Vape Shops Threatened with Lawsuits for Selling

A company best known for selling hookah products is sending cease-and-desist letters to vape shops, threatening to take legal action for selling products that use the name “Ice.” California-based Fantasia Distribution is also involved in two lawsuits charging several vape manufacturers with infringing Fantasia’s trademark.

In multiple social media posts, vape shop owners have described receiving letters from lawyers representing Fantasia, threatening to take legal action if owners don’t meet Fantasia’s demands. Some have reported phone calls with Fantasia’s lawyers during which offers were made to settle any future Fantasia claims for cash payments of $5,000 or less, though Vaping360 hasn’t confirmed those offers.

Unrelated to its threatening letters, in 2020 Fantasia filed at least two lawsuits charging multiple vape manufacturers and distributors with trademark infringement. The defendants in the cases we’re aware of—both filed in the U.S. District Court for the Eastern District of New York—include Access Vapor, Cool Clouds Distribution, Limitless Trading Co., Magellan Technology, Pop Vapor Co., and Romeo Vapors. Motions for summary judgment (asking the court to rule on the case without a trial) are due soon in one case.

The defendants in those cases are asking the court to cancel Fantasia’s trademark registrations, claiming the term “ice” is generic, and that customers don’t recognize the word as a “source identifier” (a brand or trademarked name), but as a flavor description.

Does Fantasia own rights to use of the word “ice”?
Fantasia registered the “Ice” trademark in 2011 strictly for hookah tobacco, and registered it again in 2014 for “Hookah tobacco; Herbal molasses; Herbs for smoking; Molasses tobacco; Smoking molasses; Shisha; Vapor stones for electronic hookahs; Electronic hookahs; Cartomizers, namely, combination electronic cigarette refill cartridges sold empty and atomizers, sold as a component of electronic cigarettes.”

Manufacturers since the early days of commercial e-liquid production have used terms like “ice” and “breeze” to denote products with menthol flavoring. The term became especially popular as a flavor descriptor with the 2020 commercial explosion of disposable vapes, many of which use e-liquid that combines fruit flavors with menthol or menthol-like coolants. The resulting flavors are often described as “banana ice” or “strawberry ice,” to cite two common examples. In most cases, “ice” is not part of the brand name, but a descriptive word added to the flavor name to denote a cool sensation.

The court will decide whether Fantasia’s trademark for a product named “Ice” applies to all products that use the word as a flavor descriptor, and not a brand. The company’s lawyers say it does, or at least that such uses of the word are “confusingly similar” to the Fantasia brand. The judge in those cases could also decide that the trademark has become “diluted”—used so frequently by so many companies that it no longer has value as a brand identifier.

According to lawyers we consulted, the threatening letters have no legal weight. None of the Fantasia lawyer’s demands are backed by a court order.

While Fantasia apparently did use the name “Ice” for shisha (hookah tobacco), it’s uncertain whether the company employed the “Ice” name for any of its own e-liquid-based vaping products before it decided to take legal action in 2020 against other manufacturers for allegedly infringing the mark.

The company appears to currently make and sell some disposable vapes, but in a 2022 warning letter, the FDA noted that Fantasia had received Refuse-to-File determinations in 2021 for a premarket tobacco application (PMTA) covering 31 products. A refuse-to-file decision means the application is discarded and not reviewed by the FDA, and the products are subject to FDA enforcement actions. Fantasia’s name does not appear on the FDA master list of products for which PMTAs were successfully filed before the Sept. 9, 2020 submission deadline.

However, whether Fantasia’s “Ice” products are fully legal to sell may not affect the company’s legal right to defend the trademark. One attorney familiar with Fantasia’s trademark lawsuits described that as a gray area. A judge could decide the case without weighing in on the legality of Fantasia’s vaping products—or could decide Fantasia’s legal hookah products are similar enough to vaping products that the mark for one could be infringed by the other.

Fantasia’s cease-and-desist letters
The letters received by vape shops bear the letterhead of the Pacific Coast Law Group, and are signed by attorney Ash Reza. The ones Vaping360 has seen are virtually identical, with the targeted business’s name plugged in so the letter appears to be unique to that particular business.

The letters don’t appear to be targeted at particular stores based on their sales history. Some shop owners have reported that they have never sold any “ice” products, and are mystified why they would be threatened with legal action.

“We represent Fantasia Distribution, Inc.,” a typical Fantasia letter begins, “and hereby demand that [recipient name] immediately cease and desist in any additional use of the term “ICE” and any confusingly similar mark, in connection with any and all tobacco, e-cigarette, vaping and smoking-related products. We further demand that [recipient name] provide this office with a detailed accounting of the sales of all infringing products.”

The letter goes on to claim that Fantasia has “invested considerable resources in the marketing of its brands,” and has “achieved significant market recognition, as you are aware.”

The Fantasia letter makes a number of specific demands on recipients:

·Cease and desist all use of any mark confusingly similar to any Fantasia mark
·Agree to cooperate in the investigation of other parties involved in use of Fantasia trademarks
·Provide copies of all records pertaining to procurement and sale of the products, “including the names of all parties that may have manufactured, imported, exported, distributed or purchased these products”
·“Surrender all infringing items in your possession and provide a full accounting of all sales and pay an appropriate fee for infringement”
·All “packaging and materials bearing the infringing marks…gathered and surrendered to our office for destruction”
·Preserve all documents and files “relating to your purchase and sales of the counterfeits”

The Fantasia lawyer demands that the letter recipient contact his office within 15 days to confirm the business will cease and desist. “We prefer to resolve this issue amicably and without the need for further legal action,” writes Reza. “If I do not hear from you within such time, I will assume that you intend to continue infringing my client’s trademark and engaging in unfair and deceptive trade practices despite our demands.”

According to lawyers we consulted, the threatening letters have no legal weight. None of the Fantasia lawyer’s demands are backed by a court order. So the only real threat is that Fantasia might take legal action against individual stores. And while the company could do that, it would likely wait for the outcome of its current lawsuits before proceeding with additional ones.

“They’re using these [trademark] registrations to extort settlements out of small retailers that don’t have the resources to fight it,” one attorney told Vaping360. Another lawyer told us he believed Fantasia is trying to convince small businesses to pay quickly because the company is worried about having its trademark registrations canceled by a judge in one of the New York lawsuits.

The lawyers we spoke with recommend that small businesses receiving such letters consult their own attorneys before taking any action—and certainly not volunteer any information about the products they sell or used to sell to any outside parties.