Almost precisely a yr in the past, I wrote about the uptick in hashish enterprise suing each other for trademark infringement (versus non-cannabis firms suing hashish firms, which occurs quite a bit and which you’ll examine right here, right here, and right here). The instance at hand was the litigation between Harvest Dispensaries Cultivation & Production Facilities, LLC, primarily based out of Arizona, and Harvest on Geary, Inc. / Harvest Off Mission, Inc., primarily based right here in San Francisco.

While that case ended up settling, the HARVEST mark has as soon as once more develop into a degree of competition, this time in Arkansas. Harvest Cannabis Dispensary (I’ll discuss with them as “Harvest of Arkansas”) is a small, family-owned hashish enterprise in the metropolis of Conway, Arkansas. Harvest of Arkansas filed a lawsuit in opposition to Natural State Wellness Dispensary and Natural State Enterprises, that are associates of Arizona-based multi-state operator (“MSO”) Harvest Health. The two entities run a dispensary in Little Rock and a cultivation facility in Newport. In late May, Harvest of Arkansas announced that it had obtained a preliminary injunction in opposition to the Arizona firm’s subsidiaries (the “NSW Entities”), stopping the NSW Entities from continued use of the identify HARVEST in conjunction with their dispensary in Little Rock and the cultivation facility in Newport.

Harvest of Arkansas adopted the HARVEST mark in 2017 and opened its Conway facility nicely earlier than the NSW Entities opened their amenities, giving Harvest of Arkansas superior state-law trademark rights in the HARVEST mark.

The NSW Entities have been unsuccessful in arguing that they possessed trademark rights below federal legislation, which is unsurprising, on condition that we’ve written extensively about the limitations of federal trademark safety for hashish companies. But it is uncommon for a small native operator to have the ability to combat for its trademark rights in opposition to a a lot bigger, multi-state operator. While the case could also be uncommon for that motive, it sheds gentle on the ongoing points that hashish companies face in defending their manufacturers.

This problem is notably salient for MSOs, that are pressured to depend on 1) federal trademark rights for ancillary items and providers that don’t instantly defend their hashish items and providers, and a pair of) a patchwork portfolio of state trademark rights that have to be meticulously maintained as the operator enters new markets. Most states have a “use in commerce” requirement for acquiring state trademark safety. In most circumstances, meaning a “lawful use in commerce” requirement, which prevents MSOs from merely submitting to guard their mark in all 50 states in lieu of acquiring a federal trademark. Cannabis companies should apply for state trademark rights as soon as their mark is already in use in that specific state’s commerce, which leaves the door open for different operators to ascertain earlier use of the mark.

This will inevitably be an ongoing problem for MSO hashish companies which might be looking for to construct nationwide model recognition, and it’s but one more reason why it is so essential that we develop an answer to the prohibition on acquiring federal trademark safety for hashish. Allowing operators in totally different states to undertake and develop the similar model will inevitably result in client confusion, which is no good for companies, and no good for shoppers both.

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