The United States Court of Appeals for the Ninth Circuit recently shed light on the legal status of the hemp-derived cannabinoid known as delta-8 tetrahydrocannabinol (“delta-8 THC”) and its implications for owners. of cannabis brands. Delta-8 THC is a psychoactive compound usually made from hemp-derived cannabidiol. The compound has a similar effect to delta-9 THC, the primary psychoactive agent in marijuana, although delta-8 is found in the Cannabis sativa plant, which encompasses both hemp and marijuana. In 2018, the Farm Act legalized both the cultivation and possession of hemp; the only legal measure to distinguish controlled marijuana from legal hemp is the concentration level of delta-9 THC.
In AK Futures LLC v. Boyd Street Distro, LLC, the Court has ruled that AK Futures’ possession and sale of delta-8 THC products is permitted under federal law, which means its trademark used in connection with such products may be entitled to federal trademark protection.
AK Futures LLC vs. Boyd Street Distro, LLC
Plaintiff AK Futures LLC produces and distributes e-cigarette and vaping products, including delta-8 THC products, marketed under its “Cake” brand. In the lawsuit, which alleged trademark and copyright infringement, the District Court for the Central District of California granted AK Futures’ motion for a preliminary injunction restraining defendant Boyd Street Distro, a retailer of smoking of Los Angeles, to sell allegedly counterfeit e-cigarettes and vaping products containing delta-8 THC and bearing the AK Futures’ Cake trademark and copyrighted logo. The district court determined that AK Futures had implicitly met the standard of ownership of a valid trademark and found that it was likely to succeed on both its trademark and copyright infringement claims.
Boyd Street appealed the district court’s ruling that AK Futures’ delta-8 THC products were lawful under federal law. The United States Court of Appeals for the Ninth Circuit upheld the district court’s ruling that AK Futures’ delta-8 THC products are lawful under the “clear and unambiguous” language of the Farm Act and can benefit from trademark protection.
Observing that the relevant portion of the Farm Act removes “hemp” from the definition of marijuana in the Controlled Substances Act, the Court noted that the concentration level of delta-9 THC was the only legal measure to distinguish marijuana from hemp and that the terms “derivative, extract or cannabinoid” were considerably broad. The Court found that the delta-8 THC contained in AK Futures’ e-cigarette liquid fully met the legal definition of “hemp”, defined to encompass product types that contain no more than 0.3% delta-9 THC on a dry weight basis. base. Since AK Futures’ products meet this standard, they are lawful and their sale may give rise to federal trademark protection and priority in this case.
This decision certainly suggests a path towards the protection of cannabis brands. However, even if the United States Patent and Trademark Office (“USPTO”) chooses to grant applications covering products containing delta-8 THC, it could still deny those same applications based on other reasons, such as the Food and Drug Administration’s refusal to approve edible cannabis products.
The Ninth Circuit’s ruling provides clarity on the way forward for brand protection and could signal a new frontier for cannabis businesses. Cannabis brands, which have long fought for federal trademark protection because the Lanham Act only extends that protection to products that legally exist in U.S. commerce, are entitled to many of the same protections enjoyed by cannabis products. and more “traditional” brands. Products containing legal cannabinoids, such as delta-8 THC, are eligible for federal trademark protection.
If adopted by the USPTO, this ruling could provide cannabis brands with increased protection not otherwise available for products containing more than 0.3% delta-9 THC, as prohibited by the Act. controlled substances. However, traditional cannabis products containing delta-9 THC remain illegal under federal law and do not qualify for federal trademark protection.
©2022 Norris McLaughlin PA, All Rights ReservedNational Law Review, Volume XII, Number 161