Canopy Growth Corp. (TSX:WEED) (NASDAQ:CGC) and Martha Stewart Living Omnimedia - based in New York and owned by Marquee Brands - are being sued by Northwest Natural Goods for a copyright and trade dress infringement, reported Marijuana Business Daily.

Filed by Perkins Coie on behalf of Northwest Natural Goods earlier this month, the complaint accused the defendants of launching a line of CBD products with packaging nearly identical to Wyld's.

The Complaint

The complaint from the Portland-based cannabis edibles company behind the brand 'Wyld' alleges that Northwest Natural Goods and Canopy Rivers, a former strategic investment subsidiary of the Canadian cannabis giant, collaborated on the Wyld CBD line of products for several months in 2019, as first reported by Law360.

During that time Northwest Natural Goods allegedly provided Canopy Rivers with a Wyld CBD business plan, which included "trade dress" and copyrighted materials for the brand's blackberry, lemon and raspberry CBD gummies.

"Prior to distributing the Martha Stewart CBD products, defendants knew of Wyld's trade dress and, on information and belief, intentionally copied that trade dress to trade off of Wyld's goodwill and reputation," the complaint said.

Stewart took an advisory role at Canopy in February 2019 as part of the collaboration between the cannabis company and Sequential Brands Group, Inc. (NASDAQ:SQBG).

In September 2020, the partnership resulted in a new line of hemp-derived wellness supplements.

In the following years, the collaboration between Canopy and the "Domestic Diva" yielded a myriad of new products, including Martha Stewart CBD Wellness Gummies Sampler, a new line of CBD for Pet products and the latest limited-edition wellness gummy, Pumpkin Spice, to name a few.

Meanwhile, the complaint also noted that in some retail locations, Wyld products and Martha Stewart CBD gummies are placed side by side on shelves, causing confusion among consumers.

Northwest Natural Goods is now pursuing compensation, "compensatory damages in an amount to be determined at trial, attorneys' fees, costs and disbursements."

Cointreau's Accusations

In a related issue earlier this year, Remy Cointreau (OTC:REMYY) put an end to a lawsuit the French alcohol maker filed against Canopy, accusing it of alleged trademark infringement over its CBD-infused sparkling water brand dubbed Quatreau, according to a New York court filing.

Initially, Cointreau claimed that Canopy used Quatreau "in order to unfairly capitalize on the goodwill and reputation of the Cointreau mark," and that "(The) defendants' wilful actions will not only confuse consumers as to their affiliation with plaintiffs and the Cointreau brand but will blur the exclusive association plaintiff enjoys between Cointreau and a single source of orange liqueurs."

CGC Price Action

Canopy's shares traded 4.9419% lower at $3.29 per share at the time of writing on Friday morning.

Photo: Benzinga Edit, Source: Shutterstock