- within Cannabis & Hemp and Insolvency/Bankruptcy/Re-Structuring topic(s)
In BBK Tobacco & Foods LLP v. Cent. Coast Agric., Inc., 97 F.4th 668 (9th Cir. 2024), the Ninth Circuit Court of Appeals held that federal district courts have power to adjudicate trademark applications pursuant to the Lanham Act, 15 U.S.C. § 1119, provided that the litigation involves infringement of a registered trademark.
Plaintiff BBK Tobacco & Foods LLC ("BBK") distributes and sells smoking-related products under the RAW trademark. Defendant Central Coast Agriculture, Inc. ("CCA") sells concentrate and pre-rolled cannabis products under the trademark RAW GARDEN. BBK sued CCA, claiming that CCA infringed its RAW trademarks. BBK also sought to void several of CCA's federal trademark applications for the RAW GARDEN mark, filed on an intent-to-use basis, due to a lack of bona fide intent to use the mark in commerce.
The district court granted BBK's motion for summary judgment to invalidate CCA's trademark applications. On appeal, CCA argued that the district court lacked jurisdiction to void trademark applications, and that the Lanham Act provided district courts with only the limited power to invalidate or restore registrations.
15 U.S.C. § 1119, which confers this right upon district courts, provides:
"In any action involving a registered mark the court may determine the right to registration, order the cancelation of a registration, in whole or in part, restore canceled registrations, and otherwise rectify the register with respect to the registration of any party to the action."
Interpreting this language, the Ninth Circuit held that the "plain language of § 1119 ... grants a district court jurisdiction to consider challenges to the trademark applications of a party to the action if the action involves a registered trademark." Id. at 670.
The Panel noted that a district court's power to "determine the right to registration" and "rectify the register" includes authority to invalidate trademark applications.
The Panel observed that "[p]ermitting a district court to adjudicate trademark applications when an action already involves a registered mark advances the interest of resolving all registration disputes in a single action." Id. at n.671.
Judge Bumatay issued a dissenting opinion, noting that 15 U.S.C. § 1119 does not give district courts the authority to void pending applications. The judge observed that Congress vested certain powers with the USPTO to adjudicate trademark applications, and that by allowing federal courts to prematurely interfere and void applications would interfere with the USPTO's vested authority. In sum, Judge Bumatay argued that the Lanham Act gives the USPTO, not district courts, the exclusive authority over applications and that courts will "short-circuit" Congress's will by interfering prematurely.
Originally published on April 19, 2024.
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