Final yr, I wrote about an uptick in trademark litigation between hashish firms. The sort of litigation differs from a lot of the cannabis-related trademark litigation we’d seen thus far, the place non-cannabis firms with established manufacturers have sued hashish firms for trademark infringement.
Particularly, I highlighted the litigation between Harvest Dispensaries Cultivation & Manufacturing Amenities, LLC, primarily based out of Arizona (referred to as “Harvest of Arizona”), and Harvest on Geary, Inc. / Harvest Off Mission, Inc., primarily based right here in San Francisco (referred to as “Harvest of California”), whereby Harvest of Arizona sued Harvest of California in Arizona alleging that Harvest of California stole the HARVEST title and brand.
The portion of the lawsuit filed in 2017 alleged trademark infringement, intentional interference with contract and with enterprise relations, conversion, unfair competitors and misappropriation of commerce secrets and techniques, fraud, violation of Arizona’s Racketeering Act, violation of Arizona’s Shopper Fraud Act and unjust enrichment. In its grievance, Harvest of Arizona, which was established in 2011 and started utilizing the HARVEST mark in 2012, claimed to personal retail dispensaries and cultivation/manufacturing amenities in Arizona, Nevada, Illinois, Maryland, Massachusetts, Michigan, and Florida. It had no presence in California.
In 2018, when Harvest of Arizona introduced its plans to increase into California, Harvest of California, which owns California state logos for the HARVEST title, sued Harvest of Arizona in California Superior Court docket for trademark infringement and unfair competitors in California. Harvest of California observed in its grievance that it is a easy case of trademark infringement however that as a result of the events are within the hashish business, solely state regulation applies. Federal trademark regulation just isn’t relevant.
This dispute ended up settling, however earlier this yr, yet one more trademark lawsuit involving Harvest of Arizona and the HARVEST mark was dominated on by a decide in within the Faulkner County Circuit Court docket in Arkansas, and Harvest of Arizona misplaced.
Within the Arkansas case, Harvest Hashish Dispensary (“Harvest of Arkansas”), a small, locally-owned enterprise working in Conway, Arkansas, gained a preliminary injunction prohibiting two amenities, a dispensary in Little Rock and a cultivation facility in Newport, managed by Harvest of Arizona from utilizing the HARVEST mark. Harvest of Arkansas conceived of its “Harvest” title in September 2017 because it was searching for licensure from the state. And though Harvest of Arizona had used the “Harvest” title previous to that date, it had not executed so in Arkansas, giving Harvest of Arkansas precedence rights within the mark inside the state of Arkansas.
This case highlights one of many largest challenges confronted by hashish firms – the lack to acquire federal trademark safety to cowl hashish items (or any items that violate federal regulation). As hashish MSOs increase into a number of states, their lack of federal trademark safety leaves them susceptible to conditions like this, the place firms beat them to a specific geographic space and start utilizing the mark first.
Within the U.S., widespread regulation trademark rights start accruing upon use of the mark in commerce, and are sometimes geographically restricted. The results of this lack of federal trademark safety coupled with the power to acquire state trademark rights and/or geographically-limited widespread regulation rights is that hashish operators are left with a patchwork of trademark safety that’s depending on the place they’re licensed to function.
Whereas there are methods these firms can and must be utilizing to guard their trademark and IP rights to the best extent attainable (that is one thing I spend quite a lot of time advising my purchasers on), there may be and will probably be no excellent answer till the authorized standing of marijuana underneath federal regulation modifications (or until the USPTO modifications the foundations).
We sadly anticipate most of these disputes to crop up with larger frequency, and examine this as a severe obstacle to hashish firms successfully growing and implementing nationwide manufacturers.