A Hot Springs business that has been using the name "Doctor's Orders" since it opened May 10 as the state's first medical-marijuana dispensary may not advertise under the name in Jefferson County, a federal judge has ruled.
However, in only partially granting a preliminary injunction sought by a Jefferson County pharmacy that has been using the name since 2009, U.S. District Judge Kristine Baker didn't completely prohibit the dispensary from using the name.
Her order, signed Monday, was filed in response to a trademark-infringement lawsuit filed May 22 by White Hall Pharmacy LLC, which does business as Doctor's Orders Pharmacy in two locations in the Pine Bluff metropolitan area.
Lelan Stice, the owner of the pharmacies, sought an emergency order to stop the dispensary from using the name. The lawsuit complained that extensive publicity about the opening of the dispensary had confused the pharmacy's customers, damaged its reputation and put it at risk of being investigated by the Drug Enforcement Administration, which doesn't allow the pharmacies to sell marijuana.
On June 10, Baker denied White Hall Pharmacy's request for a temporary restraining order, saying she needed more information and noting that a preliminary hearing was scheduled for June 14. Before and after that evidentiary hearing, attorneys on both sides of the issue filed briefs and witness affidavits.
In this week's order, the judge cited testimony from the hearing and affidavits in the court record to assess the pharmacy's five claims against the dispensary and its likelihood of eventually succeeding on the merits of the case. The claims are false or misleading advertising, false or misleading endorsements, misappropriation of trademark, tortious interference with business expectancy and unjust enrichment.
She also noted that White Hall Pharmacy had recently narrowed the relief it sought by dropping its objections to the dispensary using red lettering on a white background and the Rx symbol, though it still asked that the dispensary be ordered to stop using the words "Doctor's Orders" on any material it presents to the public.
Don Sears of Mayflower, the owner of the dispensary, contends that he doesn't advertise, but attorneys for White Hall Pharmacy cited five types of advertisements he produced: the Doctor's Orders Rx sign outside the dispensary, the creation of a location on Google Maps, interviews with news reporters about the dispensary's locations and services, the creation of a website for customers and the inclusion of the dispensary on a third-party website, Weedmaps.
Baker said that based on the information she has so far, the pharmacy hasn't demonstrated a likelihood of prevailing on the false-advertising claim. But she noted, "The Court is sympathetic to the fact that it may be difficult for White Hall Pharmacy to prove any immediate financial impact as a result of defendants' alleged false advertising, yet it appears ... that such an impact -- if it exists -- may become apparent as discovery proceeds in this case."
Baker also found that White Hall Pharmacy hasn't demonstrated a fair chance of prevailing on whether it has exclusive and previous use of its marks in the Hot Springs area or in the entire state, but she said it has demonstrated a likelihood of prevailing "on the question of whether it has exclusive and prior use of its marks in the Pine Bluff area."
Baker said that evidence presented so far indicates the pharmacy has a fair chance of prevailing on its claim that people are likely to be confused by the marks used by both businesses, calling them "similar." She also found that, although each business offers different services, "the parties' services and products do overlap to some extent."
No evidence has been presented, however, that the dispensary intended to pass off the pharmacy's marks as its own, as it applied for incorporation with the secretary of state's office and with the Arkansas Marijuana Commission as early as 2017, Baker said. She said evidence shows that the dispensary only became aware of the pharmacy's marks after opening its doors and receiving a "cease and desist" letter from White Hall Pharmacy's attorneys.
The judge noted that to purchase medical marijuana in Arkansas, a patient must first obtain a registry identification card from the state. She said the fact that the dispensary's goods and services "aren't impulse purchases" weighs against a finding of consumer confusion as a result of the dual use of the name.
Still, she said, the pharmacy has shown a threat of irreparable harm, "based on evidence of actual confusion."
Ultimately, Baker said, "The Court is not convinced that ... White Hall Pharmacy's market penetration extends significantly beyond the Pine Bluff area. Similarly, it is unclear if [the] medical marijuana dispensary serves customers throughout Arkansas, the Hot Springs area, or some other region. In other words, it is unclear if defendants' marks compete with White Hall Pharmacy's marks in any market, including the Pine Bluff area."
"Based on the evidence of actual confusion in the record, however," Baker wrote, "the Court concludes at least at this stage of the litigation that more likely than not White Hall Pharmacy and defendants' dispensary both serve customers in the Pine Bluff area. For these reasons, the Court grants White Hall Pharmacy a preliminary injunction only in the Pine Bluff area, which this Court construes as Jefferson County."
She said that the dispensary and those associated with it are prohibited from "holding themselves out under the 'Doctors's Orders' moniker, or any combination of words with Doctor's Orders, to the public within Jefferson County, Arkansas. This includes a prohibition on any signage and any advertising that can be viewed by consumers within Jefferson County, Arkansas."
Charles Singleton, an attorney for Sears and the dispensary, said Tuesday, when asked if Sears is considering changing the name of the dispensary, that, "The judge did not say he could not use the name 'Doctor's Orders.' She said he could not use the name in any advertising in Jefferson County. Since he is not advertising, that should not be an issue."
Attorneys for White Hall Pharmacy couldn't be reached for comment.
Metro on 08/21/2019