We have been following closely the lawsuit brought by the tobacco giant ITG Brands against the cannabis company Capna Intelligent.As we wrote Report on June 27, ITG sued Capna for a trademark dilution claim related to ITG’s “KOOL” brand. ITG’s brand uses “KOOL OOs”, and Capna’s brand uses “BLOOM OOs”.
After another blow to Kapner Motion to dismiss, Judge Wright approved ITG’s preliminary border motion last week, which will severely limit Capna’s ability to use the allegedly infringing trademark while the case is pending.
As a review, when the plaintiff (here ITG) determined the following, the Ninth Circuit issued a preliminary injunction:
- It is likely to be successful;
- In the absence of preliminary relief, it is likely to suffer irreparable damage;
- The balance of the stock is good for it; and
- The ban is in the public interest (to prevent consumer confusion and to protect trademark rights is in the public interest).
Regarding the first factor, as I mentioned in the previous article, Judge Wright has already stated that he agrees with ITG when he dismissed Capna’s motion to dismiss. In order to succeed in a trademark infringement claim, ITG must prove (a) ownership of a valid trademark and (b) the trademark used by Capna may cause consumer confusion.Here, since ITG has a registered trademark, it constitutes On the surface Evidence that the mark is valid. In addition, ITG believes that there is a possibility of consumer confusion because all eight factors that need to be considered in this case exist:
- Trademark strength: “The KOOL trademark has a high degree of public recognition”…ITG “continues and a large number of exclusive promotion…and sells cigarette products with the KOOL trademark, focusing on the interlocking “OO” more Over 88 years.”
- Trademark similarity: “…The interlock “OO” used by the defendant on its Bloom brand products is usually used in almost the same way as the interlock “OO” in the KOOL trademark…”
- Proximity of the goods sold: “Based on the many well-known investments made by large tobacco companies in cannabis companies, it is certainly reasonable for the purchaser of the defendant’s product to believe that the source of the product is ITG. “
- The similarity of the marketing channels used: “In fact, [Capna’s] According to federal law, goods may be illegal, so they can only be sold through state-licensed pharmacies and have nothing to do with the Trademark Office.” [previous] The conclusion is that the goods are related to commerce. “
- The type of goods and the degree of caution that the purchaser may be cautious: “Here, the product involved is relatively cheap, which shows that the purchaser will not be highly cautious.”
- Evidence of actual confusion: Interestingly, no examples are cited.
- The defendant’s intention to choose the trademark: “The wrong intention of the defendant to choose interlocking “OO” was further reflected in its repeated infringement of other iconic brands.
- Possibility of expanding to other markets: “[Capna] It is seeking to register the Bloom logo: (1) Cigarette cartridges for e-cigarettes; (2) E-cigarettes, oral vaporizers and other equipment used with hemp oil extracts containing CBD from hemp “
After a full briefing and oral arguments, the court approved ITG’s motion and wrote:
“The court considers that there are good reasons for approving the motion, because ITGB may be successful based on the merits of its claims. Without preliminary remedies, ITGB may suffer irreparable damage. ITGB’s equity balance prompts approval, and the injunction is in the public interest .”
Capna must now comply with the following regulations:
- By August 2, 2021, stop using ITG’s Interlocking OO logo;
- Immediately display corrective advertisements and/or other notices on its website and social media pages to inform the public that Capna will use the new logo;
- By November 30, 2021, stop selling or distributing any and all products that are interlocking; and
- By November 15, 2021, send an ITG-approved notice to all its retail distributors stating that each distributor can choose to return any product with an interlocking circle that it owns.
In addition, while the case was pending, Capna was prohibited from expanding any promotion or sales of interlocking products, and provided monthly accounts to ITG.
Ouch. Preliminary injunctions are difficult to obtain and have a higher standard than most court remedies, but this case shows that if approved, they do cause harm (and are an effective tool in litigation). We will be surprised to see the case last longer, but in any case, we will monitor and report any new developments.