The legalization of recreational marijuana in Colorado and Washington has lead to many novel intellectual property issues.

For example, in March 2014, a new state tax was proposed that would on Washington marijuana-related businesses seeking IP protection. Specifically, a tax of $3.60 would be assessed per $1000 of value of a business’s IP assets, including trademarks, trade names, brands, patents, and copyrights related to marijuana.  The intended purpose of the tax is to “capitalize on [Washington’s] unique position” and use the generated revenue for agricultural research.  Dissenters point to several shortcomings, arguing that the bill discourages business from seeking trademark protection, penalizes companies with the best reputations, and fails to stipulate how the tax will be calculated.

Edible Marijuana and High Stakes Consumer Confusion

Marijuana has also entered the world of Hershey’s high-stakes trademark litigation, which was recently settled.  In June, Hershey Co. filed a lawsuit in Federal District Court against a Colorado-based marijuana candy manufacturer for producing products that resembled many of Hershey’s flagship products, including Reese’s Peanut Butter Cups, Almond Joy, Heath bars and York Peppermint Patties. Hershey’s allegations against Tincturebelle, LLC included trademark dilution, trademark infringement, false designation of origin, unfair competition, and passing off.

Hershey’s claimed consumer confusion would result in the dilution of their trademarks, they also cited the uniquely severe impact that confusion in this case could have on minors. Namely, consumer confusion of Hershey product with the infringing products could have the disastrous result of accidental ingestion by children.  As part of the settlement agreement, the defendants agreed to destroy any remaining infringing products.

What to Expect in the Near Future

Tincturebelle, LLC is not the only edible manufacturer Hershey has filed suit against— Conscious Care Cooperative, based in Washington, has also been named in a trademark infringement suit. Hershey has made similar allegations against the edible manufacturer.

As the edibles industry and the larger recreational marijuana industry continues to grow, we can expect them to see a rise in business and IP litigation involving marijuana businesses in the coming months and years.