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Trademark Strategies For Emerging Marijuana Businesses

AIPLA Mid-Winter Institute
2017

Companies entering into the emerging and potentially massive market for medical and recreational marijuana products and services will face unique challenges when attempting to register their trademarks with the United States Patent and Trademark Office because the USPTO requires “lawful use in commerce” for registered marks 15 U.S.C. § 1052 (2014).

For decades, publishers of marijuana-themed magazines, pipe and rolling paper companies, and manufactures of grow lights have successfully registered their trademarks in the USPTO.  Likewise, marks used for marijuana-themed educational and entertainment services have been registered with relative ease in the USPTO.

At best, the USPTO would treat applications covering such products and services just like applications for any other consumer goods or entertainment services.  At worst, and more recently, the USPTO has been asking whether the goods or services at issue violate the Federal Controlled Substances Act.  Rankin v. Longs Drug Stores California, Inc., 169 Cal. App. 4th 1246, 87 Cal. Rptr. 3d 543, 2009.

Most applicants faced with these inquiries were able to simply explain that while their goods and services related, in some way, to a controlled substance, they did not violate or even implicate the Controlled Substances Act.  21 U.S.C. § 801 (2014), et al.  For example, if you applied to register a mark for seminars and conferences and the USPTO determined from your specimen of use or its own web research that your seminars and conferences in some way related to marijuana, you would likely be asked to clarify that the seminars and conferences did not include the distribution or display of marijuana or at least that you are not seeking registration for the distribution or display of marijuana.  A simple and honest response to that effect, along with an amendment of your description of services to clarify that issue, would satisfy the concerns of the USPTO and, barring any other problems with your application, you would soon be granted a United States trademark registration.  Or, you could preemptively include in your description of services language such as “not including the provision of marijuana, marijuana-based preparations or marijuana extracts or derivatives.”

But what if you want to sell medical or recreational marijuana in states that permit those sales?[1]  For a business like this, the options for trademark protection may be more limited and the pathway toward legitimacy in the eyes of the USPTO may be a rocky one.

I. Lawful Use in Commerce

The Lanham Act has been interpreted by the USPTO and courts to allow only for the registration of trademarks used lawfully in commerce.  Trademark Manual of Examining Procedure (“TMEP”) §907; see In re Stellar Int’l, Inc., 159 U.S.P.Q. 48, 50-51 (T.T.A.B. 1968); CreAgri, Inc. v. USANA Health Scis., Inc., 474 F.3d 626, 630, (9th Cir. 2007).  “Commerce” is defined in the Lanham Act as “all commerce which may lawfully be regulated by Congress.”  15 U.S.C. §1127.  In other words, use in commerce only creates trademark rights when the use is lawful.   Courts have reasoned that to hold otherwise would be to put the government in the “anomalous position” of extending the benefits of trademark protection to a seller based upon actions the seller took in violation of that government’s own laws.  See In re Stellar, 159 U.S.P.Q. at 51.  The “unlawful use” doctrine has its origins in the common-law doctrine of unclean hands, see Dessert Beauty, Inc. v. Fox, 617 F. Supp. 2d 185, 190 (S.D.N.Y. 2007), which requires that “the alleged misconduct by the party relate directly to the transaction concerning which the complaint is made.”  Seller Agency Council, Inc. v. Kennedy Ctr. for Real Estate Educ., Inc., 621 F.3d 981, 986 (9th Cir. 2010) (citation omitted; emphasis added).

The trademark “unlawful use” doctrine is extraordinarily narrow and has been strictly limited to cases where: (1) a party’s non-compliance has previously been determined by a court or government agency having competent jurisdiction under the statute involved, or (2) there has been a per se violation of a statute regulating the sale of a party’s goods.  See Lane Capital Mgmt. v. Lane Capital Mgmt., 15 F. Supp. 2d 389, 397 (S.D.N.Y. 1998) (rejecting “unlawful use” defense where defendant failed to allege that competent court or government agency had determined that plaintiff violated the securities registration law and failed to show that plaintiff’s conduct constituted a per se violation of the statute); Kellogg Co. v. New Generation Foods, Inc., 6 U.S.P.Q.2d 2045, 2047 (T.T.A.B. 1988).  “[W]hile the illegal use doctrine remains the law, it has been interpreted very narrowly, and in practice, it has not been successfully invoked in a reported (or, as near as we can tell, unreported) Board case for at least thirty years.”  ZAO Gruppa Predpriyatij Ost v. Vosk Int’l Co., Opp. No. 91168423, 2011 TTAB LEXIS 240, at *70 (T.T.A.B. Aug. 9, 2011). 

With all this in mind, consider the landscape in which marijuana businesses operate.  The Controlled Substances Act is the federal statute which prohibits the manufacture, distribution, possession and sale of marijuana, cocaine, heroin and scores of other substances.  21 U.S.C. §801-971.  If this were the end of the story, there would be no question that the USPTO would reject an application covering the sale or distribution of medical or recreational marijuana.  But the Controlled Substances Act is not the only law in the land.

It has long been the case that federal law enforcement dedicated less effort and fewer resources to addressing relatively low-level sale and distribution of marijuana, as compared to cocaine and heroin.  These hands-off practices became more formalized under the Obama administration.  Most notably, memoranda from the United States Department of Justice ("DOJ") established a policy of federal deference to state regulation of marijuana sales and distribution, provided certain criteria were satisfied.  In the most recent memo dated August 29, 2013, the DOJ identified 8 core objectives that it had followed for years to determine when to prosecute the sale and distribution of marijuana and when to leave such prosecution to state law enforcement. The 8 objectives are:

(1)        Preventing the distribution of marijuana to minors;

(2)        Preventing revenue from the sale of marijuana from going to criminal enterprises, gangs, and cartels;

(3)        Preventing the diversion of marijuana from states where it is legal under state law in some form to other states;

(4)        Preventing state-authorized marijuana activity from being used as a cover or pretext for the trafficking of other illegal drugs or other illegal activity;

(5)        Preventing violence and the use of firearms in the cultivation and distribution of marijuana;

(6)        Preventing drugged driving and the exacerbation of other adverse public health consequences associated with marijuana use;

(7)        Preventing the growing of marijuana on public lands and the attendant public safety and environmental dangers posed by marijuana production on public lands; and

(8)        Preventing marijuana possession or use on federal property.

http://www.justice.gov/iso/opa/resources/3052013829132756857467.pdf

The DOJ memo set forth a policy of not prosecuting marijuana distributors (a) if they were operating within a state that adopted and enforced effective laws that satisfied the 8 core objectives and (b) if the conduct at issue did not, in fact, interfere with these 8 objectives.

As a result, medical marijuana has been “legalized” in more than half the states and even recreational marijuana has been “legalized” in some.  This patchwork of marijuana policies has created remarkable business opportunities, but presents unique challenges to those who want to avail themselves of those opportunities and participate in the emerging marijuana economy. [2]

II. Marijuana Related Trademarks

 For many companies, particularly those dealing in consumer goods or offering retail services, their brands and trademarks are their most valuable assets.  And companies catering to the marijuana counterculture have aggressively and successfully protected their trademarks.  Patent Trademark & Copyright Law Daily Daily Briefing: ‘Marley Natural,’ Ranbaxy, Apple, Patent Trademark & Copyright Law Daily (BNA) (November 20, 2014).

For example, Trans-High Corporation, the publisher of HIGH TIMES magazine[3] owns 22 federal trademark registrations in the U.S. alone for scores of goods and services. 

Some of the goods and services for which HIGH TIMES has been registered clearly relate only tangentially to marijuana.  Others more directly relate to marijuana and the decades-old debate over its legalization, virtues and history.  But until recently, none would be implicated by even the most aggressive enforcement of the Controlled Substances Act.

The same could not be said for trademarks used in connection with the sale or distribution of marijuana.  Comprehensive and aggressive enforcement of the Controlled Substances Act would clearly result in a crack-down on such activities.  From a trademark registration perspective, could marks used in connection with marijuana goods or services be said to be used lawfully in commerce?

In the patchwork world of state legalization, billions of dollars are being invested in legitimate marijuana distribution businesses that are following the letter of state law, while the ability of these businesses to fortify and protect their brands in the USPTO is uncertain.   Does "lawful use" embrace or exclude use that fully complies with state law, that fully satisfies the Department of Justice’s 8 objectives, but nonetheless runs afoul of the currently neutered Controlled Substances Act?  This is the billion dollar question with which the USPTO and private enterprise will wrestle over the next several years.   

Speculation aside, businesses entering the marijuana economy at the moment are faced with unique challenges in crafting a trademark strategy.

III. Why Does Federal Trademark Registrations Matter?

We know that if you are the first to use a mark in the United States, the general rule is that you have common law rights in that mark for the goods and services for which you use that mark.  And we know that with such rights established, you can prevent others from using that mark on or in connection with the same or similar goods or services.  So why should you care if the USPTO refuses to register your mark for the sale or distribution of marijuana?  There are several reasons.

First, common law rights are limited to the geographic area in which the mark has actually been used or to which you might naturally expand, while a federal trademark registration grants rights throughout the entire country.[4]  So a brand owner with only common law rights can find itself in an ongoing land rush to establish and re-establish its rights in new states as the march toward marijuana reform continues across the country.  In contrast, a federal trademark registration would, if available, establish the rights coast-to-coast once and for all.

Second, there are remedies and resources available to a federal trademark registrant that are not available to those with only common law rights.  For example, the federal anti-counterfeiting statutes permit the recovery of treble damages, statutory damages, attorney’s fees and even the cooperation of law enforcement in confiscating counterfeits and prosecuting pirates.  Obviously these remedies and resources would make a successful lawsuit all the more rewarding.  Even the simple threat of a counterfeiting claim can do wonders to bring about early settlement of a litigation or even pre-litigation resolution of a potential trademark dispute.  But only federal trademark registrants can bring federal anti-counterfeiting cases.[5]

Third, federal registrations carry with them evidentiary presumptions which could make the costly, burdensome, and unpredictable world of litigation a little less expensive, disruptive and uncertain.

Finally, even absent a counterfeiting threat, the invocation of a federal trademark registration may cause infringers to take your demand letters more seriously.

These are not the only advantages of a federal registration, but they are among the most significant.

IV. Pursuing a Federal Registration 

While the issues surrounding marijuana marks wind their way through the USPTO and the courts, there are billions of dollars that will not wait on the sidelines of the marijuana economy.   So how can you protect your brand in this uncertain trademark environment?

You may want to take your chances with a USPTO application since the future is uncertain and the cost of filing a federal application is relatively modest.  A carefully crafted trademark application – and well-presented arguments when initially rejected, have proven to be successful in the author’s experience.

A. Challenges of Federal Registration

 Even though the USPTO has issued trademarks for goods/services tangentially related to marijuana, the closer the description of goods/services is to sale or distribution of marijuana, the less likely it is that the USPTO will allow the application.  Below are examples of marijuana related marks that the Trademark Trial and Appeal Board ("TTAB") has rejected.

  • HERBAL ACCESS & Design mark in connection with "retail store services featuring herbs" was rejected by TTAB on the ground that the mark was being used in connection with the illegal sale of a substance (marijuana) in violation of the federal Controlled Substances Act ("CSA"). In In re Brown, 119 USPQ2d 1350, 1351(TTAB July 14, 2016).
  • POWERED BY JUJU and JUJU JOINTS for smokeless marijuana vaporizers were rejected by TTAB on the ground that the identified goods are illegal under the CSA and therefore use of the marks in commerce is unlawful. Applicant maintained that it does business only in states where marijuana is legal, and those jurisdictions comply with the Cole Memo. TTTAB, however, ruled that the CSA controls. In re JJ206, LLC, 120 U.S.P.Q.2d 1568, 1569-70 (TTAB Oct. 27, 2016).
  • PARIS OG KUSH INDICA and HARDCORE OG KUSH INDICA were rejected because TTAB found the marks to be deceptively misdescriptive of "medicinal herbs." Applicant stated that his goods "are not marijuana" and "are not derivative of marijuana in any way." However, PARIS OG, OG KUSH, HARDCORE OG, and INDICA are all descriptive of strains of marijuana. In re Sharnazyan, 2016 TTAB Lexis 416 4-5 (Aug. 30, 2016).

B. Register Around the Edges

 If you are selling goods or offering services that clearly run afoul of the Controlled Substances Act, it is very likely that you are also selling goods or offering services that fall outside the restrictions of the CSA.  As a practical matter, if you can secure a registration for those peripheral goods and services, you may well be able to keep others from infringing your marks even in connection with CSA-prohibited goods and services.  So, for example, if you intend to open a medical marijuana dispensary under the mark CRAZY JANEY, you may also offer in connection with that dispensary written or online information regarding the benefits of marijuana, or the social and medical justifications for the legalization of marijuana.  You could apply to register your CRAZY JANEY mark at least for such online or written marijuana-related materials.  Likewise, it you intend to make and sell marijuana-infused baked goods, perhaps you will also make and sell under the same trademark such baked goods without marijuana as an ingredient.  You could apply to register your CRAZY JANEY mark for those.  The same would be true if you wanted to sell marijuana seeds, but also planned to sell other plant, flower or tree seeds. 

But what happens when an infringer against whom you invoke your CRAZY JANEY registration covering “brownies” seeks to cancel that registration arguing that your use of CRAZY JANEY for marijuana-infused muffins is an unlawful use in commerce warranting cancellation of the brownies registration.  In such a case, if you were in fact using that mark for brownies that did not contain marijuana, i.e. lawful brownies, the counterclaim to cancel your registration should be dismissed.  This is because in order to be legally cognizable, a claim seeking to cancel a federal trademark registration based upon “unlawful use” must allege unlawfulness as to the registered goods or services.  See 37 C.F.R. § 269 (USPTO may inquire as to compliance with federal statute with regard to “the sale or transportation of any product for which registration of a trademark is sought”) (emphasis added); accord General Mills, Inc. v. Health Valley Foods, 24 U.S.P.Q.2d 1270, 1273 (T.T.A.B. 1992) (assessing, and ultimately rejecting, “unlawful use” claim seeking to cancel FIBER ONE registration for “ready to eat breakfast cereal” based upon allegations that opposer’s initial shipments of cereal did not comply with F.D.A. labeling requirements).  This rule as to the “lawful use” requirement flows from the overarching requirement that cancellation claims asserted in federal court under 15 U.S.C. § 1119 necessarily must target the trademark owner’s use of the mark in connection with the specific goods or services upon which the registration was obtained.  See, e.g., DC Labs Inc. v. Celebrity Signatures Int’l, Inc., No. 12-CV-01454 BEN (DHB), 2013 U.S. Dist. LEXIS 110752, at *7 (S.D. Cal. Aug. 6, 2013) (“partial cancellation [under 15 U.S.C. § 1119] is legally possible for abandonment of a specific good listed in the registration”) (emphasis added).  Similarly, the statute governing petitions to cancel in the Trademark Trial and Appeal Board, 15 U.S.C. § 1064, makes clear that such claims must be tied to the registered goods or services.  See, e.g., 15 U.S.C. § 1064(3) (a registration can be cancelled at any time “if the registered mark becomes the generic name for the goods or services, or a portion thereof, for which it is registered”) (emphasis added). 

C. Declare Your Intentions

The legal landscape is shifting quickly when it comes to marijuana.  Perhaps within the time it could take an intent-to-use application to reach its final deadline to file a statement of use, marijuana will no longer be regulated under the Controlled Substances Act.  That being the case, perhaps the owner of a medical marijuana dispensary who files an application for “lawful medical marijuana dispensary services” today will find itself in a position of keeping that application alive long enough to see a registration issue, if and when the current conflict between federal prohibition and state regulation is resolved in such a way as to make those services lawful even under the CSA.  Under such a strategy, one would argue that the goods listed in the registration are undeniably, by their terms, lawful and therefore immune from examiner’s refusal, and that the USPTO must allow the applicant the full 36 months from Notice of Allowance to make use of the subject mark for the applied-for services.

This is exactly the argument used in connection with Application Serial Number 86/278,759 for the mark CANNABIS CUP, owned by Trans-High Corporation, the publisher of HIGH TIMES magazine.  The application for CANNABIS CUP was filed in May 2014 for “Bakery goods and dessert items, namely, cakes, cookies, pastries and brownies for retail and wholesale distribution and consumption on or off the premises” in Class 30, “Plant seeds, Dried flowers; Natural plants and flowers” in Class 31 and “Wholesale and Retail store services featuring bakery goods and dessert items, namely, cakes, cookies, pastries and brownies, plant seeds, dried flowers; natural plants and flowers” in Class 35. Connecting the dots between the mark, (i.e. “Cannabis Cup”), and the goods and services, (i.e., plants, seeds and baked goods), the USPTO rejected the application as covering unlawful goods and services.  In response, the identifications of goods and services were amended to include the word “lawful” (e.g., “lawful plant seeds, dried flowers”). The USPTO deemed this amendment insufficient and issued a second Office Action specifically asking whether the goods and services would include or contain marijuana or any other controlled substances and also whether they would be lawful under the federal Controlled Subtances Act. The examiner also objected that the modifier “lawful” in the descriptions of goods and services left unanswered the question of whether the goods and services would be “lawful” under just state law, or under both state and federal law.  In response to this second Office Action, Applicant stated that it intends to sell, for example,  both bakery goods containing marijuana and bakery goods not containing marijuana and that it intends that all of its goods and services will be lawful pursuant to the Controlled Substance Act at the time it files its statement of use and submits evidence of use. It also amended the descriptions of goods and services to (a) break out those that would contain or pertain to marijuana, and those that would not and (b) to clarify that such applied-for goods and services would be lawful under both state and federal law. For example, the Class 31 description became “plant seeds, dried flowers; natural plants and flowers all of the foregoing being lawful under both state and federal law, and plant seeds, dried flowers; natural plants and flowers none of the foregoing comprising or containing marijuana, hemp, cannabis or derivatives, extracts or synthetic iterations of marijuana, hemp or cannabis.” Following this response, another rejection issued that stated that ‘if the items or activities with which a mark is intended to be used are prohibited by law, then actual lawful use in commerce will not be possible and there can be no bona fide intent to lawfully use the mark in commerce.”

In its response to the third Office Action, Applicant framed the issue thus:

The question confronted is not whether the goods and services at issue here are lawful, but rather whether they exist.  And since they do not currently exist, should the Applicant be afforded the customary Allowance period for them to come into existence and for Applicant to use its mark with them in commerce?

 In essence, Applicant was proposing that where an intent-to-use application unequivocally concedes that only lawful goods and services will be protected by a resulting registration, the USPTO may not reject that application based on the lawful use in commerce requirement.  Rather than paraphrase, the author will quote below the arguments contained in the May 2, 2016 Office Action Response. 

The Examining Attorney explains [his] refusal by positing that “applicant does not have a bona fide intent to lawfully use the applied-for mark in commerce.”  This statement is simply untrue.  By the very terms of the goods and services descriptions set forth above, Applicant’s intent is to make use of the CANNABIS CUP mark in connection with goods and services “lawful under both state and federal law.”  Applicant concedes that the goods and services for which it seeks registration do not, at the moment, exist.  This is because the goods and services for which Applicant seeks registration are lawful under state law but the current treatment of marijuana under the Controlled Substance Act makes them unlawful under federal law at this moment.  Just as applicants who are developing new technologies, ones that do not yet exist, are granted Notices of Allowance and given the opportunity to perfect their registrations if they can bring their products to market during the allowance period, so too should Applicant be given the opportunity to stake its claim to this mark.  If the subject goods and services come to exist within the Allowance period, Applicant could then be granted a registration.   But if those goods and services do not come to exist, then Applicant would suffer the loss of its investment in the application when it lapses.

 When the examining attorney writes “for purposes of this refusal, the goods must be lawful under federal law as of this date” he is presumably making reference to the goods which are the subject of this application.  That being the case, Applicant respectfully points out that the goods for which it is applying are, on their face and by definition, lawful (though non-existent) as of this date in that the very descriptions include the language “lawful under both state and federal law.”  The only question is whether such goods and services will come to exist in time for Applicant to file its Statement of Use and Specimen.

 The examining attorney observes that applicant’s expectation that the goods and services for which it is applying will exist within the timeframe for an allegation of use “does not make this application registrable.”  To the extent he means, such expectations do not make the application registrable today, Applicant agrees.  The mark is not registrable today, and will not be registrable until Applicant can file a Statement of Use and submit a specimen.  Applicant simply wants to be given the same opportunity to do so that other applicants seeking registration for currently non-existing goods or services are given.

 When the examining attorney writes “Applicant cannot have a bona fide intent to use a mark on unlawful goods,” Applicant respectfully points out that it is not seeking a registration covering unlawful goods.  As the descriptions of goods and services unequivocally state, the application is for goods and services “lawful under both state and federal law.”

 When the examining attorney writes that the “the applied-for mark as used in connection with such goods and/or services cannot be in lawful use in commerce” Applicant would agree to the extent we are discussing what is lawful today, but would respectfully disagree to the extent we are talking about the state of the law within the allowance period.

The Office Action response also included the following public policy argument.

There are strong policy reasons why the USPTO should be taking steps preparing for and favoring the potential for national trademark rights in the cannabis industry.

From a public health perspective, if and when marijuana is legal under federal law, national protection of marks used for marijuana will reduce the risk that different entities will sell different marijuana strains with different strength or attributes in different states under the same trademark thus exposing consumers who travel to the risk of unpredictable purchasing and consuming experiences.

From an economic perspective, the public would be well-served by giving all those who are investing in the fledgling medical marijuana industry the opportunity protect their brand investments by staking (though not yet perfecting) their  claim in the marks they intend to use just as those in other industries are given such opportunities.  Under the Examining Attorney’s approach to intent-to-use marijuana marks, the only protection available to fledgling medical marijuana businesses would be either at common law, which would be limited to the geographic areas in which the mark had actually been used, or through state registrations , which would likewise be limited to the states in which the mark was actually used since the state registration system does not recognize intent-to-use applications.  Under both scenarios, the business entrepreneurs will be engaged in land grabs whereby the first user in one state who develops a brand that becomes popular can only hope it makes it to other states before the competition.  The problem is exacerbated by the licensing requirements and realities whereby a successful medical marijuana dispensary in Connecticut, for example, may not secure a license for Virginia if and when Virginia legalizes medical marijuana and thus will be unable to prevent others from using its mark in Virginia, notwithstanding its earlier success in Connecticut and notoriety throughout the country.  The patchwork of trademark rights that would be created by such a system will have long-lasting negative effects on commerce and on consumers who will be exposed to different entities selling different strains of marijuana under the same mark.

If, on the other hand, those adopting marks for use in connection with medical marijuana were able to maintain an intent to use application in the United States Patent and Trademark Office pending the likely amendment of the Controlled Substances Act, then at least such applicants could put competitors on notice of their intent to use the mark nationally and could establish a constructive first use date.

Applicant is not arguing in favor of registering today marks covering goods or services that are unlawful today.  Rather, applicant is urging the USPTO to adhere to a pragmatic, forward-looking approach that reconciles the lawful use in commerce requirement with the very real possibility that marijuana, medical or otherwise, could become lawful under federal law in the near future.  Specifically, applicant is asking that when the goods and services description unequivocally and explicitly is limited to lawful goods and services, the applicant should be given the opportunity to bear the burden of filing an appropriate statement of use and specimen supporting a registration within the allowance period.

Trans-High’s intention is to use the marks on and in connection with federally lawful marijuana products and services and this intention is based on the belief that within the next three years marijuana will either be removed from the list of controlled substances or at least moved to a schedule other than Schedule 1.  By analogy, if a manufacturer of medical devices applied to register a mark covering a technology that does not yet exist but is in development, the USPTO would issue a Notice of Allowance thus giving the medical device manufacturer 3 years to “put up or shut up” so to speak.  Trans-High, which is asking for nothing more than the opportunity to make use of its mark in connection with currently non-existent federally lawful goods and services, should be given nothing less than that same opportunity.

Shortly after this response was filed, the Application was published for opposition and on August 23, 2016, a Notice of Allowance issued.

You Miss 100% of the Shots You Don’t Take.  Even though the USPTO may never issue trademark registrations for marks used to indicate the source for marijuana or marijuana products or distribution services, you never know.  Since the future is uncertain, and since the filing of an intent-to-use application gives you a priority date as of the application filing date, you may want to consider the USPTO route.  Of course, your filing-date priority does not become effective until you use your mark and a registration issues.  But in the meantime, those who encounter your pending application while conducting their own trademark searches may decide to avoid your mark and chose another one.  Or the USPTO may cite your mark against applications to register similar marks that come after yours.

V. Alternatives to Federal Registration

Whether or not you pursue federal trademark registration, you also should proceed wisely within the common law and state law frameworks so you can protect your trademarks against competitors in your geographic area even if you can’t secure a federal trademark registration.  Below are some practical suggestions.

A. Clear Your Marks

Just as you can develop trademark rights without filing a federal trademark application, those who have come before you can too.  You are not free to simply choose a mark you like and start using it.  If someone else used or applied to register a mark before you, then they are the trademark owner and you are the infringer.[6]  So before you begin using a mark, you should have a search done to see whether anyone has already used or applied to register your mark or one confusingly similar to it. 

B. Common Law Rights

Once you have selected and cleared your mark, start using it.  By using your mark in commerce as a source identifier, you will develop common law rights in that mark.  Such rights will give you exclusive control over your mark and enable you to stop infringers.  But note, your common law rights will be only so broad as the geographic scope of your use.  If you are using your mark only locally within one or two states, your rights will be limited to those one or two states.  So you would be well-advised to sell your goods or offer your services as broadly as legally and practically possible as soon as possible. 

C. State Registration

USPTO registration aside, those states in which marijuana and marijuana distribution services has been legalized probably will grant trademark registrations.  So you should consider developing a patch-work of state registrations.  The one significant shortcoming of the state trademark system is that none of the states will accept intent-to-use applications.  You must wait until you have actually begun use in a state before you can apply to register your mark in that state.  At best, this will be an inconvenience.  At worst, it will create land rush after land rush as additional states adopt laws permitting the growth, sale and use of marijuana. 

D. Copyright Protection

Copyright protection can serve as an alternative route to protecting your logo or design mark. Copyright law does not extend protection to a word or phrase, such as a business name, however, it does extend protection to original works of art, which can include your artistic logo or design mark.  Though copyright protection exists from the moment a work is created, register your logos with the United States Copyright Office.  You will be eligible to recover statutory damages and attorney's fees if you have to bring an infringement action and prevail. 

VI. Conclusion

The current tension between federal and state laws regulating marijuana businesses and the fast-changing political and social forces have created an uncertain legal terrain for federal trademark registrations.  Nonetheless, there are steps you can take to maximize the protection of your marijuana business trademarks.

[1] Currently more than half the  states and the District of Columbia have legalized medical marijuana.  Another handful have legalized recreational marijuana.

[2] For example, such businesses will face hurdles opening bank accounts, renting space for their businesses, and establishing relationships with credit card companies.

[3] The author has represented Trans-High, the publisher of HIGH TIMES,  in litigation and in connection with its trademark program since 1998.

[4] Some may argue that this alone justifies a USPTO policy of refusing to register marks for marijuana or marijuana distribution, i.e., since marijuana is wholly illegal in more than half the country, it is improper for the USPTO to grant national rights for the use of a mark in connection with the sale or distribution of marijuana.  But doesn’t the USPTO already issue registrations covering goods that are illegal in some or even nearly all, states.  Think of “Caesars” for casino services, “Fuzzbuster” for radar detectors, “BlackCat” for consumer fireworks and “Mustang Ranch” for prostitution and brothel services.

[5] State registrations can be used as the basis for a state counterfeiting case, but not a federal one.

[6] Of course infringement requires that not just the mark be confusingly similar, but also the goods and services be similar or related.

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