Magistrate Judge Recommends that Veritas Trademark Claims Be Dismissed

On Monday, Magistrate Judge Michael E. Hegarty recommended that the District of Colorado dismiss trademark-related claims filed by Carrick-Harvest, LLC which does business as Veritas Fine Cannabis against Veritas Farms, Inc. The petitioner filed claims of trademark infringement, false designation of origin, unfair competition, cybersquatting, and declaratory judgment in its complaint last summer

The defendant filed a motion to dismiss the initial complaint in August, and another motion to dismiss the amended complaint in October. Judge Hegarty cited that before the 2018 Farm Bill, the USPTO would likely not have approved a cannabis-related trademark registration, and agreed with the defendants that federal trademark law applies only to “protect marks that are in substance legal under federal law,” thus protection of marijuanna related goods under trademark law would be prohibited and for cannabis-related goods protection is only recently available.  

According to Monday’s recommendation, Carrick-Harvest has five trademark applications pending before the United States Patent and Trademark Office (USPTO) for marks using Veritas. The plaintiff claimed it has used the Veritas marks to provide information about cannabis and cannabis products since 2016, and has invested in the marks through promotion and advertising. The plaintiff claimed that it owns the common law trademark to Veritas. 

The defendants reportedly use the trademark Veritas Farms to provide cannabis-related goods and services, including information about cannabis. Veritas Farms reportedly created two websites in 2018, and another in 2019 using the word veritas in the URL.  According to the order, the most recent website currently has no content. The defendants have reportedly filed four trademark applications for the VERITAS FARMS trademark. The company argued that if the common law trademark the plaintiff claims exists, it would be limited to providing information about cannabis, and so its products would not be infringing the mark. 

According to the recommendation, the court found the plaintiff “has not adequately pleaded that its Veritas Marks constitute a use in commerce,” since providing information is promotional. The filing reported that the first amended complaint did not show that Carrick-Harvest’s websites using the Veritas mark provide commercial benefit to the plaintiff. Because of this, the plaintiff’s claims that it has used an identical or similar mark in commerce were also not adequately pleaded. 

The court did agree with the plaintiffs that the similar marks cause a likelihood of confusion, citing that on social media the plaintiffs had mistakenly been tagged instead of the defendants. Judge Hegarty recommended dismissing the trademark infringement and unfair competition claims in part, because of the failure to show that the common law mark was used in commerce. He explained that amendment of the claims of trademark infringement, unfair competition, and declaratory judgment would likely be futile and suggested dismissal with prejudice, but recommended dismissing the cybersquatting claim without prejudice. 

Veritas Farms is represented by Akerman LLP and Carrick-Harvest is represented by Greenspoon Marder LLP.