On May 3, 2021, WM Wrigley Jr. Company (“Wrigley”) filed a complaint against a host of cannabis companies and their respective owners (collectively “Defendants”) in the United States District Court for the Central District of California alleging trademark infringement, dilution, and unfair competition. Wrigley is the owner of many famous trademarks that are registered with the United States Patent and Trademark Office (“USPTO”), including SKITTLES, STARBURST, and LIFE SAVERS (collectively the “Marks”). Wrigley’s trademark infringement claim alleges that the Defendants are misappropriating Wrigley’s marks for use in marketing their edible cannabis candy products. It is also alleged that the Defendants’ cannabis products are a danger to children and adults who may unknowingly and unwillingly subject themselves to doses of Tetrahydrocannabinol (“THC”), the principal psychoactive component of cannabis, when they consume these products. In its prayer for relief, Wrigley is seeking damages in the amount of $2 million per counterfeit mark for each type of candy sold, all profits from the subject sales, and destruction of the infringing products.
What is the basis of the trademark infringement claim?
A trademark is a word, phrase, symbol, or design, or a combination thereof, that identifies and distinguishes the source of goods and/or services. If a competitor is offering similar goods and/or services through use of a brand name that is similar to a registered (or common law) mark, the competitor may be committing trademark infringement. However, in situations where another business is using a similar name, but is not offering goods and/or services that are similar to those of the mark owner, this may not amount to trademark infringement (e.g., Delta airplanes, Delta faucets, Delta dental insurance, etc.). Owners of “famous” marks have additional trademark rights by virtue of the fact that their marks have such an immediate connection in the minds of consumers such that the public expects a certain quality when identifying those marks. In order to achieve the legal standard of fame, courts have often looked at how much is spent on advertising and how long the goods and/or services have been in the marketplace.
Where trademarks are inherently distinctive and famous, owners may allege dilution on the grounds that use of similar marks would, by blurring or tarnishment, diminish the goodwill associated with the senior marks. Dilution by blurring refers to third parties (or junior users) that use marks similar to famous marks, in connection with dissimilar products. Dilution by tarnishment, on the other hand, occurs when the junior user’s mark negatively impacts the reputation of the famous mark in an unwholesome or distasteful manner. In the case at hand, Wrigley can claim that use of its Marks on cannabis products would: 1) result in confusion by blurring; and 2) tarnish its Marks where similar marks are used in an unwholesome, drug-related context.
Avoiding Trademark Infringement Claims
The case at hand is a clear example of trademark infringement, one that the Defendants must have known would result in Wrigley proceeding with a trademark infringement claim. In other less clear-cut situations, business owners have found themselves the subject of trademark infringement claims even when they had the best of intentions. Accordingly, prior to going to market with a brand, it is recommended that businesses consult with knowledgeable trademark lawyers so that they are apprised of potential legal issues.