Blazing a Trail or Going Up in Smoke? BBK v. CCA and the Evolving Trademark Terrain for Cannabis Companies
On April 1, 2024, the 9th Circuit Court of Appeals issued an opinion in BBK Tobacco & Foods LLP v. Central Coast Agriculture, Inc., a case that has broad implications for trademark law and cannabis operators specifically. BBK, known for its “RAW” brand of smoking-related products, sued CCA for using “Raw Garden” on its cannabis products, alleging trademark infringement. The Arizona District Court was tasked with determining if CCA’s use infringed on BBK’s trademark and whether CCA had a bona fide intent to use its mark in commerce.
The District Court dismissed BBK’s false advertising claim and granted summary judgment in favor of CCA on BBK’s trademark claims, but also granted summary judgment in favor of BBK on its counterclaim to invalidate several of CCA’s trademark applications and on CCA’s counterclaim to cancel BBK’s trademark applications for unlawful use.
The ruling emphasized the importance of proving a genuine intent for trademark use, influencing both trademark application strategy and enforcement within the cannabis industry and beyond. Given the intricacies of federal law, specifically the Controlled Substances Act, cannabis businesses encounter formidable barriers when attempting to utilize an “intent to use” application for trademarks covering cannabis and cannabis-derived products, primarily due to the necessity of demonstrating lawful use in interstate commerce, which is not possible presently.
BBK also offers significant insights into the application of the bona fide intent requirement of trademark law. The Court’s decision to invalidate some of CCA’s trademark applications for lacking a bona fide intent to use the mark in commerce serves as a crucial reminder for businesses and trademark professionals. It stresses the need for comprehensive planning and documentation when filing trademark applications. This case sets a precedent, signaling that mere intent without substantive evidence of plans to use the mark in commerce may not withstand legal scrutiny. This is especially important to cannabis businesses that cannot show lawful interstate commerce now but do plan to engage in interstate commerce when possible. Rescheduling, which could occur this year, would presumably allow for some type of lawful interstate commerce, which could address this issue. For the trademark industry, this underscores the evolving dynamics of trademark application and defense strategies, especially in sectors facing unique regulatory challenges.
This case also illuminates the expanding authority of district courts in trademark disputes, traditionally the domain of the Trademark Trial and Appeal Board (TTAB). This development indicates a shift where courts don’t solely rely on the TTAB for determinations regarding the validity of trademarks based on bona fide intent to use. This case serves as a pivotal example, demonstrating that district courts are equipped and willing to invalidate trademarks if the applicant cannot demonstrate a concrete intent to use the mark in commerce.
Holon Law Partners has 100+ years of experience combined guiding clients through complex cases and legal intricacies. Our approach is empathetic, customized, and client-centered with a focus on you and your unique business needs. To schedule a consultation with us, call our team at (866) 372-0726 or email us at: info@holonlaw.com.
