Final summer season, we reported on the trademark infringement lawsuit filed by Veritas Nice Hashish (“VFC”) towards Veritas Farms here and here. In late August, I had reported Veritas Farms filed a movement to dismiss on the premise VFC doesn’t truly possess the frequent regulation federal logos it seeks to implement. Because the movement was filed, VFC filed an amended criticism, and Veritas Farms filed a second movement to dismiss, largely on the identical grounds but additionally together with arguments based mostly on the illegality doctrine (which we’ve beforehand written about here).
Sadly for VFC, Justice of the Peace Choose Michael E. Hegarty issued a really useful order that the Court docket grant Veritas Farms’ movement to dismiss – and to dismiss the trademark infringement and associated claims with prejudice (that means, VFC can’t amend or attempt to carry these claims once more). However, for the cannabis-ancillary trade, the order clarifies the illegality doctrine isn’t going to forestall all marijuana-related companies from acquiring trademark rights.
In its movement, Veritas Farms argued VFC’s enterprise and merchandise (which largely relate to offering details about hashish) are unlawful beneath federal regulation beneath the Managed Substances Act, and thus not eligible for trademark safety. VFC responded the supply of informational companies about hashish shouldn’t be unlawful and thus, they’re eligible for trademark safety.
Choose Hegarty started his evaluation by stating the usual:
A trademark qualifies for registration and its related advantages if the trademark proprietor has ‘used [the mark] in commerce’ or has a bona fide intent to take action, and courts have lengthy held that the commerce should be ‘lawful’ for it to fulfill the “use in commerce’ requirement. (Citations omitted).
With respect to the usual, he agreed with Veritas Farms that federal trademark regulation can solely shield marks which are in substance authorized beneath federal regulation – and due to this fact, safety of marijuana-related items is due to this fact prohibited.
Even after passage of the 2018 Farm Invoice, ‘the USPTO [would] proceed to refuse registration when the recognized companies in an software contain hashish that meets the definition of marijuana and embody actions prohibited beneath the CSA.
Nonetheless, the settlement ends there. Choose Hegarty then regarded into the definition of marijuana beneath the Managed Substances Act:
all components of the plant Hashish sativa L., whether or not rising or not; the seeds therefor; the resin extracted from any a part of such plant; and each compound, manufacture, salt, by-product, combination, or preparation of such plant, its seeds or resin.
Utilizing that definition, he confirmed the try to trademark items or companies in reference to marijuana, its components, or any of its makes use of, are “not be permitted beneath federal regulation.” That definition was not instructive on VFC’s trademark for the supply of data companies – and in the end, Choose Hegarty dominated VFC’s sought trademark safety isn’t unlawful:
… the plaintiff [VFC] is trying to trademark not cannabis-related items and merchandise however moderately the supply of data concerning hashish and hashish merchandise. The Court docket acknowledges that this can be a grey space of regulation. Based mostly on the events’ arguments and the restricted case regulation and different authorities on the matter, the Court docket doesn’t discover that the supply of data, on this context, is prohibited. In different phrases, the supply of data concerning hashish shouldn’t be unlawful beneath federal regulation, so it’s eligible for trademark safety.
This really useful order is a optimistic signal for the trade as an entire, and it alerts a rising consciousness of the courts that this kind of “grey space of regulation” must be proactively clarified – many times.