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First Amendment May Help Cannabis Companies Beat Trademark Infringement Claims

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Editor’s note: A version of this article by Fred Rocafort was first published in Law 360.

The US Constitution’s Freedom of Expression Protections, found in the First Amendment, may offer legal recourse to cannabis brands in trouble for using similar brands to popular brands.

To be clear, the free speech argument will not help those who simply copy a well-known brand, and make no effort to differentiate their brand from the famous one.

However, in the case of trademarks that simply raise famous ones, the First Amendment can help prevent claims of infringement.

Famous brands are an uncommon source of inspiration for brand creators. Sometimes brands take that inspiration too far, effectively capturing a popular brand.

For example, Candymaker Ferrara Candy Co., Ltd. lawsuit A company called Akimov LLC filed in US District Court for the Southern District of Florida in May, alleging it was selling THC-containing products bearing some of Ferrara’s registered trademarks, including those for Nerds and Trolli candy.

Assuming the claims are true, Akimov was not using Ferrara-inspired marks, but rather used Ferrara trademarks without permission.

The damage to Ferrara and the public by having Nerds and Trolli products not made by Ferrara on the market should be self-evident. Consumers can be misled into purchasing Nerds and Trolli products of unclear origin and may be of lower quality than the original products made by Ferrara.

This is without taking into account the risks posed by the alleged presence of cannabis in Akimov products. For Ferrara, its reputation may suffer if there are any problems with Akimov products, as problems can be associated with Ferrara brands, even if they are not actually produced by Ferrara.

Furthermore, selling unauthorized Nerds and Trolli products to misleading consumers, who actually want the original product, could represent a loss of revenue for Ferrara.

In other cases, inspiration from a popular brand may be obvious, but the potential for harm is minimal or nonexistent. For example, Wm last year. Wrigley Jr. lawsuit A company, Terphogz LLC, that sells Zkittlez products in the US District Court for the Northern District of Illinois, alleging infringement of Wrigley’s Skittles trademarks.

It’s hard to argue that the Zkittlez name isn’t a play on Skittles, but whether the use of Zkittlez’s trademarks infringes on Wrigley’s Skittles trademarks is another matter.

In fact, the US Patent and Trademark Office has allowed the registration of two marks that include the word “zekittles“Not finding the potential for confusion between these signs and those of Skittles.

In cases where their mark does not match the popular brand, brand creators can say that there is no potential for confusion. At the same time, the Constitution and its protection of free speech may constitute another share in the quiver of trademarks that seek inspiration from famous brands, and find themselves as defendants in a trademark litigation.

In the relevant part, the First Amendment The constitution states that “Congress shall not pass any law … restricting freedom of expression.” There is tension between the First Amendment mandate against eroding free speech, on the one hand, and federal trademark rights equipped for Under laws established by Congress, on the other hand.

In particular, Lanham Act prohibits the registration of a trademark that closely resembles a registered mark or a mark previously used by another person that “is likely, when used on or in connection with Application Goods, to cause confusion, error or deception.”

Strictly speaking, the trademark owners’ freedom of expression is restricted by this ban, as it means that they cannot use certain words, phrases and logos in connection with their products.

Recognizing this tension between trademark rights and freedom of expression, courts are seeking to strike a balance. in Ianco vs Brontethe US Supreme Court ruled in 2019 that a provision in the Lanham Act prohibiting the registration of unethical or obscene trademarks violated the First Amendment.

Previously, in Matal vs TamIn 2017, the Supreme Court reached a similar conclusion regarding the ban on defamation of trademarks.

By contrast, courts have generally held that a reduction of First Amendment protection is acceptable when protection is denied for a trademark likely to be confused with a mark previously used in commerce.

In the 1987 San Francisco Arts and Athletics case against a US Olympic Committee decision, the Supreme Court a favour The suppression of certain words in favor of trademark protection can have the unfortunate effect of suppressing the expression of ideas.

At the same time, the Court held that this risk must be weighed against the importance of protecting the added value of the words through the efforts of the parties using these words as trademarks.

This account changes where artistic expression is involved. in Rogers vs Grimaldi, the U.S. Court of Appeals for the Second Circuit in 1989 adopted a test that, if free speech interests are involved, a plaintiff alleging trademark infringement will prevail in only two circumstances. One where the offending trademark “has no technical relevance” as it was used. The other is where the infringing trademark is explicitly misleading as to the source or content.

It might seem like an exaggeration to look at frivolous names like Zkittlez as artistic expressions. However, in 2020, the U.S. Court of Appeals for the Ninth Circuit had no problem determining that toy dog ​​was an artistic expression in VIP Products LLC v. Jack Daniel’s Properties Inc. The “Bad Spaniels Silly Squeaker” looks like a bottle of Jack Daniel’s whiskey, and bears the words “Old No. 2, on your Tennessee Carpet” instead of “Old No. 7 Brand Tennessee Sour Mash Whiskey,” as on the actual bottles.

In its logic, the Ninth Circle made it clear that Expressive work does not have to be the type of work to be displayed in an exhibition. Instead, the key is whether the use of the famous mark serves to express a point of view or not deliver an idea. From the point of view of the Ninth Circle, the use of elements associated with a Jack Daniel’s brand image on a toy dog ​​conveys a humorous message entitled Protecting Free Speech.

The logic of the ninth circle above can be applied to some of the brands used by some cannabis brands that mimic, or are inspired by, the more well-known brands. While not everyone will find brands like Zkittlez amusing, it is reasonable to speculate that at least some people will.

Certainly all the cannabis brands that are being challenged by the owners of famous brands will not cross the threshold of artistic expression, but it can be argued that some do. This in turn means that, under Rogers’ test, the use of these cannabis brands would only infringe on more well-established brands under very limited circumstances.

When applying the Rogers test to Zkittlez tags, its use has technical relevance – no joke otherwise. At the same time, it is difficult to argue that these images are downright misleading as to the source or content of the work.

The letter substitutions that distinguish Zkittlez brands from Skittles brands are important. As such, they send an immediate signal to consumers, that these brands do not identify Skittles candy that is well known to the public. If anything, it can be said that the Zkittlez brands are trying to keep consumers away from confusion.

Compare this to the facts in A lawsuit It was filed earlier this year in US District Court for the Southern District of New York by Hermes v. Mason Rothschild, the creator of the non-fungible code group called MetaBirkins.

Hermes has registered the BIRKIN brand for handbags. As Hermes claims in the lawsuit, with so many well-established brands entering the metaverse, consumers would expect NFTs with well-known brands to actually belong to the owners of said brands.

On the other hand, this argument would be very difficult to make if the name chosen for the group was MetaVirkins, for example.

While decisions like the one in Bad Spaniels provide legal inspiration for some hot water cannabis brands infringing, it is crucial to keep in mind that hemp products are not chew toys. Courts may look at free speech cases differently in cases where allegedly infringing trademarks are used on federally illegal products, such as marijuana, as defined in Controlled Substances Actor CBD products that are in violation of interstate commerce Federal Food, Drug, and Cosmetic Act.

Owners of famous trademarks can argue that parody marks or other similar marks should not have trademark protection if they are used on illegal products. The counter-argument is that the word, phrase, or logo on hand is a First Amendment protected expression first, then a trademark second.

However, for our purposes, it suffices to highlight this potential openness of a court looking for legal discrimination on the basis of which a decision can be made in favor of the owner of the famous trademark.

It should also be noted that VIP products only apply to the 9th circle; Other departments may take different approaches.

Finally, it is worth emphasizing that the First Amendment will not save those cannabis brands that cannot register their trademarks with the USPTO because they are used in connection with illegal products. For a brand facing trademark infringement or a mitigation measure, though, the Constitution may offer redemption.


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