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Cannabis Conundrum: No Federal Trademark Protections Without Federal Legalization

January 07, 2020

By: Tara Tedrow, Jon Gibbs & Ahmad El-Gendi

Despite the trend of state legalization of cannabis and overwhelming market attention paid to cannabis companies, owners of cannabis businesses still cannot obtain federal trademark protection for their cannabis related brands.

There has been a recent wave of decisions from the Trademark Trial and Appeal Board (TTAB) making it clear that a federal yellow light on cannabis crack downs is not a green light for establishing federal trademark rights. The following cases are illustrative of this position:

  • In re: Morgan Brown - The TTAB denied a Washington state dispensary’s attempt to trademark “Herbal Access” in connection with “retail store services featuring herbs” because was there was evidence the mark was used in connection with marijuana sales, even though such evidence was not found in the actual application.
  • In re: JuJu Joints – The TTAB rejected JuJu Joint’s attempt to register its name for cannabis vaporizers and JuJu’s claim that marijuana sales in Washington were legal for federal trademark registration purposes because of the Cole Memo, a 2013 Department of Justice brief providing discretionary guidelines for federal enforcement of marijuana laws (which memo has since been rescinded and replaced by the 2018 Sessions Memo). The TTAB ruled that use in connection with cannabis is not lawful under federal law and therefore cannot form the basis for “use in commerce.” Because lawful use is necessary for the extension of federal trademark protection, no protection was allowed.
  • Kiva Health Brands Inc. v. Kiva Brands Inc. – Kiva Brands Inc., a cannabis edibles company, asserted a defense of prior use against a trademark infringement suit by Kiva Health, a natural food company. However, Kiva Brands’ argument was rejected by a federal judge in California because Kiva Brands’ cannabis related use was (and is) illegal under federal law. As such, cannabis-related use cannot be used to establish senior-use trademark rights.    

Other opinions include In re: PharmaCann LLC, where the TTAB rejected an argument that a recurring rider on budget legislation softening DOJ enforcement on implementation of medical marijuana laws was sufficient to create federal trademark rights absent actual legislation. And, last but not least, in Woodstock Ventures LC et al. v. Woodstock Roots, LLC, a federal judge ruled that Woodstock Roots could not enforce trademark rights against Woodstock Ventures LC for its sale of marijuana products even though Woodstock Roots had a registration for “smoker’s articles” because, in the process of obtaining its registration, Woodstock Roots affirmatively represented that the articles would not be used to smoke marijuana.

The clash between cannabis-related rights being increasingly granted by states and the continued federal prohibition of such rights, including trademark rights, can put business owners in a bind. Do you continue pouring money into a brand that you cannot protect on a federal level? The best answer for now may be to continue developing common law rights through sales, seek state-level registrations in those states wherein cannabis is legal, and federally registering a brand for non-cannabis, but related goods, but avoiding any affirmative representation that such goods will not be used for any particular purpose. Although it may not be good enough to assert a case of federal trademark infringement today, the combination of the earliest common law rights for cannabis products, state registrations, and federal registrations of marks in connection with products whose zone of natural expansion would encompass cannabis goods may just be the best foundation for the acquisition and enforcement of future trademark rights.

Ahmad

Ahmad is a connector and a problem solver. He listens carefully to understand his clients’ needs and thinks creatively to provide legal services that address the issues at hand, including issues that clients may not have anticipated. Ahmad focuses on intellectual property and commercial litigation, and also has experience with real estate matters. His diverse education in neurobiology and legal jurisprudence allows him to understand complex concepts quickly and streamline large amounts of information into concise, precise summations. Ahmad treats every client’s matter with the same care he would take in addressing his own personal matters, including avoiding needless expenses. With the large Lowndes team behind him, Ahmad has enjoyed plentiful success, including reaching highly favorable resolutions for clients such as obtaining a payment of approximately $400,000, which was 95% of the initial demand, without having to proceed to prepare for and engage in a costly final arbitration hearing.

Ahmad’s litigation experience in federal and state courts includes the following: IP Litigation (patents, trademarks, and copyrights), franchise and license disputes, privacy issues, international and out of state judgment domestications, fraudulent concealment and misrepresentation, personal injury, property disputes, breach of fiduciary duty, and corporate disputes. In addition, Ahmad has experience working with significant corporate clients on multifaceted transactions with capital exceeding one hundred million dollars at stake. His transactional experience also includes: contract analysis, drafting and negotiation (vendor agreements, settlement agreements, leases, easements, and license agreements), the sale of a business, and patent drafting (with a licensed agent).

Ahmad focuses on providing a calm voice of reason in the midst of escalated disputes, but does not shy away from vigorously pursuing his client’s rights through the end of any dispute. He leaves no stone unturned. Ahmad is highly attentive and responsive to his clients’ needs and looks forward to representing you.

Tara

Tara is a shareholder in the firm’s Real Estate Transactions, Development, Land Use, Zoning & Environmental practices. Tara’s practice focuses on land use and development, as she assists clients statewide on entitling projects for commercial, residential, industrial, office, and mixed uses. Tara works with local governments and other regulatory authorities in order to address the needs of her clients related to environmental permitting and compliance, zoning, comprehensive plans, concurrency, site plan approval, variance and waiver requests, due diligence, and property rights. Additionally, Tara is the Chair of the Cannabis and Controlled Substances Group, where Tara assists clients in complex regulated industries such as alcoholic beverage, hemp and marijuana licensing. On the alcoholic beverage side, Tara offers additional value to clients throughout Florida in the hospitality, restaurant and entertainment industries through her experience with alcoholic beverage licensure and Florida’s alcoholic beverage laws. On the cannabis side, Tara works with physicians, lenders, real estate developers, landlords, ancillary service providers, licensed Medical Marijuana Treatment Centers, cultivators, processors, retailers and license applicants, helping them to navigate the ever changing regulatory landscape of marijuana and hemp regulations. Tara is a regular presenter and speaker at industry seminars and conferences. As of the fall of 2018, Tara was the first professor in the state of Florida to teach a law school course on marijuana law and policy at the University of Florida Levin College of Law. Tara also assists clients in the national hemp industry in obtaining licensing and approvals for processing, retailing, cultivation and other forms of secondary byproduct monetization. She is the only person in the state to be appointed by the Florida Department of Agriculture and Consumer Services to both the inaugural Industrial Hemp Advisory Council created under Senate Bill 1020 and to the state’s Hemp Advisory Committee, which she Chairs.

Prior to joining the firm, Tara worked as a legal extern for the University of Florida General Counsel and Office of the Vice President as well as for the Orlando Juvenile Public Defenders Office. For over a decade, Tara has also worked professionally as a private speech and debate coach and taught at multiple national debate institutes, including the National Debate Forum at Emerson University, the National Symposium for Debate at Grinnell College and Victory Briefs Institute at UCLA.

Tara Tedrow is a contributing writer at the Orlando Sentinel and has spoken about various real estate topics on Fox News.

Jon

Jon Gibbs is the Chair of Lowndes’ Intellectual Property Services Group and represents clients in a broad spectrum of intellectual property matters including intellectual property protection, licensing, litigation, auditing, and due diligence. Jon counsels clients on brand management strategies, selection and clearance of trademarks and service marks, policing and enforcement issues and securing rights in proprietary discoveries and works through patent, copyright, and trade secret protection.

Jon conducts due diligence investigations in connection with intellectual property transactions, negotiates and drafts intellectual property transfer and license agreements, and documents co-existence agreements.

Jon has litigated and defended matters involving claims of trademark infringement, trademark dilution, unfair competition, trade dress infringement, false advertising, copyright infringement, cybersquatting, patent infringement, and trade secret misappropriation. He has handled numerous matters before the Trademark Trial and Appeal Board in addition to litigating domain name disputes under the UDRP.

Jon is also a general aviation pilot and a United States Coast Guard licensed Captain.

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