Final summer season, we reported on the trademark infringement lawsuit filed by Veritas High quality Hashish (“VFC”) in opposition to Veritas Farms here and here. In late August, I had reported Veritas Farms filed a movement to dismiss on the premise VFC doesn’t really possess the widespread legislation federal emblems 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 Decide Michael E. Hegarty issued a really useful order that the Courtroom grant Veritas Farms’ movement to dismiss – and to dismiss the trademark infringement and associated claims with prejudice (which means, VFC can not amend or attempt to convey these claims once more). However, for the cannabis-ancillary business, the order clarifies the illegality doctrine isn’t going to stop 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 below federal legislation below the Managed Substances Act, and thus not eligible for trademark safety. VFC responded the availability of informational companies about hashish just isn’t unlawful and thus, they’re eligible for trademark safety.
Decide 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 have to 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 legislation can solely shield marks which are in substance authorized below federal legislation – and subsequently, safety of marijuana-related items is subsequently prohibited.
Even after passage of the 2018 Farm Invoice, ‘the USPTO [would] proceed to refuse registration when the recognized companies in an utility contain hashish that meets the definition of marijuana and embody actions prohibited below the CSA.
Nonetheless, the settlement ends there. Decide Hegarty then regarded into the definition of marijuana below 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 below federal legislation.” That definition was not instructive on VFC’s trademark for the availability of knowledge companies – and finally, Decide Hegarty dominated VFC’s sought trademark safety isn’t unlawful:
… the plaintiff [VFC] is trying to trademark not cannabis-related items and merchandise however slightly the availability of knowledge concerning hashish and hashish merchandise. The Courtroom acknowledges that it is a grey space of legislation. Based mostly on the events’ arguments and the restricted case legislation and different authorities on the matter, the Courtroom doesn’t discover that the availability of knowledge, on this context, is prohibited. In different phrases, the availability of knowledge concerning hashish just isn’t unlawful below federal legislation, so it’s eligible for trademark safety.
This really useful order is a optimistic signal for the business as an entire, and it alerts a rising consciousness of the courts that such a “grey space of legislation” must be proactively clarified – many times.