Last 12 months, I wrote about an uptick in trademark litigation between hashish firms. This sort of litigation differs from a lot of the cannabis-related trademark litigation we’d seen to this point, the place non-cannabis firms with established manufacturers have sued hashish firms for trademark infringement.
In specific, I highlighted the litigation between Harvest Dispensaries Cultivation & Production Facilities, 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 identify 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 Consumer Fraud Act and unjust enrichment. In its criticism, Harvest of Arizona, which was established in 2011 and commenced utilizing the HARVEST mark in 2012, claimed to personal retail dispensaries and cultivation/manufacturing services 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 emblems for the HARVEST identify, sued Harvest of Arizona in California Superior Court for trademark infringement and unfair competitors in California. Harvest of California observed in its criticism that it is a easy case of trademark infringement however that as a result of the events are within the hashish trade, solely state regulation applies. Federal trademark regulation will not be relevant.
This dispute ended up settling, however earlier this 12 months, 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 in Arkansas, and Harvest of Arizona misplaced.
In the Arkansas case, Harvest Cannabis Dispensary (“Harvest of Arkansas”), a small, locally-owned enterprise working in Conway, Arkansas, gained a preliminary injunction prohibiting two services, 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” identify in September 2017 because it was in search of licensure from the state. And though Harvest of Arizona had used the “Harvest” identify previous to that date, it had not completed so in Arkansas, giving Harvest of Arkansas precedence rights within the mark throughout the state of Arkansas.
This case highlights one of many largest challenges confronted by hashish firms – the shortcoming 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 selected geographic space and start utilizing the mark first.
In the U.S., frequent 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 frequent 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.
While there are methods these firms can and needs to be utilizing to guard their trademark and IP rights to the best extent attainable (that is one thing I spend an excessive amount of time advising my shoppers on), there may be and can be no good resolution till the authorized standing of marijuana below federal regulation modifications (or until the USPTO modifications the principles).
We sadly anticipate a majority of these disputes to crop up with better frequency, and look at this as a severe obstacle to hashish firms successfully growing and implementing nationwide manufacturers.