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June 2019

Gordon & Rees California Cannabis Team Secures Settlement and Dismissal in High Profile Trademark/Unfair Business Matter Spanning Three Jurisdictions

In a case with far-reaching implications in the evolving cannabis market, Gordon Rees Scully Mansukhani's California cannabis team led by Doug Smurr and Kevin Liu played a crucial role in settling intellectual property litigation spanning two states and before the federal Trademark Trial and Appeal Board. 

The firm's client Harvest Health and Recreation, Inc. (Harvest), fully recuperated its name and logo that had been misappropriated by a copycat entity in California. Harvest had used the trademark, name, and logo years before its competitor opened stores with an identical name and similar logo in California. In fact, the competitor first visited Harvest’s cannabis headquarters and then returned to San Francisco to set up two copycat cannabis dispensaries, filing trademark applications in California, and claiming ownership of the trademarks in California. Due to the unlawful usurpation of the trademark, name, and logo, lawsuits were filed by the competing cannabis companies in state courts in Arizona and California, and a cancellation proceeding was filed in the USPTO’s Trademark Trial and Appeal Board

Typically, trademark disputes involving a cannabis company are filed by an entity outside the cannabis industry who claims a cannabis company is infringing their trademark rights. In contrast, these disputes were newsworthy as the first disputes involving two competing cannabis entities claiming superior rights to trademarks in different states, with one industry attorney recognizing that “two companies battling trademark issues out in court is a new development in the cannabis industry.” One article recognized these cases as “illustrative of just how complex the issue of trademark protection in the cannabis industry really is.”  

The complex issues involving cannabis-related trademarks are likely to continue with any changes to federal law and the USPTO’s recent publication regarding the “Examination of Marks for Cannabis and Cannabis-Related Goods and Services after Enactment of the 2018 Farm Bill,” which provides some guidance for how the USPTO will handle trademark applications involving certain types of cannabis products.

As a resolution of these disputes on behalf of Gordon & Rees’ cannabis client Harvest, the copycat entities are required to stop using the trademarks, name, and logo worldwide and will transfer their improperly obtained California trademarks to Harvest.  Importantly, Harvest did not pay any money to fully resolve these three lawsuits.

Kevin Liu
Douglas Smurr