Intellectual Property News and Reports

The panel affirmed the district court’s grant of a preliminary injunction in favor of AK Futures LLC, a manufacturer of e-cigarette and vaping products, in a copyright and trademark infringement action in which AK Futures alleges that Boyd Street Distro, LLC, has been selling counterfeit versions of AK Futures’ “Cake”-branded e-cigarette and vaping products containing delta-8 tetrahydrocannabinol (“delta-8 THC”).

The panel wrote that the district court’s order, which limited the scope of copyright protection to AK Futures’ one registered copyright and granted trademark protection to its six unregistered marks, properly distinguished between trademark and copyright protection.

Boyd Street did not contest the district court’s finding that it was selling counterfeit versions of AK Futures’ Cake products. Its chief argument was that AK Futures could not own a valid trademark in connection with these products because federal law forbids possession and sale of delta-8 THC. Granting the preliminary injunction, the district court held that the 2018 Agricultural Improvement Act (the “Farm Act”) legalized the company’s delta-8 THC products. 

The panel held that the plain and unambiguous text of the Farm Act compels the conclusion that AK Futures’ delta8 THC products are lawful. Observing that the relevant portion of the Farm Act removes “hemp” from the definition of marijuana in the Controlled Substances Act, the panel concluded that on the available record, the delta-8 THC in AK Futures’ e-cigarette liquid appears to fit comfortably within the statutory definition of “hemp”—i.e., the liquid is properly understood as a derivative, extract, or cannabinoid originating from the cannabis plant and containing “not more than 0.3 percent” delta-9 THC. The panel wrote that because the Farm Act’s definition of hemp is not ambiguous, the panel does not consider agency interpretation, and even if it did, the Drug Enforcement Agency’s view of the Farm Act’s plain text aligns with the panel’s own. The panel wrote that any congressional intent that the Farm Act legalize only industrial hemp, not a potentially psychoactive substance like delta-8 THC, appears neither in hemp’s definition nor in its exemption from the Controlled Substances Act. The panel therefore concluded that AK Futures is likely to succeed on the merits of its trademark claim. 

The panel held that Boyd Street failed to overcome the district court’s finding and presumption of irreparable harm absent an injunction. The panel wrote that none of Boyd Streets’ arguments why the injunction is not in the public interest succeed in convincing it that the district court erred.

The panel remanded for further proceedings.

Download AK FUTURES LLC V. BOYD STREET DISTRO LLC