MarkIt to Market® - July 2021 | Sterne, Kessler, Goldst

View OnlineJuly 2021 VISIT WEBSITECONTACT USSUBSCRIBEFORWARD TO A FRIENDEditor:Monica Riva TalleyDirectormtalley@sternekessler.com Author:Shana L. OlsonAssociatesolson@sternekessler.com Author:Ian SouleAssociateisoule@sternekessler.com Author:Richa PatelSummer Associaterpatel@sternekessler.com Author:Lauriel F. DalierCounselldalier@sternekessler.com Author:Deborah Sterling, Ph.D.Directordsterling@sternekessler.com The July 2021 issue of Sterne Kessler's MarkIt toMarket® newsletter discusses fluid trademarks and the Cannabis Administration and Opportunity Act. Plus, check out the answer key to last month's Watching the PotTM crossword puzzle!Sterne Kessler's Trademark & Brand Protection practice is designed to help meet the intellectual property needs of companies interested in developing and maintaining strong brands around the world. For more information, please contact Monica Riva Talley or Tracy-Gene G. Durkin.IN THIS ISSUE Bombing Atomically –Futura and the Future ofFluid TrademarksBudding Legislation – TheCannabis Administrationand Opportunity ActWatching the PotTMDOWNLOADBUDDING LEGISLATION – THE CANNABIS ADMINISTRATIONAND OPPORTUNITY ACTBy: Lauriel F. DalierOn July 14, 2021, Senate Majority Leader Chuck Schumer, together with Senate FinanceCommittee Chair Ron Wyden and Senator Cory Booker, released a discussion draft of theCannabis Administration and Opportunity Act (the “CAOA”), comprehensive legislation thatproposes, among other things, removing cannabis from the Controlled Substances Act (CSA),empowering states to implement and control their own cannabis policies, transferring agencyfunctions with respect to regulation of cannabis products, and providing for restorative justice. Read MoreThe information contained in this newsletter is intended to convey general information only, and shouldnot be construed as a legal opinion or as legal advice. Sterne, Kessler, Goldstein & Fox P.L.L.C.disclaims liability for any errors or omissions, and information in this newsletter is not guaranteed to becomplete, accurate, and updated. Please consult your own lawyer regarding any specific legal questions.© 2021 Sterne, Kessler, Goldstein & Fox P.L.L.C Click Here to opt-out of this communicationBOMBING ATOMICALLY – FUTURAAND THE FUTURE OF FLUIDTRADEMARKSBy: Shana L. Olson, Ian Soule, and Richa PatelThis month, Google has celebrated July 4th, the start ofthe 2020 summer Olympics, and Ángela Peralta's 175thbirthday, to name a few, through its iconic Google Doodlesfound atop the Google search page. Google is one ofmany companies that frequently makes modifications toits marketing materials while still making sure that itsbrand is undeniably recognizable.Read MoreWATCHING THE POTTMCannandrum Crossword Puzzle Answer KeyBy: Lauriel F. Dalier and Deborah Sterling, Ph.D.In the June 2021 issue of MarkIt to Market®, Watching thePotTM featured a cannabis-themed crossword puzzle.Here we provide the "Cannandrum: Can You 'Hash' ItOut?" answer key. We hope you enjoyed solving thispuzzle!Read MoreView Online July 2021 VISIT WEBSITECONTACT USSUBSCRIBEFORWARD TO A FRIENDBOMBING ATOMICALLY – FUTURA AND THE FUTURE OFFLUID TRADEMARKSBy: Shana L. Olson, Ian Soule, and Richa PatelThis month, Google has celebrated July 4th, the start of the 2020 summer Olympics, andÁngela Peralta's 175th birthday, to name a few, through its iconic Google Doodles found atopthe Google search page. Google is one of many companies that frequently makesmodifications to its marketing materials while still making sure that its brand is undeniablyrecognizable. Similarly, vodka manufacturer Absolut sells its products in bottles with variousbackgrounds including city landscapes or fruit-centered designs, while retaining its distinctivebottle shape. MTV fills its block-“M” glyph with images of entertainers or other eye-catchingdesigns while maintaining contrast within its logo with the smaller “TV” text in a solid color.Even the ubiquitous banana brand Chiquita Brands International uses various icons within itsoval sticker while still maintaining its classic blue and yellow branding scheme.By making frequent changes to create various versions of a mark, these companies arecreating what has been referred to as a “fluid trademark.”1 Official legal protection does notexist for fluid trademarks, per se, but fluid trademarks are undoubtedly part of the modern ageof marketing. To adapt to the fast-paced world of technology, marketing has moved towardbecoming similarly fast-paced by using frequently changing logos and branding to draw in andretain consumers. But doing so may create additional issues because a fluid trademark maynot offer the same intellectual property value that a static mark provides and, if used incorrectly,fluid trademarks may harm consumer brand recognition and could even lead to the underlyingmark being considered abandoned for non-use. A more insidious threat may be that thirdparties might “style-bite” with impunity and profit off of a fluid trademark without any legalrecourse for the original creator.Street artists have been known to use undeniably recognizable, yet fluid, designs. Berlin’sanonymous collective 1UP Crew2 writes “1UP” and while the group’s designs change with eachpainting, the bubble-like 3-D forms and tags are readily recognizable, especially to their over800K Instagram followers. Similarly, graffiti writers and street artists that move to the fine-artworld may lean on motifs and styles that become their own. An example includes Detroit-basedJason “REVOK” Williams’s3 spirograph and instrument frame drag series.4 Each piece in hisrespective series is distinctive and recognizable as a REVOK art piece.Recently, Futura (aka Leonard McGurr), a pioneering street artist with a fluid, yet recognizable,signature stylized atom design, filed a complaint against the outdoor apparel company TheNorth Face for use of an arguably similar atom design in connection with the FUTURELITEbrand. Futura deploys his signature atom design in his own artwork, and has collaborated withcompanies such as Nike, Uniqlo,5 BMW,6 the New York Mets,7 Levi’s, Supreme, Vans, andHennessey.8 Futura even collaborated with The North Face in 2004 to create a camouflage-print jacket.9 In 2019, The North Face came out with a new line of clothing called“FUTURELIGHT” utilizing a logo with a stylized atom design that is arguably similar to Futura’s.Futura then sued The North Face for unfair competition.10 In the lawsuit, Futura argued that hisatom design is a fluid trademark, and cited secondary sources that support the concept of fluidtrademarks.11 The North Face responded by arguing that the design does not serve the “sourceidentifier” purpose of a trademark because the inconsistent design is aesthetically functional,merely ornamental, and purely artwork.12The complaint was dismissed without prejudice by the District Court for the Central District ofCalifornia, in part based on the court’s view that Futura’s claims in the alleged fluid trademarkdoes not support a claim for which relief can be granted.13On June 14, Futura filed his Second Amended Complaint and on June 21, he posted onInstagram addressing his loss in court and promising to continue fighting for IP protection forartistic reinterpretation.14 Soon after, The North Face announced that it would discontinue theuse of the logo out of respect to the artist.Despite this victory in principle, reading between the lines of the district court’s order, the courtdismissed the secondary sources Futura cited as supporting the theory of fluid trademarks—thecourt was unwilling to extend the theory and create legal precedent where none exists, andnoted that the sources generally characterize fluid trademarks as fluid marks that are based onregistered and valid trademarks. In contrast, Futura’s base mark of the atom is not registered.The court noted that legally recognizing fluid trademarks “would give new meaning to federaltrademark law with far-reaching consequences.”15 Perhaps most importantly, the court assertedthat trademark law is not the right type of protection for Futura’s atom design and style, holdingthat the protection Futura seeks “is not within the realm of trademark law.” Artists like Futurawith multiple versions of a signature design should be mindful of other avenues to protect theirintellectual property in addition to traditional trademark protection. While copyright protectioncan provide some protection for artists in certain situations (as in the case of REVOK), liketrademark law, there is no specific protection for “fluid” copyrights under the law.For now, there are a few key takeaways for artists to keep in mind, especially those with fluidsignature marks. First, consider registering a base mark, assuming that the resulting fluidmarks have a central design element. Once registered, continue to use the base mark with thegoods and/or services covered in the registration to prevent abandonment. For example, abase mark can be registered in Class 25 if the mark is used with clothing, or it can beregistered in Class 41 for art exhibitions or for education-related services. Once the base markhas developed strength and is recognized by consumers, spin-off versions of the mark thatinclude the base mark help reinforce the connection between the mark variations and thesource. Second, while artists may not by nature be litigious, ensuring proper enforcement of thefluid mark is also key to maintaining strong trademark protection. Finally, on the front end ofcollaboration, additional contracting negotiations may be warranted, including establishingterms of use for parties wanting to use the mark or create other iterations of the base mark,even during initial collaboration negotiations.A departure from the current landscape of trademark law by providing protection for fluid markswould require either legislative or judicial action, but such protection would provide meaningfulprotection for companies and artists using fluid marks. Providing some sort of rubric wouldprovide for a more realistic application of trademark protection in a new fast-paced and creativemarketing and artistic age. On the other hand, the future of fluid trademark theory must accountfor predictability in enforcement and some degree of certainty in application. While the future offluid trademarks is indeed, fluid, artists have never been shy to explore uncharted waters. [1] Perry J. Viscounty, Jennifer L. Barry & David B. Hazlehurst, Fluid Trademarks: All Fun, orSome Risk?, Intellectual Prop. Today (February 2014), www.lw.com/thoughtLeadership/fluid-trademarks-all-fun-or-some-risk.[2] 1Up (@1up_crew_offical) , Instagram, https://www.instagram.com/1up_crew_official.[3] Jason Revok (@_revok_), Instagram, https://www.instagram.com/_revok_.[4] In 2018 REVOK was ultimately successful in having fast-fashion retailer H&M in taking downan unsanctioned ad using one of his instrument frame drag graffiti pieces painted in New Yorkin view of copyright assertions. See Sonia Rao, H&M’s battle with the artist Revok shows howstreet art is being taken seriously (March 16, 2018),https://www.washingtonpost.com/news/arts-and-entertainment/wp/2018/03/16/hms-battle-with-the-artist-revok-shows-how-street-art-is-being-taken-seriously/.[5] The North Face Apparel Corp., et al., Case No.: 2:21-cv-00269-SB at 2[6] BMW meets FUTURA 2000: Three exclusive originals and a limited edition of the BMW M2Competition (January 29, 2020),https://www.press.bmwgroup.com/canada/article/detail/T0305035EN/bmw-meets-futura-2000:-three-exclusive-originals-and-a-limited-edition-of-the-bmw-m2-competition.[7] Leith Estiler, Futura to Release 'Pointman' Bobblehead & Apparel with New York Mets (July17, 2019), https://hypebeast.com/2019/7/futura-new-york-mets-collaboration-details[8] Nick Schonberger, A History of Futura’s Collaborations (August 14, 2012),https://www.complex.com/style/2012/08/a-history-of-futuras-collaborations/.[9] Id.[10] The North Face Apparel Corp. et al., Case No.: 2:21-cv-00269-SB at 3[11] Id. at 4, 5.[12] Id. at 4.[13] Leonard McGurr v. The North Face Apparel Corp., et al., Case No.: 2:21-cv-00269-SB at 1,3, 6[14] Futura (@futuradosmil), Instagram (June 21, 2021) www.instagram.com/p/CQY8uT7nqnV. [15] The North Face Apparel Corp. et al., Case No.: 2:21-cv-00269-SB at 6.The information contained in this newsletter is intended to convey general information only, and shouldnot be construed as a legal opinion or as legal advice. Sterne, Kessler, Goldstein & Fox P.L.L.C.disclaims liability for any errors or omissions, and information in this newsletter is not guaranteed to becomplete, accurate, and updated. Please consult your own lawyer regarding any specific legal questions.© 2021 Sterne, Kessler, Goldstein & Fox P.L.L.C Click Here to opt-out of this communicationView Online July 2021 VISIT WEBSITECONTACT USSUBSCRIBEFORWARD TO A FRIENDBUDDING LEGISLATION – THE CANNABIS ADMINISTRATIONAND OPPORTUNITY ACTBy: Lauriel F. DalierOn July 14, 2021, Senate Majority Leader Chuck Schumer, together with Senate FinanceCommittee Chair Ron Wyden and Senator Cory Booker, released a discussion draft of theCannabis Administration and Opportunity Act (the “CAOA”), comprehensive legislation thatproposes, among other things, removing cannabis from the Controlled Substances Act (CSA),empowering states to implement and control their own cannabis policies, transferring agencyfunctions with respect to regulation of cannabis products, and providing for restorative justice. The legislation also provides proposals for restorative justice and opportunity programs, aimedat ending decades of harm to communities of color because of current policies. If implemented, the Food and Drug Administration (FDA) would be recognized as the primaryfederal regulatory authority on the manufacturing and marketing of cannabis products, and theAlcohol and Tobacco Tax and Trade Bureau (TTB) would regulate taxation of cannabis productsand trade practices of cannabis enterprises. The agencies would have dual jurisdictionregarding certain aspects of product labeling, packaging, advertising, and other consumerinformation. The proposed legislation also provides for the establishment of the Center for CannabisProducts in FDA, adding a new chapter to the Federal Food, Drug, and Cosmetic Act (FFDCA)for regulating cannabis in foods, dietary supplements, drugs, and cosmetics. The Center forCannabis Products would regulate all cannabis-ingredient products except those directed attreatment and prevention of disease in people and animals, which would be regulated by otherFDA Centers and subject to FDA drug approval requirements. Under this discussion draft,cannabis ingredient foods that are not classified as drugs would be regulated as dietarysupplements. And manufacturers of such products would be permitted to claim beneficialattributes of products the way that dietary supplements do currently, provided they supplyreliable scientific evidence and include on the label of such products a notice indicating theFDA has not evaluated the statements. A few other things to consider: while the legislation would end the federal prohibition oncannabis, certain federal standards would be established, including a minimum age of 21 topurchase recreational marijuana products and a maximum weight of 10 ounces per transaction.In addition, individual states would still control cannabis policies within their states, with someexceptions as to interstate commerce such as prohibiting transportation of cannabis acrossstate’s borders into a state for purposes of lawful sale. The legislation also makes availablecrucial services to cannabis businesses, including bank accounts and loans. The very detailed proposals and seemingly altruistic goals of the legislation are yet anotherpositive example of the desperate desire and need for guidance as to the regulatory roadmapfrom those interested in and already participating in the cannabis industry. Because of theregulatory maze, those businesses already familiar with this bureaucratic entanglement arelikely to have an advantage and thus, likely to expand into this industry themselves, including inbranding and efforts to register their brands at the federal level. Still, no need to feel beaten outby the “big guys” yet – they, like anyone interested in this field, are beholden to the currentlaws, including federal trademark laws which still currently prohibit federal registration forcannabis-ingredient consumables or those that might fall under the FFDCA.The information contained in this newsletter is intended to convey general information only, and shouldnot be construed as a legal opinion or as legal advice. Sterne, Kessler, Goldstein & Fox P.L.L.C.disclaims liability for any errors or omissions, and information in this newsletter is not guaranteed to becomplete, accurate, and updated. Please consult your own lawyer regarding any specific legal questions.© 2021 Sterne, Kessler, Goldstein & Fox P.L.L.C Click Here to opt-out of this communicationView Online July 2021 VISIT WEBSITECONTACT USSUBSCRIBEFORWARD TO A FRIENDWATCHING THE POTTMCannandrum Crossword Puzzle Answer KeyBy: Lauriel F. Dalier and Deborah Sterling, Ph.D. In the June 2021 issue of MarkIt to Market®, Watching the PotTM featured a cannabis-themedcrossword puzzle. Here we provide the "Cannandrum: Can You 'Hash' It Out?" answer key. Wehope you enjoyed solving this puzzle!ACROSS2 This agency (abbrev.) registers trademarks and patents.4 In 2018, the U.S. FDA approved Epidiolex®, a cannabidiol oral solution, for the treatment ofseizures associated with two rare and severe forms of ______.5 House Judiciary Committee Chairman (10 Down) reintroduced the MORE Act in _____2021.8 Not sharp or a hollowed-out cigar filed with ground cannabis.9 On June 22, 2021, ________ became the 19th state to legalize use of marijuana for peopleaged 21 and over.11 Use of a trademark as a verb could put it at risk of being subject to _______.12 In the US, the legal allowable amount of total THC in industrial _____ is 0.3% on a dryweight basis.13 ______ (hops) is in the same family of flowering plants as cannabis.14 Enacted December 27, 2020, this act (abbrev.) codifies the Letter of Protest process andauthorizes new procedures for third parties to challenge applications and registrations.16 Trademarks can be comprised of a word, ______, phrase, or combination thereof, andindicates the source of the goods/services.18 One type of fair use of another's trademark is _____ fair use.19 Coin + plastic container = _____ (2 words).21 It is ______ to market CBD by adding it to food or labeling it as a dietary supplement.22 The U.S. Copyright Office is part of the (3 words) _______________.23 _______ ____ ______ (3 words) Hint: Marin and Tommy. DOWN1 What protects intellectual property created by artists?3 The patent term for utility patents covering a cannabis product is ______ years.6 To be patentable inventions must be _____ and ________ (two words).7 Copyrights owned by the author last for ____ years after the death of the author.8 Reintroduced in March 2021, the SAFE Banking Act aims to provide a safe harbor for_______ institutions providing services to cannabis clients.10 The Marijuana Opportunity, Reinvestment and Expungement (MORE) Act, sponsored byHouse Judiciary Committee Chairman ___________ (first and last name), cleared the chamber2020 but did not advance in the Senate under GOP control.15 In the U.S., trademark rights arise from ____.17 First state to ban marijuana (1913).20 The ______ Bill removed hemp from the Controlled Substances Act (CSA).22 Great volume or cannabis with very strong odor

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