Lopez v. Cookies SF, LLC

Background

Robert G. Lopez, proceeding without a lawyer, brought the action alleging trademark infringement, unfair competition, and unjust enrichment based on the commercial use of his “NEW YORK CANNABIS” and “NYC NEW YORK CANNABIS” marks. The alleged use involved curated boxes of cannabis products and related merchandise sold to subscribers. The City of New York moved to intervene, and the court previously granted that motion under Federal Rule of Civil Procedure 24(b). The City then filed an intervenor complaint seeking a declaratory judgment that Lopez had no exclusive right to use the words “NYC NEW YORK CANNABIS,” either separately or together, as a trademark or service mark for cannabis-related goods or services.

The City alleged that it owns several federally registered trademarks used on clothing, souvenirs, and other merchandise associated with City agencies. It alleged that Lopez sold clothing and other items in New York City bearing the Cannabis Marks and that those marks were virtually identical or substantially indistinguishable from the City Marks. The opinion also notes that, in a prior related proceeding, the City obtained a preliminary injunction against Lopez’s continued commercial use of the Cannabis Marks or confusingly similar variations.

Motion to Dismiss Standard

Lopez moved to dismiss under Rule 12(b)(6), which tests whether a complaint alleges enough facts to state a legally plausible claim. At this stage, the court accepts factual allegations as true but does not accept unsupported legal conclusions. The question is whether the complaint may proceed, not whether the claimant will ultimately win.

Court’s Analysis

To state a trademark-infringement claim, the City needed to plausibly allege both a protectable trademark interest and a likelihood that the defendant’s use would confuse consumers. The court found that the City plausibly alleged a protectable interest because it identified federal registrations for the City Marks. Federal registration provides initial evidence that a mark is valid and protectable.

The court also found that the City plausibly alleged likely consumer confusion. The City alleged that Lopez’s Cannabis Marks were counterfeit marks under the Lanham Act and were virtually identical or substantially indistinguishable from the registered City Marks. The court explained that counterfeit marks are inherently confusing, and that actual confusion need not be shown at the pleading stage; a likelihood of confusion is enough.

The court rejected Lopez’s argument that the City could not sue because it did not currently sell cannabis-related goods or services using the disputed words. The court explained that federal trademark law can prohibit the use of a counterfeit or colorable imitation of a registered mark when the use is likely to confuse, even if the trademark owner is not currently using the exact words in the same market. The court also relied on reasoning from a prior related proceeding that the City could plausibly enter or become involved in the cannabis market because of the legalization of recreational marijuana and the likely involvement of City agencies in regulation, enforcement, taxation, and consumer information.

Finally, the court rejected Lopez’s argument that the City challenged only stylized versions of the marks. The intervenor complaint expressly sought a declaration concerning the plain words “NYC NEW YORK CANNABIS,” either separately or together, and alleged that those words were merely descriptive or primarily geographically descriptive.

Disposition

Judge Ronnie Abrams denied Lopez’s motion to dismiss. The court did not decide the ultimate merits of the City’s trademark allegations. It ruled only that the City’s complaint plausibly stated a claim and could proceed. The parties were ordered to submit letters proposing next steps by October 14, 2022, and the Clerk was directed to terminate the motions pending at docket entry 67.