The federal Cannabis Act places significant limitations on the way that cannabis companies, and licensed producers in particular, can market and promote their products. As such, cannabis companies are constantly looking for creative ways to disperse unique customer experiences to boost brand identity and loyalty.
There is a growing need to protect the design and other distinguishing elements incorporated into the appearance of products and services, as well as online customer experiences. Collectively, these features are known as the trade-dress, or the look and feel of the brand. An example of trade-dress protection was illustrated in a recent federal court case, where it protected Skittles’ trade-dress against three John Does who marketed and sold THC-infused products innSkittles lookalike packaging.
Protecting trade-dress in Canada
In Canada, there is no separate process for registered trade-dress. Previously, trade-dress could be protected by registration under the Trademarks Act as a “distinguishing guise,” defined as the packaging, containers or wrapping of “wares.” This provision was repealed in 2014. Currently, trade-dress can be registered as a trademark or industrial design.
In Canada, trademark registration is not required for trademark rights to subsist. However, trademark registration offers both national protection and statutory enforcement mechanisms that are not available for unregistered marks.
Unregistered trade-dress established by ordinary commercial use can be protected under s. 10 of the Act, which codifies the common law tort of passing-off. Broadly, s. 10 requires unregistered trademark owners to produce evidence demonstrating how the mark is associated with the goods or services in the minds of consumers.
For the trade-dress to be registrable as a trademark, the trade-dress must be: (a) distinctive; and (b) not primarily functional. The Canadian Intellectual Property Office (CIPO) categorizes trade-dress categories, such as colour or three-dimensional shapes, as non-traditional trademarks, to be inherently non-distinctive. However, trade-dress can be protected in conjunction with a trademark if the mark itself is distinctive. Section 2 of the Act defines distinctive as a trademark “that actually distinguishes the goods or services in association with which it is used by its owner from the goods or services of others or that is adapted so to distinguish them.” The trademark becomes distinctive through use and CIPO can require the applicant to submit evidence demonstrating the trademark acquired distinctiveness as of the filing date.
A significant limitation on the registration of trade-dress is the functional features. Section 12(2) of the Act prohibits trade-dress protection by registering as a trademark if its features primarily have a utilitarian function, such as if the trademark’s features are essential to the use or purpose of either the goods or services, and its registration may grant a monopoly on those features. In Kirkbi AG v Ritvik Holdings Inc., the Supreme Court of Canada held that the unique features of the LEGO bricks that allows them to snap together could not be protected as trade-dress as it is primarily a functional characteristic.
In Mars Canada Inc. v. John Doe #1 (King Tuts Cannabis), the Court found that the packaging layout and design of Skittles to be unique amongst confectionary products. The defendant Flash Buds was found to have sold the infringing product in packaging that was nearly identical to the Skittles marks and trade-dress.
Blaze Pizza, LLC v. Carbone Restaurant Group Ltd., however, demonstrates that similar packaging of goods is not enough to warrant trade-dress infringement. Blaze Pizza asserted that the Carbone Restaurant Group operated and marketed its business in association with Blaze Pizza’s trade-dress by using the Blaze Flame Design, the phrase FAST-FIRE’D and a white-on-orange colour scheme. While the branding context is considered in a passing off action, the central issue of a registered trademark is the trademark itself and not the effect another mark has when they appear together. The Trademark Opposition Board did not find the use of a red-orange colour referencing fire, or the use of a flame in a mark with the words “FAST FIRE’D,” to be a distinctive design feature. Consequently, Blaze Pizza’s trade-dress was found to not have been infringed.
The Industrial Design Act protects elements of trade-dress, such as shape, pattern, configuration or ornament that “appeal to and are judged solely by the eye.” Similar to trademarks, a design cannot be registered if the feature is primarily a utilitarian function. Industrial design differs from trademark because an owner can assert a claim without the owner being required to show that the design acquired distinctiveness.
Industrial design registration requires that the design must: (a) be novel; (b) be created by the applicant or the applicant’s predecessor in title; (c) not primarily consist of utilitarian functions; and (d) not be contrary to public morality or order. A novel design cannot be the same or a substantially similar design that was disclosed to the public for more than 12 months before the applicant’s priority date or disclosed before the applicant’s priority date by any other person.
Trade-dress for websites and other digital properties
There is considerably more trade-dress litigation in the U.S. than in Canada, particularly regarding the look and feel of websites. In today’s world of technology, U.S. courts are granting trade-dress protection for digital properties like social media and mobile apps.
Recently, the Southern District Court of New York affirmed the viability of protecting the trade-dress of websites and other digital properties. The plaintiff OffWhite claimed that the defendant Off-White caused thousands of X (formerly Twitter) users to write hashtags in connection with the defendant’s company rather than the plaintiff’s company.
The U.S. differs from Canada because the Lanham Act allows trade-dress to be registered with the U.S. Patent and Trademark Office. In the U.S., trade-dress infringement claims must allege that: the trade-dress is distinctive and identifies the source of the product; there is a likelihood of confusion between the parties’ goods or services; and, the trade-dress has acquired secondary meaning. In demonstrating these three elements, it is the plaintiff’s responsibility to “articulate the specific elements that comprise its distinct dress.” Further, trade-dress can still be protected despite not being formally registered.
As sales and consumer interaction continue to expand in the technology sphere, cannabis businesses need to be vigilant about protecting their brand identities and trade-dress. Understanding the legal landscape is a critical first step in that regard.
Roland Hung: As Counsel in Torkin Manes’ Business Law and Technology, Privacy & Data Management Groups, Roland Hung’s practice encompasses all aspects of corporate law, with emphasis on technology, privacy compliance, cybersecurity and data management.
Matt Maurer: A partner and chair of both Torkin Manes’ Cannabis Law and Franchise Law Groups, as well as a Litigation Group member, Matt Maurer brings more than 15 years of experience combining a unique skillset that makes him a savvy business lawyer and an accomplished trial and appellate advocate to a wide range of clients.