The debate over the strength of cannabis trademarks is about to get interesting. There is an unprecedented trademark infringement case taking place between two dispensaries, on originating in Arizona and the other in California. Before we dive into that, let’s understand more about registering a cannabis company. Although the US Patent and Trademark Office has refused to register marks for direct cannabis goods and services, cannabis companies are not without avenues to protect their brand names and logos.
One option is to register for a state trademark if your state registers marks for cannabis companies. Many states with some form of legalized cannabis sale do offer this option. Another option is to register a federal trademark for non-cannabis goods or services. For example, a dispensary that sells flower, as well as smoking accessories, could register its brand name and logo for the federally legal classification of goods — smoking accessories — and plan to expand that protection to its cannabis products once the PTO changes its policy.
As more and more companies expand into new legal markets, we’re beginning to see the relative strengths of these approaches. In an interesting recent example, Harvest on Geary, Inc. / Harvest Off Mission, Inc., located in California, sued Harvest Dispensaries Cultivation & Production Facilities, LLC, based in Arizona, in California Superior Court for trademark infringement and unfair competition. We’ll call them California Harvest and Arizona Harvest for short. Arizona Harvest began using the Harvest mark in 2012.
They ultimately owned dispensaries and cultivation/production facilities in Arizona, Nevada, Illinois, Maryland, Massachusetts, Michigan, Florida, and in 2018, in California. California Harvest opened its first dispensary in San Francisco in 2016 and registered the mark for its name with the state of California in 2018 before Arizona Harvest expanded to the state.
So Arizona Harvest has been using the brand name longer and in more states, but California Harvest used the brand name first in California and registered the mark there. This situation creates an interesting conflict for the court to resolve about which company has the rights to its name in California. The downside to state trademarks is that their protection extends only within the borders of the state in which a business is registered.
It is possible the court will rule in favor of California Harvest, holding that it has the rights to the name within California because it was the first to use the mark in the state and register it there. But Arizona Harvest still has the right to use its name in all other states where it is the first user or where it was the first business to register a state name mark. But because this is the first trademark infringement case between two cannabis brands, we cannot look to previous cases for clues as to how the court might decide. It will be interesting to see how this case comes out, and inevitable future cases arising out of similar conflicts.
As long as broad federal trademark protection remains unattainable for cannabis companies, many of them will own the rights to their name only in certain states or for certain classes of goods. And as successful companies grow and expand to new markets, we’ll see more and more of these conflicts arise. They highlight the importance of establishing the rights to your company’s brand name and quickly as possible. This is why Buddle Law offers cost-effective, DIY trademark registration packages for cannabis companies. Check us out!