I’ve written extensively about trademark litigation matters involving cannabis brands, but up till now, the trend in these lawsuits has been properly-identified non- cannabis businesses suing cannabis businesses. To study extra about these circumstances, see the following posts:
But a new variety of cannabis trademark litigation is beginning to crop up, with cannabis businesses suing every single other for trademark infringement. This variety of litigation will be really illuminating simply because till now, several theories upon which cannabis enterprises have relied to obtain trademark protection have not been formally tested. We do not however know how courts will treat the purported trademark rights owned by cannabis enterprises, but the ongoing litigation in between Harvest Dispensaries Cultivation & Production Facilities, LLC, primarily based out of Arizona (I’ll refer to them as “Harvest of Arizona”), and Harvest on Geary, Inc. / Harvest Off Mission, Inc., primarily based right here in San Francisco (I’ll refer to them as “Harvest of California”), could give us with some guiding case law.
The lawsuit has various facets, but to summarize, in 2017 Harvest of Arizona sued Harvest of California in Arizona alleging that Harvest of California stole the HARVEST name and logo. This lawsuit alleged trademark infringement, intentional interference with contract and with organization relations, conversion, unfair competitors and misappropriation of trade secrets, fraud, violation of Arizona’s Racketeering Act, violation of Arizona’s Customer Fraud Act and unjust enrichment. In its complaint, Harvest of Arizona, which was established in 2011 and started working with the HARVEST mark in 2012, claimed to personal retail dispensaries and cultivation/production facilities in Arizona, Nevada, Illinois, Maryland, California, Massachusetts, Michigan, and Florida. It had no presence in California.
Rapidly forward to 2018, when Harvest of Arizona announced its plans to expand into California. At this point, Harvest of California, which owns California state trademarks for the HARVEST name, sued Harvest of Arizona in California Superior Court for trademark infringement and unfair competitors in California. Harvest of California notes in its complaint that this is a straightforward case of trademark infringement but that simply because the parties are in the cannabis sector, only state law applies. Federal trademark law is not applicable.
These circumstances are illustrative of just how complicated the situation of trademark protection in the cannabis sector genuinely is. The reality that cannabis is regulated on a state-by-state basis, with operators legally unable to location their cannabis goods into the stream of interstate commerce, creates what I like to believe of as “silos” of trademark protection. Cannabis enterprises can only receive trademark protection for their cannabis goods and solutions in the states in which they legally operate. So, in theory, it is attainable for a corporation to have lawful rights to a trademark in one particular state, but infringe on a further party’s mark by moving their brand into a further state.
And that could extremely properly turn out to be the case for the two Harvest entities. Even though Harvest of Arizona allegedly applied the HARVEST mark very first, they only applied the mark in Arizona, and maybe a couple of other states, but not California. Harvest of California claims to have created very first use of the HARVEST mark for cannabis retail solutions in California, and priority for trademark rights depends on a party’s date of very first use in the state in which they are claiming these rights.
It is also crucial to accurately state your date of very first use on your trademark filing, so as not to raise allegations that your trademark was obtained improperly. It is important to recognize your state’s trademark law as properly as the needs for trademark protection so that your state trademark registration is truly worth anything. Ordinarily, state trademark applications do not undergo a excellent deal of scrutiny and it is prevalent for trademark registrations to situation improperly. These registrations will not stand up in litigation.
For some more reading on the subject of how to decide on an enforceable brand that will not get you sued, see the following: