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In Brief: Cannabis edibles cannot use a variation of non-cannabis trademark for candy.
Here’s What Happened:
Nerds is the brand name of several types of candy sold by Ferrara Candy Co. Nerds consist of small imperfect candy nuggets that are clustered together in various shapes, sizes and taste sensations. Since their inception in 1983, Ferrara has marketed the candies to children. In 2001, Ferrara introduced Nerds Rope which is a popular version of the candy that is in the shape of, well, a rope.
In 2020, Tops Cannabis and Hello LLC, a service provider for Tops, created and sold THC laced “Medicated Nerds Rope”.
Ferrara filed suit against Tops and Hello for trademark infringement. Ferrara alleged that there could "be no question that Tops' marketing and sale of Medicated Nerds Rope is willful and in callous disregard to both Ferrara's rights and the health of the consuming public, especially children." Ferrara also alleged that "there have been multiple reports of children being rushed to emergency rooms" after eating Medicated Nerds Rope they mistook for Ferrara’s Nerds Rope.
The court entered judgment for Ferrara. Tops was enjoined from manufacturing and selling Medicated Nerds Rope. Additionally, the court ordered Tops to: (1) destroy all of its stock; pay all net proceeds it earned to Ferrara; and (3) notify customers that Tops can no longer sell Medicated Nerds Rope.
Ferrara is not the only candy company dealing with THC laced knockoffs. Mars Wrigley has had to file several lawsuits against companies that are selling knockoffs of its Skittles and Life Saver brand candies. The infringers used similar names, like “Zkttlez”, the tag line “Taste the Rainbow” and nearly identical packaging.
WHY YOU SHOULD KNOW THIS: Trademark infringement includes creating confusion as to the source of the product. In these candy cases, consumers might believe that Ferrara and Mars Wrigley are getting on the cannabis edibles bandwagon. But, Ferrara and Mars Wrigley are not going there. So their trademark rights are violated.
For Ferrara and Mars Wrigley, they have an added type of trademark infringement called dilution. Trademark dilution can happen even if the infringer is selling different types of goods and services. The idea is that unauthorized use of a brand dilutes it. However, claims of dilution belong almost exclusively to famous brands.