The Skittles/Zkittlez trademark lawsuit between Wrigley’s and Terphogz LLC has been finally resolved. Wrigley’s, the maker of multi-colored fruit-flavored Skittles candies, sued seller Terphogz LLC for trademark infringement for marketing products under the “ZKITTLEZ” name.
Under a proposed permanent injunction filed on in a Chicago federal court, Terphogz LLC agreed not to use Skittles, Zkittlez, or similar terms for cannabis-related sales. It also agreed to give up the domain name zkittlez.com while still being able to use the letter ‘Z’ so people won’t be confused.
The settlement provides a precedent for other businesses to learn from when it comes to protecting their intellectual property and trademarks in the cannabis market.
In-Depth Look at the Case
Wrigley’s filed a trademark infringement lawsuit against seller Terphogz LLC, accusing them of using Skittles and Zkittlez marks without permission to market cannabis-related products.
The company alleged that Terphogz not only advertised, distributed, and sold goods bearing the ZKITTLEZ Marks but also registered the domain zkittlez.com. Terphogz had even gone so far as trying to file its own trademark applications for its logos, which Wrigley opposed.
The U.S. District Court Judge rejected Terphogz’s bid to dismiss the case in November 2021. The court order allowed Wrigley’s complaint against Terphogz LLC to move forward with a trial date set for February 2022.
Eventually, both companies agreed on a settlement agreement, including a permanent injunction prohibiting the company from ever using the “Skittles” or “Zkittlez” marks and giving up a similarly named website.
Terphogz also agreed to withdraw its trademark applications filed for its logos, get rid of all Zkittlez inventory and inform all its vendors of the settlement agreement. The company is also not allowed to refer back to the Zkittelez name in advertising or use keywords, AdWords, or search engine optimization related to “Skittles” or “Zkittlez.”
However, they can still use the letter ‘Z’ on the packaging, labeling, and product lists as long as it complies with applicable government laws, rules, or regulations.
Implications for Cannabis Companies and IP/Trademarked Logos/Branding
The Skittles/Zkittlez trademark lawsuit has set a precedent for other companies looking to protect their intellectual property in the cannabis market. The settlement serves as a warning to companies who want to use mainstream CPG branding, as it illustrates the risks associated with trademark infringement.
It also highlights the importance of understanding the relevant laws related to trademarks and how businesses should conduct themselves when using existing brands or developing new ones for cannabis products.
Other businesses can learn from this case that they should be aware of their IP rights when it comes to branding and marketing cannabis products. Companies should think twice about using existing CPG trademarks in their branding, as this can lead to costly legal battles.
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