A Win For Brand Owners Battling Look-alike Cannabis Products

• Published date: 18 August 2022
• Subject Matter: Intellectual Property, Cannabis & Hemp, Trademark
• Law Firm: Bereskin & Parr LLP
• Author: Ms Tamara Winegust and Siobhan Doody

An encouraging development for rights holders fighting unauthorized use of their brands with cannabis products. In what appears to be one of the first decisions involving cannabis products that "knock off" popular snack food brands, Justice Gleeson in Mars Canada Inc. v. John Doe #1 (King Tuts Cannabis), 2022 FC 1193 (Mars Canada) issued an injunction and ordered damages be paid by defendants who sold THC-infused candies branded SKITTLES and in packaging that copied the trade dress used by Mars Canada for its genuine SKITTLES branded candy. The total damages and costs awarded amounted to CAD$144,600 - CAD$15,000 in nominal damages, CAD$30,000 in punitive damages, and CAD$3,200 in costs, per defendant. In granting the order on a motion for default judgment, the Court found that the defendants' adoption of the SKITTLES mark and look-alike packaging for THC-infused candy was not only likely to cause consumer confusion and depreciate the value of the goodwill attached to the genuine candy, but also raised a unique public health risk, particularly for children.

Following the legalization of recreational cannabis in Canada in 2018, brand owners have seen an uptick in the unauthorized use of their branding to promote and sell cannabis-related products and services. For those in the food and beverage industry, such use has increasingly taken the form of cannabis-infused look-alike products and packaging. The issue has become so acute that earlier this year Health Canada issued a public advisory relating to "Accidental ingestion of illegal 'copycat' edible cannabis products causing serious harm to children". It warns the public not to consume such products and requests that such products be reported to local law enforcement.

The Court's recognition in Mars Canada of the relationship between public safety on the one hand and confusion and the depreciation of a brand's goodwill on the other, and its willingness to issue an injunction and damages to stop and penalize unauthorized use of trademarks with cannabis products is an encouraging sign. It suggests that rights holders fighting against unauthorized use of their brands with cannabis-related products, and particularly consumables, could be well served by commencing litigation against manufacturers, importers, distributors, and sellers of these products in Canada.

Likewise, the decision sends a strong message to those in the cannabis industry that, notwithstanding the legalization of edible cannabis and THC...