A brand can be one of the most valuable assets of one’s company or business. A federal trademark registration provides invaluable protection for the identifying feature of a company. Registration of brand trademarks is often a high priority for existing and emerging companies. However, trademarks are connected to specific classes of goods and services. So, what happens when the good or service you are providing is illegal under federal law, making it impossible to register a federal trademark? This is the exact scenario that is facing the many businesses that are a part of the burgeoning cannabis industry throughout the United States. Protecting marijuana trademarks and cannabis trademarks is difficult!
Despite the legalization of cannabis for medical use in 33 states and the legalization of cannabis for recreational use in 11 states, cannabis has long been deemed illegal by the federal government under the Controlled Substances Act (“CSA”). Because “lawful use” of a trademark in commerce is a requirement for federal registration, cannabis-related marks are generally found ineligible for federal trademark registration.
Cannabis and cannabis-related materials and services are a rapidly growing big money business, especially in the recreational states, such as here in Colorado. With growth comes competition, and countless cannabis companies have flooded the United States Patent and Trademark Office (“USPTO”) with trademark applications for their respective goods and services. On May 2, 2019, the USPTO released a comprehensive set of guidelines, found here, on what the USPTO will look for when examining cannabis-related trademarks. Here are the basic cannabis trademark rules the USPTO established in that guidance:
Cannabis is still prohibited from U.S. trademark registration
Trademark applications for hemp products must have an effective filing date of after December 20, 2018, but they’ll allow you to push your effective filing date back.
Trademark applications for CBD products must state that they are derived from hemp.
Trademark applications for CBD products must also state that the product contains less than 0.3% THC.
Trademark applications for hemp cultivation/production, will require evidence of licensure according to a USDA-approved plan – but the USDA has not issued new guidance.
The USPTO is clearly on the lookout, making it much harder for cannabis businesses to receive federal trademark protection. So is this the end of the road until such time that the US government chooses to legalize cannabis nation-wide? Not quite, since there are still steps savvy cannabis businesses can take to protect and capitalize on their brand.
State-based trademark registrations: Registration of cannabis-related trademarks is allowed in all states where cannabis is legal recreationally, and in most states where medical use is permitted. In these sates, trademark owners may sue for infringement (but not in federal court and only under state law). State-based trademark registrations are generally inexpensive and can be obtained in any states where common law use of the trademark exists (anywhere the cannabis company does business). States also generally allow registration of trademarks without the examination process that one must go through for federal trademarks. State-based registrations offer some of the protections of federal registration, and are a useful tool to stake one’s claim in a trademark within the states that the mark is used, and provide notice to competitors of that claim. State-based trademark registrations have intrinsic value for cannabis companies, including for marketing and contracting for the sale or licensing of a business or its assets.
That being said, many of the benefits of the federal registration system are unavailable at the state level. Provisions of the federal system that have no parallel at the state level include:
Ability to use the registered trademark symbol (®) when the mark is used for the goods and services listed in the registration (although the trademark superscript (™) remains available for all uses, including common law)
Incontestability after five years of continuous use
A basis for foreign registrations
Use of U.S. Customs and Border Protection to block imports that infringe the mark or are counterfeit.
While state trademarks are certainly limited in comparison to federal trademarks, they can be a useful tool for cannabis businesses to stake claim in their branding and protect from competition within the geographical bounds they are operating.
Ancillary goods and services: Cannabis businesses are often multifaceted, providing and selling a wide array of ancillary goods and services beyond just selling cannabis. Savvy business can take advantage of this variety of goods and services to garner protection for their cannabis business. The so-called trademark adjacency principle, sets out that a federal trademark will not only protect a mark in the class of products that a brand owner currently produces, but can also afford protection for use of the mark on classes of products that a brand owner might reasonably be anticipated to produce in the future. In order for a marijuana company to avail itself of this principle, it may choose to sell, and register federal trademarks for, a variety of ancillary products. Examples include (i) a registered marijuana dispensary selling non-marijuana infused baked goods to protect its brand name for edible marijuana products; (ii) registering a service mark for providing consulting and/or educational services to the marijuana industry (the services themselves are not illegal and, therefore, permitted to be registered); (iii) clothing items such as hats, t-shirts, and hoodies; (iv) stickers and pins; and (v) accessories such as pipes, e-pens, or vaporizers.
Although none of the ancillary registrations provide direct trademark protection to a cannabis brand in relation to the plant products, they do provide notice to other companies performing searches for a potential brand name that the owner’s mark is already in use, hopefully persuading competitors to avoid use of the same or confusingly similar names. Additionally, if/when the USPTO does commence granting federal registrations for marijuana products, it is possible that companies with existing marijuana-adjacent federally registered trademarks will have priority. While, theoretically, adjacent trademarks in ancillary products should provide a marijuana brand a degree of protection under the trademark adjacency principle, it should be noted that there is no clear precedent yet of cannabis-adjacent trademarks actually extending protection to marijuana products.
Sister products: Similar to the ancillary goods and services, cannabis businesses can develop and protect non-banned “sister” products that are complementary to their main product and reside in the same trademark class. For example, a company can produce dried herbs or live plants that can be developed in conjunction with live or dried cannabis plants. A company can produce a line of baked goods or edible items to sell that do not contain cannabis, to sell alongside the cannabis edibles. And a company can produce a line of legal smoking articles, such as tobacco products or vaporizers.
Copyright: Finally, if a cannabis business uses a design as its logo or for the branding of certain products, it may consider copyright protection for the logo. A copyright is an easy way to protect the design itself and discourage competitors from using that design or one that is similar.
Trademark protection is important for all industries – including the cannabis industry. While it continues to evolve in the marketplace, brand owners can stake their claims through some of these techniques to help develop protectable, long-lasting brands. While trademark and brand protection for cannabis businesses can be more difficult, it is not impossible if you approach it in a clear and focused manner and with the help of an attorney experienced in trademarks and cannabis trademark strategy. If you’re looking for ways to protect your cannabis brand and products, reach out to us at Creative Law Network so we can help you move forward with a clear strategy to get the protection you need!