infused hot sauce called Trapatio.

The Tapatio complaint alleges that the makers of Trapatio infringed trademarks using the name, design, and logo of the hot sauce in a manner likely to cause confusion about the products and tarnish the reputation of Tapatio’s brands. The complaint linked above contains images of the alleged infringing trademarks. The lawsuit seeks a permanent injunction against the use of Tapatio’s marks, as well as triple monetary damages, an order for corrective advertising to clear up the brand trademark confusion, disgorgement of profits, and attorney’s fees for the lawsuit.

The manufacturers of Trapatio sauce, before the lawsuit, sought trademark registration for Trapatio with the U.S. Patent and Trademark Office. Even this trademark filing won’t necessarily protect the use of the Trapatio trademark and logo: the Tapatio lawsuit seeks denial of that trademark registration.

In another recent case, the Gorilla Glue Company, an Ohio-based adhesive manufacturer, sued GG Strains LLC, a Nevada-based cannabis business, for GG Strains’ use of the trademarked name “Gorilla Glue” for cannabis strains.

Months later, the Gorilla Glue Company and GG Strains reached a settlement. Under the settlement, GG Strains must cease its use of the Gorilla Glue names, rebrand its products, and turn over its website URLS to Gorilla Glue Company. Furthermore, GG Strains must now enforce the terms of its settlement on affiliated companies, dispensaries, cultivators, and other partners. Other businesses that sold Gorilla Glue strains have started to remove them from inventory or discontinue selling them altogether.

As cannabis markets nationwide move from unregulated markets to legal, regulated markets, the business activities of cannabis companies will receive more scrutiny not only from state regulators, but also from other, non-cannabis businesses. The Tapatio and Gorilla Glue lawsuits follow similar precedent: in 2014, the Hershey Company threatened to sue Colorado-based TinctureBelle LLC for its production of a variety of products allegedly in violation of Hershey’s candy design and name trademarks, like Ganja Joy, Hashees, and Reefers and Hasheath. (****LINK http://www.denverpost.com/2014/10/16/colo-springs-edibles-firm-settles-suit-over-hershey-look-alike-candy/****). Like GG Strains, TinctureBelle elected to settle this lawsuit. The expense and administrative hassle of a lawsuits or settlements like these can be avoided by careful planning and analysis of proposed products and strain names.

McAllister Garfield, P.C. has assisted cannabis companies with obtaining state and federal trademarks, and with prosecution and defense of trademark infringement claims. If you have any questions about trademark issues for your cannabis brands, please contact us to set up an appointment.

 

By | 2017-10-26T17:35:22+00:00 26 Oct|Blog|Comments Off on Trademark Infringement Litigation Heats Up in the Cannabis Industry

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