Marijuana trademark litigation: the trademark is the sum of its parts
In one case, we have Watch closely, A California District Court judge recently rejected the motion of the cannabis company Capna Intelligent. The motion seeks to dismiss the tobacco giant ITG Brands’ claim for dilution of its “KOOL” brand. ITG’s brand uses “KOOL OOs”, and ITG’s brand uses “BLOOM OOs”.
To recap, in December 2020, ITG sent a termination letter to Capna. The letter was “clearly limited to [Capna’s] Use interlocking’OO’s, which are the core of the KOOL logo, not for [Capna’s] Use the trademark BLOOM itself. In other words, ITG disputed the fact that both trademarks have interlocking OO. Capna did not participate, so ITG filed a lawsuit in January 2021. A few months later, Capna began to reject ITG’s third trademark dilution claim .
Backup-trademark dilution refers to “when a trademark is used to identify different products, its value will be weakened”. To win the trademark dilution claim, the owner must prove:
- The trademark is famous,
- The defendant used the trademark for commercial purposes in business,
- The defendant’s use began after the trademark became famous, and
- The defendant’s use of the trademark “may cause the blurring of the well-known trademark or the dilution caused by tarnishing, regardless of whether there is actual or possible confusion, competition, or actual economic damage.” 15 USC § 1125(c)(1).
In the motion to dismiss, Capna believes that ITG’s KOOL OO cannot be diluted because they are not well-known and their marks are not similar enough.
The court did not hesitate to strike at Kapner’s first argument. In terms of dilution claims, “a trademark is well-known if it is widely recognized by the general consumer public in the United States as the designation of the source of goods or services of the trademark owner.” 15 USC § 1125(c)(2)(A) . When determining whether a trademark is famous, the court “may consider all relevant factors”, including:
- The duration, scope and geographic scope of trademark advertising and publicity,
- The sales amount, quantity and geographic scope of the goods or services provided under the trademark,
- The actual degree of recognition of the trademark, and
- Whether the trademark has been registered.
The court reminded Capna that raising doubts about facts was not enough to defeat ITG at the pleading stage and respected ITG’s statement that KOOL OO is famous.
In resolving Capna’s second argument that KOOL OO and BLOOM OO are significantly different, the court reiterated:
“Whether the defendant’s trademark will cause dilution is a matter of fact.” ……“Fuzzy dilution” is an association caused by the similarity between the trademark… and the famous trademark, which damages the uniqueness of the famous trademark. “Dilution due to tarnishing” is the association produced by the similarity between the trademark… and the famous trademark that damages the reputation of the famous trademark.
Capna believes that KOOL and BLOOM are completely different words. ITGB uses green and blue packaging, while Capna uses red packaging. The court acknowledged that Capna made an interesting argument-ITG mistakenly conflated “OO” and “KOOL OO” to support their argument that Capna’s use of “OO” constituted a trademark dilution. The court admitted that “the result may be that the KOOL trademark is very famous, but KOOL OO is not.” However, the court ultimately disagreed:
Although KOOL and BLOOM are obviously different words, ITGB may use green and blue packaging, and Capna uses red packaging, but these elements are not the only basis for ITGB’s claims. On the contrary, ITGB questioned Capna’s use of interlocking OO within and next to the name BLOOM, and the similarity between BLOOM OO and KOOL OO when used in relation to related products. Since both ITGB and Capna sell smoking products, consumers may mistakenly believe that KOOL cigarettes and BLOOM hemp products are from the same source, which is based on the shared use of interlocking OO that is almost the same in each brand’s respective logo. “The trademark series is a group of trademarks with identifiable common features, in which the composition and use of the trademark enable the public to associate … the common features of the series with the trademark owner.” Therefore, ITGB fully claims that the KOOL logo and the BLOOM logo are one of the The similarity between the two is sufficient to maintain the dilution statement.
A motion to dismiss is difficult to defeat, but the opinion is a good reminder that you cannot be immune to trademark infringement and dilution claims just because your trademark has certain differences. Be sure to consult a knowledgeable trademark attorney to avoid such litigation.