A recent federal appeals court decision has shed light on the legal status of delta-8 tetrahydrocannabinol (“delta-8 THC”) and its implications for cannabis brand owners. The United States Court of Appeals for the Ninth Circuit held that delta-8 THC falls squarely within the definition of “hemp” under the 2018 Farm Act, and is therefore lawful, despite its psychoactive properties. Cannabis brands have long struggled to obtain adequate federal trademark protection because the Lanham Act only extends trademark protection to goods that are lawfully in U.S. commerce. The Court’s decision potentially clears a new path for cannabis brand owners to obtain federal trademark protection.
In AK Futures LLC V. Boyd Street Distro, LLC, the Ninth Circuit affirmed the grant of a preliminary injunction against a defendant accused of selling counterfeit e-cigarette and vaping products containing delta-8 THC. AK Futures LLC, a manufacturer of e-cigarette and vaping products, brought suit for trademark and copyright infringement against Boyd Street Distro, LLC, a Los Angeles smoke products wholesaler. AK Futures produces e-cigarette and vaping products containing delta-8 THC under the brand CAKE. Boyd Street apparently sold counterfeit versions that included both AK Futures’ CAKE trademark and its copyrighted logo. AK Futures brought suit seeking an injunction, which the District Court granted.
Boyd Street appealed, arguing that the CAKE marks were not protectable trademarks because delta-8 THC is illegal under federal law. The United States Court of Appeals for the Ninth Circuit disagreed.
The Court decisively held that the delta-8 THC products are not prohibited by federal law and therefore may support a valid trademark. The 2018 Farm Act amended the definition of “hemp” in the Controlled Substances Act to exempt cannabis plants and “all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers” with a delta-9 THC concentration of .3% or less on a dry-weight basis. Likewise, the DEA’s definition of “marijuana extract” only includes cannabinoids with greater than .3% delta-9 THC. If AK Futures’ products met that standard, they were lawful.
The Court’s decision offers a few key takeaways:
- Delta-9 Still Doesn’t Fly: Traditional cannabis products containing delta-9 THC still do not qualify for federal trademark protection, regardless of state legalization programs;
- It’s a Big Universe: Products containing legal cannabinoids and cannabis accessories offer cannabis brands the most direct route to obtaining federal trademark protection;
- Consider the Alternative: Cannabis brands should consider other forms of protection, such as registering copyrights for any unique logos or labels; and
- Compliance is Key: the Court noted that if AK Futures’ products did not contain the levels of cannabinoids they claimed on the labels, they may still ultimately fail to merit trademark protection.
This decision suggests a path to protection. But for now, it is still unclear whether the United States Patent and Trademark Office will quickly adapt.