BBK Tobacco and Foods v. Central Coast Agricultural Inc. was a case in the District of Arizona set in the now-familiar landscape of cannabis-related IP disputes. BBK manufactures smoke-related products such as rolling papers bearing the trademark RAW, and Central Coast Agricultural, Inc. (CCA) markets and sells cannabis products — and attempted to register the trademark RAW GARDEN.
The two companies were aware of each other after representatives from each met at a cannabis industry tradeshow in 2016, exchanging business cards and envisioning the possibility of working together. However, when BBK learned of CCA’s application for the RAW GARDEN mark and registration of a similar domain name, BBK filed an opposition, eventually bringing this lawsuit for trademark infringement and cybersquatting.
The parties filed competing motions for summary judgment. CCA argued that BBK had surrendered its rights because it waited too long to file suit, a doctrine called laches. Laches says, when the trademark holder knowingly allows an infringing mark to be used without objecting for a lengthy period of time, it relinquishes the right to bring a lawsuit. Courts typically look to the most analogous state statute of limitations to determine if laches is a valid defense, which in Arizona is three years for tortious conduct (since trademark infringement is akin to trespassing and other torts).
BBK argued against the laches defense because CCA could not prove that the delay was unreasonable and prejudicial.
The friendly meeting between BBK and CCA representatives in 2016 would turn out to be important. According to CCA, the person from BBK said something to the effect that, if he thought his company’s legal department needed to be made aware of CCA’s branding, he would have immediately contacted them. CCA used this meeting to establish that BBK should have known about the allegedly infringing conduct by July of 2016. Instead, BBK brought suit in 2020, three months after the analogous statute of limitations had passed.
The court noted BBK’s letter of protest against the trademark application back in 2017. Even more importantly, CCA filed a 90-day extension to counter BBK’s opposition to the application. Moreover, the parties engaged in settlement negotiations for six months in 2018.
The judge found that CCA’s 90-day extension, along with the settlement negotiations, were enough to overcome laches. The court found unpersuasive CCA’s argument that none of the witnesses and other players would be able to remember the details of the case. The judge reasoned that, if BBK had filed the lawsuit three months earlier, within the statute of limitations, the parties would have a negligible difference in memory degradation. (Of course, memory degradation might already be a problem for many in the industry…)
The most important factor, according to the court, was that the plaintiff opposed the application of the defendant for the RAW GARDEN trademark as early as 2017.
The court granted the motion for summary judgment to strike the waiver, estoppel and unclean hands defenses. As for the claim of cybersquatting, the court said that in order to win, a plaintiff must show that the defendant registered the domain name in bad faith. There was no bad faith in this instance because Raw Garden was the name of its company and it was selling its products on its own websites.
When it came to punitive damages, the court found nothing that indicated an overwhelmingly bad-faith intent by the defendant, so there would be no punitive damages.
The court also took time to take issue with the plaintiff’s brief. In its effort to secure summary judgment, the plaintiff simply compiled a list of the offenses by their numeric classifications. Absent any document citation, the court wrote, the plaintiff apparently expected the court to hunt for the claims from a docket that had over 550 docket entries. Not only that, the legal authority cited by the plaintiff was sparse, providing only a list of string citations, expecting the court to link each case to a particular rule of law. This, the court said, did not meet the burden to show it is entitled to summary judgment.
The moral of this case is that filing an opposition — and making a record of this in the TTAB — can be crucial. Practitioners should not skip that step for the sake of “making nice” with friends they meet at tradeshows. Oppositions can make a very important record when later trying to enforce those rights if the friendship sours and the settlement is unsuccessful. Also, rushing the summary judgment brief (and failing to specify what proposition a case is supposed to represent) does not help or please the court.
