U.S. Cannabis Pioneers Face Chaotic Advertising Laws

Businesses preparing to market a new product nationally must follow the rules of trademark law as well as marketing and advertising claims under state and US laws when creating a trademark, advertising copy and copyright-registered packaging for the product. In cases where the product is illegal under some federal laws, but legal under some state and federal laws, marketing is complicated. This is particularly the case for cannabis and cannabidiol (CBD) products. As an example, the USPTO allows patents for cannabis inventions but prohibits registering trademarks for cannabis and cannabis products. (more…)

Canada’s Embattled Anti-Spam Law Marks End of Grace Period Despite Uncertain Future

On July 1, 2017, an important grace period terminated for Canada’s Anti-Spam Law (CASL), which initially took effect on July 1, 2014. The beginning of this month marked the end of the two-year grace period for entities to rely on “implied consent” as a basis for sending commercial electronic messages to potential customers, donors, clients or the like. Going forward, entities will need to obtain express consent from all email recipients, or expunge “stale” contacts to avoid potential violations of CASL. A private right of action against offenders that was also set to become available on July 1, 2017 has been put on hold indefinitely subject to Canadian government review. (more…)

Killing the Buzz: The “Highs” and Lows of Marijuana-Related Trademarks

KumarHeadshotThis post is the first in a series by Kumar Jayasuriya, attorney and Ober’s multi-talented Legal Research Manager.

 

May a company register a trademark connected to the use of a controlled substance, such as marijuana?

Recently, a federal court said “Yes.”  Started in 1974, the periodical magazine High Times reports on the medical and recreational use of marijuana and continues to advocate for the relaxation of state and federal drug laws.  High Times’ publisher, Trans-High Corp. (“THC”), owns the trademark HIGH TIMES for use on, among other things, “books about cannabis” and “magazines about hemp.”  In August of last year, THC filed an infringement lawsuit targeting Richard Reimers, a Washington State-licensed marijuana dispensary owner operating under the name High Time Station (“Reimers”).  In response to the suit, Reimers counterclaimed that THC’s trademarks be cancelled because THC had allegedly used them on unlawful goods not listed in the registration certificates.

Reimers’ counterclaim alleged sale of drug paraphernalia and controlled substances based on the claim that THC’s act of printing advertisements by third-party companies in its HIGH TIMES magazine violates the Controlled Substances Act.  In fact, the United States Patent and Trademark Office is expressly permitted by statute to inquire about compliance with federal laws to confirm that the trademark applicant’s use of the trademark in commerce is in fact lawful.  Use of a trademark on unlawful goods is grounds for cancellation.

However, the United States District Court for the Eastern District of Washington dismissed Reimers’ counterclaim upon a finding that a trademark registration is only vulnerable to cancellation if the goods and services listed in the registration are proven to be unlawful. None of the goods and services in the THC registrations were unlawful, said the Court, because the Controlled Substances Act expressly permits publications and advertisements “which merely advocate the use of a similar material, which advocates a position or practice, and does not attempt to propose or facilitate an actual transaction in a Schedule I controlled substance.” 21 U.S.C. 843.

The court dismissed (with prejudice) Reimer’s counterclaim for cancellation of THC’s federal registrations. This is not the last word on trademarks related to  unlawful goods.  In addition to the Reimer case in Washington State, THC has filed similar trademark infringement claims in Texas, New York and Colorado. It is just the beginning for protection of marijuana related marks.  As more and more lawful marijuana-related businesses spring up in the wake of marijuana legalization, trademark use will be only one of the many issues that presents a case of first impression to the nation’s courts.

Trans-High Corp., Inc. v. Richard Reimers, No. 2:14-CV-00279-LRS, (E.D. Wash. Jan. 12, 2015).

 

.bank is here!

On September 25, 2014, the Internet Corporation for the Assigned Names and Numbers (ICANN) granted the application of fTLD Registry Services (FRS) to operate a new Top Level Domain (TLD) exclusively for the banking industry: .bank. When general registration for the new TLD opens next year, banks and other members of the banking community will be able to operate through custom websites such as Local.bank, as opposed to the traditional LocalBank.com. To avoid the internet land rush for .bank extensions expected during the general registration window, banks with federally registered trademarks can get a 30-day head start towards TheirTrademark.bank by applying (and paying) for a spot on ICANN’s Trademark Clearinghouse registry. (more…)

FTC Seeks Your Comments on Proposed Verifiable Parental Consent under COPPA

On November 19, 2014, the Federal Trade Commission announced that it is seeking public comment on a second proposed verifiable parental consent method by AgeCheq, an online privacy protection service. The Children’s Online Privacy Protection Act (COPPA) requires children and family-friendly website operators and app developers to (1) post privacy policies and (2) notify and obtain verifiable consent from parents prior to collecting, using, or disclosing personal information from children under the age of 13.

There are considerable challenges to obtaining verifiable consent from parents in real time–particularly for use of online services by children. The rule lays out a number of acceptable methods for gaining verifiable parental consent and includes a provision allowing parties to submit new consent methods to the FTC for approval. Age Cheq’s new proposal eliminates the need for paper signatures by providing a digitally signed parental declaration authenticated by a verification code on the parent’s mobile device.

(more…)

Naturally, litigation results from unsupported advertising claims and undefined terms.

The WSJ Corporate Intelligence blog has an interesting article today that highlights the risks inherent in un-vetted advertising claims.  Apparently Proctor & Gamble took issue with “99% Natural” claim that toothpaste maker Hello Products, LLC was making with respect to its toothpastes which come in unusual flavors (for toothpaste) like pink grapefruit mint and mojito mint. Neither the FDA nor FTC have guidelines for what constitutes “natural” or “all natural” products.  In practice, the FDA takes the position that it will “not object[] to the use of the term if the food does not contain added color, artificial flavors, or synthetic substances,” but you are apparently on your own to determine what exactly is or is not a “synthetic substance.”  Because of the regulatory confusion over the meaning of “natural,” litigation over what does or does not qualify often resorts to claims sounding in state false advertising, unfair trade practices, or consumer protection statutes, or alleging common law fraud or breach of warranty.  Some clarity as to what it means to be natural that we can all agree on (or at least rely on) would be helpful from both the consumer and advertiser perspective, much like the USDA’s National Organic Program that tries to put some meaning into that word as used on food labels.  Apparently, though,  it is difficult from a food science perspective  to define a food product that is natural “because the food has probably been processed and is no longer the product of the earth,” according to the FDA.  That seems to have been part of P&G’s problem as the maker of one of the country’s leading toothpastes, Crest,  asserted that some of the Hello Product’s toothpaste’s ingredients, like fluoride, were chemically processed and thus not “natural.”

For its part, Hello Products offered to change its packaging after it had sold its existing stock but that did not satisfy P&G which filed suit and obtained an injunction to block the sale of the offending toothpaste. The upside for those of you in NYC tomorrow is that Hello Products plans to give away the 100,000 tubes it can no longer sell as free samples on the streets of Manhattan. Grab a tube (I recommend the grapefruit) and remember that FTC truth-in-advertising rules require that:

  1. advertising must be truthful and non-deceptive;
  2. advertisers have evidence to back up their claims; and
  3. advertisements are not unfair.