Cannabis Conundrum: Hurdles to Trademark Protection in a “Growing” Industry
On November 8, seven states voted to liberalize existing cannabis laws, bringing the total number of states that will permit cannabis use in some capacity to nearly 30. Given that medical cannabis use has been legal in California for over 20 years and in light of the recent trend towards broader legalization, it may come as a surprise to many that securing formal cannabis trademark rights can be difficult, if not impossible.
The reason is that federal trademark registration with the United States Patent and Trademark (USPTO) is only available for marks used “in commerce.” Use in commerce means commerce that can be lawfully regulated by Congress. Although over half the states now allow the use of cannabis in at least some circumstances, the federal Controlled Substances Act still prohibits manufacturing, distributing, dispensing, or possessing marijuana and marijuana-based products or paraphernalia. As such, most cannabis-related activities cannot be lawfully regulated by Congress, and the USPTO has taken the position that trademarks used in connection with these activities cannot be registered.
However, it is possible to secure trademark rights for ancillary goods or services which, while related to cannabis, are not technically illegal. For example, applicants have successfully registered trademarks with the USPTO in connection with providing informational websites and publications about cannabis, software to collect news about cannabis, consulting services for the cannabis industry, chemicals for testing the potency of cannabis, educational and training services related to cannabis, promoting scientific research in the field of cannabis, and organizing cannabis industry trade shows.
The key is that the mark must truly be used with the legal goods or services described in the application. Vague descriptions referring to “plants” or “herbs” will likely be met with additional questions from the USPTO. If the USPTO has questions about the nature of an applicant’s business, it can require an applicant to sign a declaration stating that its activities do not violate the Controlled Substances Act.
The good news for cannabis brand owners is that even if federal trademark registration with the USPTO is impossible, there are other ways to secure trademark rights. Though a USPTO trademark registration is the gold standard for brand protection, trademark rights develop automatically through use of a mark. These “common law” rights are more limited than a federal registration, but they are still enforceable.
Also, state trademark registration may be available in the state(s) where the mark owner operates. One notable exception is California, which apparently has voluntarily refused to register marks used on cannabis or related goods or services. The reason is California’s trademark statute, which states that it provides protection “substantially consistent with the federal system of trademark registration and protection”
With the recent cannabis-related election results, some predict that federal legalization in at least some capacity will appear on the horizon. In the meantime cannabis brand owners should rely on common law rights, state registration, and federal trademark registration of ancillary goods or services for trademark protection and should not hesitate to enforce their marks to the extent possible.