Protecting Your Brand in the Cannabis Industry: 5 Practical Tips
Hinckley Allen Intellectual Property
February 15, 2019
By: Alexander P. Montgomery
A valuable form of legal protection for many brand owners is a federal trademark registration with the U.S. Patent and Trademark Office (“USPTO”). A federal trademark registration provides its owner several legal benefits, such as nationwide rights and protection in its trademark, a legal presumption of validity and ownership, and the right to use the ® symbol. Without a federal registration, a trademark owner’s rights are geographically limited and do not carry the same legal presumptions.
However, a federal trademark registration is not available for dispensaries and other purveyors of marijuana (at least not for their core goods). To be eligible for registration with the USPTO, a trademark must be in “lawful” use in interstate commerce. 15 U.S.C. §§1051, 1127; 37 C.F.R. §2.69. The USPTO’s current position is that because marijuana is illegal as a Schedule I substance under the Controlled Substances Act (“CSA”), 21 U.S.C. §§801-971, a trademark covering marijuana, marijuana extracts, other products incorporating THC (the psychoactive compound found in marijuana), or related paraphernalia, is not in “lawful” use in commerce. As a result, the trademark cannot be registered. Whether marijuana is legal in the trademark owner’s state is irrelevant because the USPTO must apply federal law. To date, the USPTO has never issued a federal trademark registration covering marijuana.
So, how does a marijuana-related brand maximize its legal protection when a federal trademark registration is not available? There are several steps a brand owner can take, including the following:
1: Select a Strong Trademark
One of the best things a brand owner in any industry can do is select a strong trademark. Legally strong trademarks are (1) completely made-up words (e.g., Google or Xerox), or (2) real words that have nothing to do with the underlying goods or services (e.g., “Apple” or “Sun” for computers). Suggestive words or phrases that convey but do not immediately describe the underlying goods or services (“Greyhound” for bus services) are also fairly strong. However, descriptive terms are difficult to protect and register as trademarks, and generic terms can never function as trademarks, because the law favors allowing everybody to use descriptive and generic terms to refer to their goods and services.
Strong trademarks are easier to protect and easier to get registered with the USPTO. Additionally, because strong trademarks are so unique, the risk of a third party already using a similar mark for the same or related goods or services is usually low. Strong trademarks are also more likely to distinguish the brand owner in the marketplace.
Therefore, when considering names for marijuana and marijuana-related goods or services, owners should select a strong trademark. If trademarks for such goods and services do eventually become eligible for registration with the USPTO, the last thing a brand owner wants is a refusal from the USPTO because the mark is merely descriptive or generic.
2: Conduct a Trademark Search
A trademark search should always be conducted before adopting a trademark. Trademark rights are awarded by priority, meaning use of a trademark that is confusingly similar to an existing trademark can result in an infringement claim (which often results in a complete rebranding by the junior user).
The fact that trademarks for marijuana and marijuana-related goods and services cannot be federally registered does not alleviate the need for a trademark search. Federal lawsuits for trademark infringement are being filed against marijuana companies, in many cases by non-marijuana companies that do not want their trademarks being used or associated with marijuana or marijuana-related goods. Further, every state has its own trademark laws. Although most trademark lawsuits are brought at the federal level, presumably a marijuana business could sue another marijuana business located in the same state for trademark infringement under that state’s laws.
In sum, brand owners should conduct a trademark search for any business names, brand names, slogans, or logos to minimize the risk of potential conflicts (and the resulting costs of business interruption associated with a forced rebranding).
3: File a Federal Trademark Registration for Legal, Ancillary Goods or Services
In addition to offering marijuana and marijuana-related goods, does your business provide a website that offers information and education on marijuana? Does it sell shirts, hats, or other apparel? Does it sell food or drink? If so, a brand owner may file a federal trademark application for those legal goods and services. A registration for ancillary goods or services gets your trademark on the federal trademark register, prevents the subsequent registration of a similar trademark for related goods or services, and can be used against third parties (including other marijuana companies) that adopt a similar trademark to sell those goods/services or anything related to them.
Note that the Agricultural Improvement Act of 2018 (commonly referred to as the Farm Bill) descheduled hemp from the CSA, meaning that the sale of hemp and derivatives of hemp, such as cannabidiol (CBD), are no longer illegal at the federal level. Theoretically, this means the USPTO can no longer refuse to register trademarks covering a CBD product. Therefore, a business selling products that contain CBD might consider filing a trademark application covering such products, which are arguably related to marijuana. If marijuana were to become legal at the federal level, a federal trademark registration for products containing CBD could put a marijuana business in a strong position to prevent a competitor in a different state from using a confusingly similar trademark, even if the competitor only sells marijuana-related goods. That registration might also prevent a third party from registering a trademark covering marijuana with the USPTO in the future.
4: File State Trademark Registrations
In many states where medical or recreational marijuana is legal, such as California, Colorado, Massachusetts, Nevada, and Oregon, a trademark covering marijuana can be registered at the state level. Although a state registration does not afford the owner any legal rights outside of the applicable state and does not necessarily expand the scope of the owner’s legal trademark rights over what it already has simply by using an unregistered mark, it does constitute tangible evidence of its trademark. Further, such registrations are relatively inexpensive and easy to get. However, unlike at the federal level, a trademark must actually be in use in a state to be registered. This likely limits most marijuana businesses to obtaining a state trademark registration only in the states where they are physically located.
5: Pay Attention to the Evolving Legal Landscape, Especially in Regard to Federal Trademark Registrations
The cannabis industry is quickly evolving, and so are its laws and regulations. Brand owners should continue to monitor the legal landscape, especially as it pertains to the federal registration of marijuana-related trademarks. If marijuana is removed from the CSA or the USPTO changes its policy on registering marijuana trademarks, thereby opening the door to federal trademark registrations for marijuana, a brand owner should be ready. Not only does quickly securing a federal trademark registration before a third party can start using something similar give a brand owner nationwide priority in its trademark, it reduces the risk of a third party filing a similar trademark for marijuana first, which could block or otherwise complicate a brand owner’s subsequent registration.
Please contact Alex Montgomery with any questions regarding the protection your marijuana-related brand, or regarding trademarks in general.
 The FDA has retained its ability to regulate certain CBD products under the Federal Food, Drug, and Cosmetic Act (FD&C Act) and section 351 of the Public Health Service Act. See Statement from FDA Commissioner Scott Gottlieb, M. D., on signing of the Agriculture Improvement Act and the agency’s regulation of products containing cannabis and cannabis-derived compounds – https://www.fda.gov/NewsEvents/Newsroom/PressAnnouncements/ucm628988.htm (last accessed January 17, 2019). A trademark for a product that does not comply with those acts is, according to the USPTO, not in “lawful” use in interstate commerce and will be refused registration by the USPTO. Trademark applications covering dietary supplements or food products that contain CBD, for example, will likely be refused registration, because such products are currently unlawful under the FD&C Act.