Cannabis Trademark Litigation: Internet Platform Liability (Mr. T v. Leafly)

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On August 22, 2019, actor Mr. T, greatest identified as a star of the Television series “The A-Group,” sued Leafly Holdings Inc. for trademark infringement. The lawsuit was filed right after Mr. T’s attorneys sent various cease and desist letters to Leafly, which have been allegedly ignored.

The lawsuit stems from Leafly’s listing of a strain known as “Mr. Tusk,” which is sold by third-celebration cannabis retailers. Leafly utilizes a 3-letter periodic table-style tile design and style for all of its listings, and the distinct tile applied for the Mr. Tusk strain is “Mrt.”

In his cease and desist letters, Mr. T alleges that Leafly’s unauthorized use of Mr. T’s name “is probably to bring about harm to the industrial worth of his ideal of publicity. It also creates a false or misleading inference of endorsement, approval, or sponsorship of [Leafly’s] goods by Mr. T and is a violation of his useful trademark rights.”

In order to prevail on a trademark infringement claim, a plaintiff have to show a “likelihood of confusion” on the element of customers which means, in this case, that customers would assume that Mr. T endorses or is in some way affiliated with the Leafly listing. A court will contemplate eight elements in evaluating a likelihood of confusion argument (AMF Inc. v. Sleekcraft Boats):

  • Strength of the mark
  • Proximity of the goods
  • Similarity of the marks
  • Proof of actual confusion
  • Promoting channels applied
  • Sort of goods and degree of care probably to be exercised by the purchaser
  • Defendant’s intent in deciding on the mark and
  • Likelihood of expansion of the solution lines.

Right here, of course, each sides contend that evaluation of the elements weighs in their favor.

On the other hand, and this is what tends to make this trademark infringement claim specifically fascinating, Leafly is not in fact making use of the “Mrt” tile to sell its personal goods. Leafly does not sell or distribute any cannabis goods, and does not come up with the names for the goods it lists on its web site. Can Leafly then be held liable for infringement of Mr. T’s trademarks?

There has been a excellent quantity of debate in current years concerning the extent to which e-commerce platforms can be held liable for trademark infringement involving third-celebration content material. The Digital Millennium Copyright Act (DMCA), which applies to copyrights, delivers that hosting providers are not liable for third-celebration copyright infringing content material unless they (1) have expertise of the infringing content material and (two) do not take down the infringing content material expeditiously. Despite the fact that the DMCA does not apply to trademark infringement, courts have applied equivalent principles primarily based on contributory and vicarious liability.

A case that illustrates exactly where U.S. courts have drawn the line on this challenge is that of Tiffany v. eBay, exactly where Tiffany sued eBay for trademark infringement right after getting that thousands of pieces of counterfeit “Tiffany” jewelry had been sold on the platform. The court eventually dismissed Tiffany’s claims, holding that eBay was neither straight nor indirectly liable for third celebration sales of the counterfeit goods on its platform simply because Tiffany could not show that eBay had particular expertise of particular infringing things. eBay therefor had no affirmative duty to remedy the predicament.

But right here, Mr. T’s attorneys sent various letters to Leafly asking that they take away the allegedly infringing content material, which Leafly declined to do. Furthermore, in his complaint, Mr. T has alleged that “[t]right here is a direct connection involving the use of ‘Mr. T’ and the industrial goal of marketing a cannabis strain as it is listed on the Leafly web site,” and also that Leafly and Does 1 via 9 (the unidentified cannabis sellers) have been “actual, implied or ostensible agents, servants, personnel, partners, joint venturers, alter egos and/or co-conspirators of one particular one more, and have been at all relevant instances … acting on behalf of one particular one more …” It is clear that Mr. T’s counsel does not view Leafly as a mere passive, third-celebration platform that can not be liable for the trademark infringement of its marketing buyers.

We’ll be curious to see how this one particular plays out. Mr. T is mainly looking for, via injunctive relief, for Leafly to alter the “Mrt” tile. He is not looking for damages. Regardless of the court’s selection, internet platforms that supply listing and marketing solutions for cannabis corporations ought to take note – trademark litigation is high-priced, and the conduct of your buyers could land you in hot water. Be certain that the agreements you have in location with third parties listing on your web site address these sorts of scenarios, and have a protocol in location for addressing complaints from third-parties of copyright and trademark infringement.

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