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AK Futures LLC v. Boyd St. Distro, LLC

AK Futures LLC v. Boyd St. Distro, LLC

United States Court of Appeals for the Ninth Circuit

March 18, 2022, Argued and Submitted, Las Vegas, Nevada; May 19, 2022, Filed

No. 21-56133

Opinion

D.M. FISHER, Circuit Judge:

AK Futures LLC, a manufacturer of popular e-cigarette and vaping products, brought suit for trademark and copyright infringement against Boyd Street Distro, LLC, a downtown Los Angeles storefront and [*4]  smoke products wholesaler. According to AK Futures, Boyd Street has been selling counterfeit versions of its "Cake"-branded e-cigarette and vaping products containing delta-8 tetrahydrocannabinol ("delta-8 THC"), a chemical compound derived from hemp. Boyd Street contends that AK Futures does not have protectible trademarks for its Cake products because delta-8 THC remains illegal under federal law. Faced with AK Futures' request for a preliminary injunction, the District Court held that the 2018 Agriculture Improvement Act (the "Farm Act") legalized the company's delta-8 THC products, and it granted injunctive relief. Plain statutory text compels the conclusion that AK Futures' products are lawful, and we see no other reason to deny a preliminary injunction. We affirm.

I. Background

A. Factual History

AK Futures is a producer and distributor of e-cigarette and vaping products, including electronic delivery systems and cartridges containing e-cigarette liquid. This suit involves the company's Cake-branded delta-8 THC products. Delta-8 THC is a chemical compound that occurs naturally in the cannabis plant, Cannabis sativa L., which can be grown into either hemp or marijuana (alternatively [*5]  spelled marihuana) depending on cultivation method. 5 Things to Know about Delta-8 Tetrahydrocannabinol — Delta-8 THC, U.S. Food & Drug Admin. (Sept. 14, 2021). According to the Food and Drug Administration, delta-8 THC has "psychoactive and intoxicating effects" similar to delta-9 tetrahydrocannabinol ("delta-9 THC"), a different chemical compound and the main psychoactive component of marijuana. Id. The FDA notes that delta-8 THC "is not found in significant amounts in the cannabis plant. As a result, concentrated amounts of delta-8 THC are typically manufactured from hemp-derived cannabidiol." Id.

In 2018, Congress passed and the President signed the Farm Act, Pub. L. No. 115-334, 132 Stat. 4490, which legalized the possession and cultivation of hemp. See 21 U.S.C. §§ 802(16)(B), 812 sched. I(c)(17). Because hemp and marijuana are different varieties of the same plant, the Farm Act uses the concentration of delta-9 THC to set a threshold distinguishing the two. As defined by the Act, hemp includes "any part of" the plant Cannabis sativa L. "and all derivatives, extracts, [and] cannabinoids . . . , whether growing or not," with a delta-9 THC concentration of no more than 0.3 percent on a dry weight basis. 7 U.S.C. § 1639o(1). The Act is silent with regard to delta-8 THC.

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2022 U.S. App. LEXIS 13526 *; 35 F.4th 682; 2022 U.S.P.Q.2D (BNA) 479

AK FUTURES LLC, Plaintiff-Appellee, v. BOYD STREET DISTRO, LLC, a California limited liability company, Defendant-Appellant.

Prior History:  [*1] Appeal from the United States District Court for the Central District of California. D.C. No. 8:21-cv-01027-JVS-ADS. James V. Selna, District Judge, Presiding.

Futures Llc v. Boyd St. Distro Llc, 2021 U.S. Dist. LEXIS 204640, 2021 WL 4860513 (C.D. Cal., Sept. 15, 2021)

CORE TERMS

products, trademark, delta-8, Cake, hemp, district court, injunction, delta-9, preliminary injunction, plant, counterfeit, extracts, cannabinoids, cannabis, manufacturing, infringement, legalized, percent, e-cigarette, irreparable harm, tetrahydrocannabinols, declaration, argues, concentration, unregistered, derivatives, registered, synthetic, compound, succeed

Civil Procedure, Appeals, Standards of Review, Abuse of Discretion, Remedies, Injunctions, Preliminary & Temporary Injunctions, De Novo Review, Clearly Erroneous Review, Grounds for Injunctions, Balance of Hardships, Public Interest, Copyright Law, Copyright Infringement Actions, Civil Infringement Actions, Registration Requirement, Trademark Law, Registration Procedures, Federal Registration, Degree of Protection, Business & Corporate Compliance, Trademark Cancellation & Establishment, Commercial Use, Actual Use, Priority, Actual Use Priority, Causes of Action Involving Trademarks, Infringement Actions, Determinations, Governments, Legislation, Interpretation, Governments, Agriculture & Food, Distribution, Processing & Storage, Summary Judgment, Supporting Materials, Affidavits, Evidence, Types of Evidence, Documentary Evidence, Administrative Law, Judicial Review, Deference to Agency Statutory Interpretation, Rule Interpretation, Reviewability of Lower Court Decisions, Preservation for Review