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New Trademark Litigation In opposition to “Stoney Patch” Hashish Merchandise Calls Out an Trade Development of Copycats

We’ve adopted and written extensively about trademark litigation within the hashish area for the final a number of years, which you’ll be able to examine right here:

The newest case on this string of hashish trademark litigation was filed within the Central District of California on July 19, 2019 by Mondelez Canada Inc. (“MCI”), the proprietor of the Bitter Patch model of sweet, in opposition to Stoney Patch, maker of cannabis-infused candies in California. Within the opening sentence of its criticism, Mondelez notes:

There was a rising pattern amongst makers of hashish merchandise, together with edible merchandise infused with tetrahydrocannabinol (“THC”), to market their merchandise by copying and misappropriating the colours, flavors, names and packaging of fashionable snacks and candies.”

As evidenced by the checklist of comparable instances above that we have now written about, we are able to’t say that we disagree with this assertion, though we’ve seen these sorts of product imitations for the reason that early days of medical marijuana as effectively. The one distinction is that with the rising legitimacy of regulated hashish, large firms like MCI are beginning to concentrate to what’s taking place available in the market.

One novel element of the Stoney Patch case is that MCI alleges that Stoney Patch is definitely in violation of California state legislation by promoting candies that seem like the SOUR PATCH model of gummy candies as a result of these candies are marketed to be interesting to youngsters, one thing that’s prohibited underneath the Medicinal and Grownup Use Regulation and Security Act (“MAUCRSA”):

In full disregard of California’s legislation, of considerations for public security, and of MCI’s rights, Defendants deliberately have designed their THC gummy merchandise to repeat MCI’s long-established SOUR PATCH model of gummy candies. Defendants have adopted the confusingly related model title STONEY PATCH, have copied the look of MCI’s precise product, and have copied the look of the packaging that has lengthy been related to MCI’s SOUR PATCH candies. Such actions have the impact of constructing the THC gummy merchandise offered by Defendants extra interesting to youngsters and more likely to be mistakenly consumed by youngsters. Additional, such actions are antithetical to the enterprise and popularity of Plaintiff.”

Apparently, it’s unclear whether or not Stoney Patch merchandise are literally manufactured by a licensed California hashish firm. Apparently, MCI has had a tricky time monitoring down the entity that manufactures the Stoney Patch merchandise, noting that the packaging of the merchandise doesn’t designate a maker, nor do they appear to have a web site past their Instagram web page. By not designating a licensed producer on the packaging, the maker of the Stoney Patch merchandise are in violation of California hashish manufacturing rules.

MCI seeks to forestall Stoney Patch from unfairly buying and selling on the goodwill of the SOUR PATCH model and from tarnishing MCI’s mental property rights, and seeks damages and injunctive aid for willful trademark infringement, dilution, and unfair competitors underneath the Lanham Act in addition to California state legislation. The Grievance cites that Bitter Patch Children have come “in a definite bag that has a yellow heart with inexperienced dabs on the edges that permit the yellow to peak (sic) via … [with] the phrases SOUR, PATCH, and KIDS stacked one atop the opposite within the colours inexperienced, orange, and purple, respectively … [and] the slogan “Bitter then Candy” … within the prime left.” The packaging additional reveals the looks of the particular gummy children across the outdoors of the packaging. Stoney Patch’s packaging is “nearly equivalent,” Mondelez alleged. It follows the identical colour scheme, has the phrases STONEY and PATCH stacked atop the opposite in inexperienced and orange, and the slogan “Bitter & Candy then Stoned” within the prime left. As an alternative of gummy children across the outdoors of the packaging, there are marijuana leaves. The product itself can be equivalent, besides that the humanoid gummies have one eye as a substitute of two. Primarily based on the proof within the criticism, we predict MCI’s claims are sturdy. The pictures of the allegedly infringing packaging make this beautiful clear:

 

 

 

 

 

 

 

 

 

That is most likely time for a reminder that parody shouldn’t be a protection to trademark infringement in this kind of industrial context. There’s a line between utilizing one other’s mark to make political or social commentary and utilizing one other’s mark to realize recognition and enhance gross sales of your individual product. We’ve written earlier than about hashish firms which have tried to spoof well-known marks and have paid a value for it. Hershey’s, for instance, initiated a number of lawsuits in opposition to firms that branded cannabis-infused chocolate merchandise with names resembling “Mr. Dankbar,” “Reefer’s Peanut Butter Cups,” “Hasheath,” and “Ganja Pleasure,” all meant to mimic their non-cannabis Hershey’s counterpart. These instances finally settled out of court docket.

 

 

The issue with all these “parodies” is two-fold. The primary concern is over chance of confusion, and the second pertains to dilution or tarnishment. If there’s enough similarity between the parody and the unique mark, the court docket will discover infringement primarily based on a chance of confusion. Which means the marks are related sufficient to trigger shopper confusion as to the supply of the product (and confusion amongst youngsters as to which product is sweet and which is hashish), and large manufacturers clearly don’t need different firms piggybacking off the success of their emblems.

The second challenge, dilution or tarnishment, is usually a reasonably weak technique of attacking a trademark parody. Nevertheless, due to the federally unlawful standing of marijuana, arguing cannabis-infused model of a well-liked product “tarnishes” a well-known model shouldn’t be a stretch. MCI, which markets its merchandise to youngsters, doesn’t need customers pondering of “Stoney Patch” each time they purchase SOUR PATCH merchandise.

A First Modification argument for parody is at all times simpler to make in a non-commercial context, the place a parody of a mark shouldn’t be utilized in reference to any items or providers. This makes for a stronger argument that the parody is just meant to precise an concept, and to not generate revenue primarily based on model recognition. Second, the diploma of similarity between a “parody” and the unique mark makes an enormous distinction. The extra related the marks, the extra possible it’s that the court docket will discover infringement primarily based on chance of confusion. Third, tarnishment is a a lot larger challenge within the context of marijuana branding than in most different industries, and could also be a means for established firms to assault infringing marks. And at last, even should you assume you have got a powerful argument for defending your mark on the premise of parody or First Modification grounds, the price of litigating with companies like MCI or Hershey’s may very effectively put you out of enterprise, even on the off probability that you just prevail.

Having already defended a few of these instances, we are able to inform you it’s simply not definitely worth the danger. Take this as one other light reminder to avoid utilizing different firms’ branding, even should you assume you might be doing in order some kind of parody.

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