Cannabis Industry Lawyering: Federal Law and State Law Divide: - - PowerPoint PPT Presentation

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Cannabis Industry Lawyering: Federal Law and State Law Divide: Intellectual Property Rights

Shabnam Malek Amanda Conley Brand & Branch LLP

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Why is an IP attorney here?

Addressing these issues (not necessarily in this order):

• 1. How we advise clients in light of the federal and state

law divide.

• 2. What are we even protecting? (In other words, what

are the products and brands.)

• 3. Recent developments in case law: is the outlook

hopeful or bleak?

• 4. NCBA

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It’s gonna be HUGE…

“The size of the market for legal marijuana in the United States is projected to grow to $7.1 billion in 2016, according to a report by New Frontier and ArcView Market Research. That represents 26% growth over the previous year, driven largely by adult recreational sales of marijuana, the researchers found.”

Forbes.com

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What exactly are we talking about?

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What else are we talking about?

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Many strong and distinctive brands

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Distinctive Cannabis Brands Cannabis Brands in Crowded Fields

And some not so much

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IP Protection & Enforcement in the Cannabis Industry

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Federal Law & Cannabis IP

Controlled Substances Act (CSA) 21 U.S.C. §801, et seq.

• Prohibits manufacturing, distributing, dispensing, or

possessing certain controlled substances, including cannabis and cannabis-based preparations

• Unlawful to sell, offer to sell, or use any facility of

interstate commerce to transport drug paraphernalia The USPTO is a federal agency

• Refusals cite CSA – not 15 U.S.C. §1052(a)

(scandalous/immoral)

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Protecting marks used by companies that “touch the plant”

• No registration at USPTO if goods are unlawful
• Lawful use in commerce necessary
• Look for federally lawful goods and services

How we’re doing things now

• Common law rights protect core goods

and services

• Federal registration builds and boosts

portfolio

• State registration sometimes warranted
• State-by-state expansion through licensing

(now is it interstate commerce??)

• Disputes still an issue (state court, ADR)

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The blanket of federal registration

• Federal registration builds and boosts portfolio
• State registration sometimes warranted
• Common law rights protect core goods and

services

• Disputes still an issue (state court, ADR)

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And the federal registration goes to…

• LEAFLY: software
• WEEDMAPS: online forums
• BHANG: products infused with “FDA approved

ingredients”; apparel

• VAPEXHALE: electric aromatherapy vaporizers
• CANNABRAND: marketing services
• MARLEY NATURAL: chocolate, smoking

accessories, cosmetics

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Going from one state to another

Licensing: granting a third party the right to use your property (trademarks, inventions, trade secrets

• r
• ther

materials)

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In re Morgan Brown, 119 USPQ2d 1350 (TTAB [July 14] 2016):

• Application to register HERBAL ACCESS included Class 035 services, “retail

store services featuring herbs.”

• Use of mark must be in “lawful commerce”; application refused
• Applicant’s retail store sold marijuana
• Problematic language: “The mere fact that lawful use is also contemplated by

the identification does not aid Applicant’s cause.”

Recent TTAB Case Law

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In re JJ206, LLC, dba JuJu Joints, 120 USPQ2d 1568 (TTAB [Oct. 27] 2016):

• Applications to register POWERED BY JUJU and JUJU JOINTS included Class 034

goods, “smokeless marijuana or cannabis vaporizer apparatus, namely, oral vaporizers for smokers; vaporizing marijuana or cannabis delivery device, namely, oral vaporizers for smoking purposes.”

• Use of mark must be in “lawful commerce”; application refused
• Applicant “explicitly identified its goods as vaporizing devices for cannabis or

marijuana.”

• Quoted In re Brown in rejecting this argument: “the fact that the provision of

a product or service may be lawful within a state is irrelevant to the question

• f federal registration when it is unlawful under federal law.”
• Other policy arguments set forth and all rejected.

Recent TTAB Case Law

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In re Ultra Trimmer, L.L.C., Serial No. 86479070 (November 29, 2016) (not precedential)

• Application to register ULTRA TRIMMER included Class 007 goods,

“agricultural machines, namely, a trimming machine for trimming leaves, plants, flowers and buds,” in International Class 7.”

• Use of mark must be in “lawful commerce”; application refused as unlawful

paraphernalia.

• Yikes! Promotional material establishes primary purpose of the trimmer

machines as being for cannabis.

• “Applicant’s trimming machine thus falls squarely within the plain language of

the definition of ‘drug paraphernalia’ in § 863 as ‘equipment . . . which is primarily intended or designed for use in . . . processing, [or] preparing . . . [marijuana].’”

• Exemption: “any person authorized by local, State, or Federal law to

manufacture, possess, or distribute such items . . .”-- doesn’t apply.

Recent TTAB Case Law

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www.canbar.org

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Lawyers supporting lawyers

• 230 members and growing
• Representing over 30 different states
• Attorneys’ needs are being met:

v CLE (webinar and in person), roundtables, amicus briefing, networking events, publishing opportunities, ethics updates

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• Continuing Education of the Bar http://mjlawhub.ceb.com
• CannaRegs https://cannaregs.com/
• StateNet & Lexis
• Americans For Safe Access (state by state site analysis and brief bank for

leading federal and state cases)

• ArcView Market Research http://www.arcviewmarketresearch.com
• National Organization for the Reform of Marijuana Laws (NORML)

http://norml.org/laws and CalNORML (http://www.canorml.org)

• Drug Policy Alliance http://www.drugpolicy.org/reforming-marijuana-laws
• National Conference of State Legislatures

http://www.ncsl.org/research/health/state-medical-marijuana-laws.aspx

Where to find information

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• Prop. 215 (1996) Health & Safety Code 11362.5
• SB420 (2004) H&SC 11362.7-.83
• Medical Marijuana Regulation and Safety Act

(2015) affecting B&P Code, Government Code, H&S, Labor Code, Fish & Game, Water, and Revenue & Taxation

• Corporations Code (re Mutual Benefit Corps and

Consumer Coops)

Where do the California laws live?

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• National Cannabis Industry Association

http://thecannabisindustry.org/blog/

• National Cannabis Bar Association http://www.canbar.org
• Leafly https://www.leafly.com
• Cannabis Business Blog (by Garvey Schubert Barer)

http://www.cannabisbusinessblog.com

• The Weed Blog https://www.theweedblog.com
• Marijuana Business Daily http://mjbizdaily.com/ohio-

supreme-court-delivers-blow-to-states-mmj-lawyers/

• Canna Law Blog http://www.cannalawblog.com

Blogs and news sites

Questions?

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Email: trademarks@brandandbranch.com

Questions?