Whether driven by new laws or technology, companies and individuals always push the limits of the law during the industry’s formative years. Obvious examples like Napster come to mind, as well as the more dated example of the VCR. Out in Washington and Colorado, the new booming business of legal marijuana is no different.

According to some reports, the legal marijuana industry could be worth up to $10 billion in 5 years.  The State of Colorado reportedly took in $3.5 million in marijuana related taxes and fees in January alone.  The industry presents a number of opportunities for new businesses and branding, as one of our colleagues previously discussed last year. With the possibility of these levels of profits, it should come as no surprise that a few companies have jumped in head first without fully considered the legal ramifications of the products they’re putting on the shelves.

Just this week, the Hershey Company filed a lawsuit against a Washington marijuana dispensary alleging trademark infringement and dilution of the company’s rights in the name and packaging for its Reese’s Peanut Butter Cups and Mr. Goodbar candy products. The company was selling “Reefer’s Peanut Butter Cups,” a marijuana edible intended to taste like a chocolate and peanut butter candy.

Is Hershey overreaching? “Peanut butter cups” appear to be a generic term. I’ve certainly seen numerous local candy shops (and larger Hershey rivals like Palmer candy) selling directly competitive “peanut butter cup” items. And yes, Reefer is somewhat similar to Reese’s, but they seem to present arguably distinct commercial impressions. A quick search seemed to reveal these instincts, as each of Hershey’s registrations disclaims PEANUT BUTTER CUPS apart from the mark as shown. The same thing for Hershey’s competitors, who also own federal trademark registrations for marks containing the phrase PEANUT BUTTER CUPS.

Looks like our Washingtonian friends might be in the clear! Of course, a picture is worth a thousand words (or less, depending on how wordy your complaint is…):

 With the added context, what do you think?

And what about Mr. Dankbar?

 

While it is unlikely that any individual would mistake a Mr. Dankbar for a Mr. Goodbar, it still creates the possibility of dilution, tarnishment, and a possibility as to mistake of sponsorship or endorsement. While it may seem absurd at the moment to think that Hershey might sponsor or be connected in some way to a marijuana-based confection, it isn’t unprecedented. After all, both Starbucks and Godiva sell their own branded liqueurs.  Brands that began as alcoholic beverages, such as Bailey’s, have also branched into consumer grocery products, too. It isn’t too hard to imagine companies crossing the line into legal marijuana products as well in the foreseeable future. In fact, other companies have been making similar challenges to use of candy, cereal, and other food products as flavors for e-cigarette tobacco products.

While there is certainly the possibility that Hershey’s might, in some situations, be overreaching with its trademark rights. Had the dispensary only used PEANUT BUTTER CUPS, or even just the name REEFER PEANUT BUTTER CUPS, this situation would be a lot closer. However, with the similarity of the packaging, the dispensary will face an uphill battle to mount any kind of defense. One thing is for certain, there will likely be many more trademark skirmishes to come as the marijuana industry takes shape.

 

 

  • stevebaird

    Tim, after seeing the trade dress here, I’m left convinced that the purveyors of these products were sampling their wares while coming up with the infringing package designs, these cases shouldn’t last long at all.

  • James Mahoney

    What about trade dress, though? To my eye, both Reefer’s and, especially, mr. Dankbar clearly echo the Reese’s and mr. Goodbar packaging. I’m assuming the packages are of similar size, which to me would add to the potential confusion of what company is producing the product.

    And, as you point out, it’s certainly not beyond the realm of possibility that established food companies will expand into the new, legal market at some point (though that decision would need very close consideration from a cost-benefit-reputation standpoint). It makes sense that those companies would aggressively defend their dress or trademarks, if only to prevent any possible misperception that they’re responsible for product that many of their loyal consumers would object to.

    Consider the possibility of a child who likes Reese’s or mr. Goodbar coming across one of the marijuana packaged goods. Wouldn’t that be a strong argument in favor of Reese’s position?

    • Tim Sitzmann

      Thanks James, I definitely agree. I was on the fence as to the strength of the infringement claim until I saw the nearly identical product packaging. Reese’s does have a registration for the product packaging used above. There is likely enough similarity anyway, but the use of the identical shade of orange and yellow is the nail in the coffin for me.
      You also bring up a good point regarding safety issues. I feel as if candy cigarettes were taken off the market, in part, for a similar reason.

  • Anthony Shore

    In an image, those products are parody. But as actual products sold to consumers, they’re infringement.