Two prominent cannabis companies have been in the news lately for having been sued for trademark infringement by well-known brands. Earlier this year, the Gorilla Glue Company filed a trademark infringement case against GG Strains LLC, a Nevada-based cannabis company. The case, in which Gorilla Glue Company, a prominent manufacturer of a variety of adhesives sold under the “Gorilla” brand and distinctive logo, alleged trademark infringement, dilution, unfair competition and cybersquatting, recently settled. Gorilla Glue alleged that by marketing its strains under “confusingly similar” names, GG Strains was trading off the goodwill and reputation established by Gorilla Glue over the course of 23 years.
Shortly after the Gorilla Glue case settled, news broke that Tapatío Foods LLC, the famous American hot sauce brand, had filed two separate complaints against TCG Industries, LLC (d/b/a Payaso Grow), alleging federal trademark infringement, federal and state unfair competition, and dilution. TCG has a cannabis-infused hot sauce called “Trapatío” that bears an image of a “man in [a] sombrero, yellow shirt, and red tie” that is (according to Tapatío) “confusingly similar” to Tapatío’s trademarked images.
These two cases illustrate the importance of choosing a brand that doesn’t infringe an existing trademark registration. Most business owners know that they cannot flagrantly copy another brand, word for word. But the standard for trademark infringement is actually significantly lower. Not only can you not use a mark that is the same as a registered trademark, you cannot use a mark that is confusingly similar to a registered trademark.
Understanding the standard for assessing “likelihood of confusion” can be helpful for knowing which marks to avoid when developing your brand. The United States Court of Appeals for the Ninth Circuit (which sets the law on this for Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon and Washington) in AMF Inc. v. Sleekcraft Boats, developed an eight-factor test for determining whether one mark is confusingly similar to another. Here are those eight factors:
- Strength of the mark;
- Proximity of the goods;
- Similarity of the marks;
- Evidence of actual confusion;
- Marketing channels used;
- Type of goods and the degree of care likely to be exercised by the purchaser;
- Defendant’s intent in selecting the mark; and
- Likelihood of expansion of the product lines.
Some of these factors are clear-cut, and some are highly subjective. The Ninth Circuit has repeatedly reaffirmed that this is a flexible test, but it is useful to consider these factors when choosing a name for your brand that may be similar to another registered mark. For example, if the other, similar mark is a well-known brand, or a household name, your risk of infringement goes up. If the goods you are selling are similar to the goods provided by the other brand, your risk goes up. Likewise, if the marks are very similar, if similar marketing channels are used, or if either company intends to expand into the market of the other, your risk of infringement goes up. You’ll notice that the court also considers the intent of the defendant. This means that if you knew from the outset that your mark was similar to a registered mark, the court is less likely to look favorably on your case.
In both of the aforementioned cases, the intent of the defendant would likely have been a factor weighing heavily in favor of the plaintiffs. It would be tough for GG Strains or TCG to make a case that they weren’t intentionally referencing and playing off of the brands of the well-known plaintiff companies.
Before adopting a new brand name, it’s important to consult with an experienced trademark attorney and also to perform a trademark clearance search to ensure your brand won’t be infringing upon any existing registrations. This recent increase in cannabis trademark litigation is only an indication of what’s to come as the cannabis industry continues to grow.