In a recent lawsuit, the WM Wrigley Jr. Company (Wrigley) filed a complaint against Terphogz, LLC (Terphogz) alleging trademark infringement of Wrigley’s iconic brand, SKITTLES. Candy makers are always filing trademark infringement suits so what makes this one noteworthy? Here’s why. Terphogz is a cannabis company that sells cannabis, drug paraphernalia and promotional merchandise. In an apparent effort to leverage profit based upon the goodwill of the Wrigley company, Terphogz marketed a whole line of edible cannabis candies called ZKITTLEZ closely copying the Skittle’s color scheme, packaging, associated trademarks and other details of trade dress. The similarities are so close that it is hard to imagine that Terphogz’s intent was none other than to knockoff the Skittle’s brand. Wrigley does not pull any punches in that regard:Terphogz simply helped itself to Wrigley’s famous SKITTLES Marks, picking “ZKITTLEZ” as the name of its drugs, knocking off Wrigley’s federally registered TASTE THE RAINBOW slogan, and even copying Wrigley’s S logo.
Terphogz appears to be a legitimate California company. Why would it believe that it could avoid a lawsuit by marketing a knockoff of a famous brand? Perhaps, as one commentator has suggested, it’s attitude is a remnant of the cannabis counterculture, which wouldn’t think twice about copying a well-known brand for purposes of making fun and parody. Cannabis, however, can no longer be considered “counterculture”. Despite its illegality on the federal level, seventeen states, two territories, and the District of Columbia have legalized cannabis for adult recreational use. Twenty-seven states and the District of Columbia have decriminalized small amounts of marijuana. As of May 18, 2021, 36 states and 4 territories allow for the medical use of cannabis products. See the National Conference of State Legislatures for an overview of state cannabis laws.
In light of these trends, cannabis companies should be marketing product, especially edibles, with extreme care. Indeed, Wrigley is quick to point out in its complaint that
Unscrupulous companies like Terphogz who push drugs and drug paraphernalia using trademarks belonging to confectionery companies pose a danger to children. Illinois recently was forced to enact legislation prohibiting cannabis companies from disseminating advertising or packaging for cannabis or cannabis-related products that imitates candy labeling or packaging. See 410 Ill. Comp. Stat. 705/55-20 – 55-21.
Wrigley also claims that it commenced the action to protect the public from Terphogz’s “deceptive and dangerous business practice” and, of course, to “safeguard the goodwill and reputation of Wrigley’s SKITTLES brand.”
It’s difficult not to be cynical about Wrigley’s motives in bringing the lawsuit — Wrigley has its own financial interest in cannabis — but it certainly raises the importance of regulating cannabis companies’ marketing practices. Terphogz and companies of the same ilk must come to grips that it is not the 1960s anymore and that playful branding will not only cost them money but may also endanger public safety.
It is not helpful that cannabis is illegal on the federal level. As a result, federally registered trademarks are not available to cannabis companies, which market and sell any non-comestible product with a higher THC content than CBD (Cannabidiol). Theoretically, had Terphogz tried to register its ZKITTLEZ brand it would have been rejected by the trademark examiner as being confusingly similar to SKITTLES. These kinds of rejections, which are not available to cannabis companies now, would have a collateral public protection effect. Hopefully, this will change in the future.
— Adam G. Garson, Esq.