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

Cannabis Industry Lawyering: Federal Law and State Law Divide: Intellectual Property Rights Shabnam Malek Amanda Conley Brand & Branch LLP www.brandandbranch.com #brandandbranch

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 www.brandandbranch.com #brandandbranch

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 www.brandandbranch.com #brandandbranch

What exactly are we talking about? #brandandbranch

What else are we talking about? #brandandbranch

Many strong and distinctive brands www.brandandbranch.com #brandandbranch

Distinctive Cannabis Brands Cannabis Brands in Crowded Fields

And some not so much www.brandandbranch.com #brandandbranch

IP Protection & Enforcement in the Cannabis Industry www.brandandbranch.com #brandandbranch

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)

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 • www.brandandbranch.com #brandandbranch

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) •

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) • www.brandandbranch.com #brandandbranch

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 www.brandandbranch.com #brandandbranch

Going from one state to another Licensing: granting a third party the right to use your property (trademarks, inventions, trade secrets or other materials) www.brandandbranch.com #brandandbranch

Recent TTAB Case Law 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.” www.brandandbranch.com #brandandbranch

Recent TTAB Case Law 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 of federal registration when it is unlawful under federal law.” Other policy arguments set forth and all rejected. • www.brandandbranch.com #brandandbranch

Recent TTAB Case Law 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. www.brandandbranch.com #brandandbranch

www.canbar.org www.brandandbranch.com #brandandbranch

Lawyers supporting lawyers 230 members and growing • Representing over 30 different states • Attorneys’ needs are being met: • CLE (webinar and in person), roundtables, amicus briefing, v networking events, publishing opportunities, ethics updates www.brandandbranch.com #brandandbranch

Where to find information 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 www.brandandbranch.com #brandandbranch

Where do the California laws live? 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) www.brandandbranch.com #brandandbranch

Blogs and news sites 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 • www.brandandbranch.com #brandandbranch

Questions? Questions ? Email: trademarks@brandandbranch.com www.brandandbranch.com #brandandbranch