What was once illegal is now a thriving industry. That’s right—I’m talking about cannabis. But my initial statement isn’t entirely accurate. Although Alaska, California, Colorado, Illinois, Maine, Massachusetts, Michigan, Nevada, Oregon, Vermont, and Washington have legalized cannabis, the drug remains a Schedule I narcotic under the federal Controlled Substances Act. While buying, selling, and using cannabis is legal under state law in certain jurisdictions, such conduct is arguably a federal crime in every jurisdiction due to the Controlled Substances Act. It’s a lot to take in, and it gives rise to numerous issues and questions concerning our government’s federalist system. But you all know this blog focuses on intellectual property, so by now I’m sure you’re wondering: what’s the significance to intellectual property of the dichotomy between the way federal and certain state law treats cannabis? Well, to oversimplify the problem, it means that businesses in the cannabis industry are without federal intellectual-property rights, which are by far the most powerful and expansive intellectual-property rights in the country.
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Lanham Act
Navigating the Hazy Intersection of Federal and State Law on Cannibis and Advising Clients on Protecting Their Trademarks
What was once illegal is now a thriving industry. That’s right—I’m talking about cannabis. But my initial statement isn’t entirely accurate. Although Alaska, California, Colorado, Illinois, Maine, Massachusetts, Michigan, Nevada, Oregon, Vermont, and Washington have legalized cannabis, the drug remains a Schedule I narcotic under the federal Controlled Substances Act. While buying, selling, and using cannabis is legal under state law in certain jurisdictions, such conduct is arguably a federal crime in every jurisdiction due to the Controlled Substances Act. It’s a lot to take in, and it gives rise to numerous issues and questions concerning our government’s federalist system. But you all know this blog focuses on intellectual property, so by now I’m sure you’re wondering: what’s the significance to intellectual property of the dichotomy between the way federal and certain state law treats cannabis? Well, to oversimplify the problem, it means that businesses in the cannabis industry are without federal intellectual-property rights, which are by far the most powerful and expansive intellectual-property rights in the country.
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The Ninth Circuit Affirms Ruling that COMIC-CON isn’t Generic for Comic Conventions
The battle started almost six years ago. A Utah-based company known as Dan Farr Productions (“DFP”) decided to use San Diego Comic Convention’s (“SDCC”) registered trademark COMIC-CON in conjunction with its own comic and popular arts convention, resulting in SDCC filing suit in the Southern District of California. SDCC alleged in its complaint that it has the exclusive right to utilize its COMIC-CON trademarks and has done so in connection with its comic convention since 1970.
After years of litigation, which was apparently filled with gamesmanship on the part of DFP and its counsel, SDCC prevailed on a motion for summary judgment. DFP met SDCC’s claim for infringement with an affirmative defense that SDCC’s marks were “generic ab initio.” In other words, DFP argued that COMIC-CON was generic before SDCC’s first use. The district court disagreed, finding that the evidence tendered by DFP was insufficient to support the argument that COMIC-CON was generic before SDCC’s first use. The Ninth Circuit reviewed this decision de novo and found that the district court properly granted summary judgment in favor of SDCC.
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SCOTUS Considers Whether Adding a Top-Level Domain Makes a Generic Term a Protectable Trademark
On Monday, May 4, 2020, the Supreme Court of the United States heard oral argument in United States Patent and Trademark Office v. Booking.com, B.V. For the first time in the history of the Court, the argument was live streamed via multiple outlets, including CNN, enabling us trademark junkies to listen to the argument in real time. Although it was surely an unfamiliar circumstance for the Court and its litigants, the hearing was mostly without issue. Returning to the case at issue, in USPTO v. Booking.com, the Court addressed whether a business can create a registrable trademark by adding a generic top-level domain name like “.com” to an otherwise unprotectable generic term. Specifically, the Supreme Court addressed whether BOOKING.COM is entitled to trademark registration.
The dispute arose in 2012 when Booking.com sought to register BOOKING.COM as a service mark for its online reservation services. The USPTO’s examining attorney determined that “booking” is generic for hotel reservation services, relying upon dictionary definitions of “booking” and “.com” and the use of “booking” by various other third parties who offer similar services. The examining attorney ultimately refused registration arguing that combining a generic term like “booking” with “.com” simply communicates to consumers that the business offers its services online.
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Trademark Infringers Beware – Willfulness Not Required for Disgorgement
For some time there has been a split among the Federal circuits as to whether evidence of willfulness is required in order to award disgorgement of profits for trademark infringement under Section 1125(a) of the Lanham Act. The split stems from how each Federal circuit interprets Section 1117(a) of the Lanham Act which was amended in 1999. The section reads as follows:
When a violation of any right of the registrant of a mark registered in the Patent and Trademark Office, a violation under section 1125(a) or (d) of this title, or a willful violation under section 1125(c) of this title, shall have been established in any civil action arising under this chapter, the plaintiff shall be entitled . . . subject to the principles of equity, to recover (1) defendant’s profits . . .
A number of Federal Circuits, including the Second and the Ninth, have interpreted the above to require a showing of willfulness for disgorgement in Section 1125(a) cases. Six Federal Circuits do not. On April 23, 2020 the United States Supreme Court made clear where it stands.
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