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Tuesday, 15 November 2016 18:45

Trademarking and Protecting Marijuana

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Last week marked the tipping point for marijuana legalization in the US. Recreational use is now legal in California, as well as Maine, Nevada, and Massachusetts. Medical use was also approved in historically resistant states including North Dakota, Montana, Arkansas, and Florida. The national cannabis industry as now tripled in size, primarily attributed to California's recent legalization, which could exceed the size of its famed wine businesses, with the market projected to grow to $22 billion in four years, from $7 billion this year in 2016. However, conflicts with federal law still exist, including the ability to protect marijuana branding.

Generally, there are three levels of protection when it comes to protecting the branding or source identifier of a product or service: (1) federal trademark registration; (2) state trademark registration; and (3) common law protection.

1. Federal Trademark Registration

A federal registration provides the strongest and most comprehensive brand protection. However, one requirement for registration of a federal trademark is that the claimed good or service must be in actual and legal use in commerce. Therefore, the USPTO has continuously refused to register marks for use on marijuana, as it remains a Class I drug under the Controlled Substances Act (CSA). Under the CSA, it is unlawful to sell, offer for sale, or transport in interstate commerce any drugs, or drug paraphernalia (defined as any equipment primarily intended or designed for use in ingesting, inhaling, or otherwise introducing into the human body a controlled substance). Two recent TTAB decisions reaffirmed this position, including In re Morgan Brown (TTAB, July 14, 2016) which refused registration for retail services providing marijuana, as well as In re JJ206, LLC, dba JuJu Joints (TTAB, October 27, 2016) which refused registration for marijuana vaporizers.

2. State Trademark Registration 

A state registration is geographically limited to the state of registration; however, because marijuana remains illegal under the CSA, the current best practice may be to file for state protection for the cannabis itself and directly related products or services, in combination with federal protection relating to ancillary (and legal) goods and services. However, while this may work in most states, including Washington, Oregon, and Colorado; California is unique in that it mirrors the federal system. Namely, Cal. Business Code Sec. 14274 provides --

The intent of this chapter is to provide a system of state trademark registration and protection substantially consistent with the federal system of trademark registration and protection under the Trademark Act of 1946 (15 U.S.C. Sec. 1051 et seq.), as amended. To that end, the construction given the federal act should be examined as nonbinding authority for interpreting and construing this chapter.

While nonbinding, the California Secretary of State has generally refused state registrations for cannabis, in order to maintain consistency with the federal office. Whether this position may change after the November 8 vote remains to be seen, but propronents are hopeful.

3. Common Law Rights

Finally, common law trademark protection exists even if a federal or state registration is never filed. However, common law rights are very limited, as it only provides protection within the geographic area of the trademark's use, and would only function if the mark is not confusingly similar and not already in use. Nonetheless, even if registration may not currently be an option, one must be reminded that the first to register does not guarantee priority, as the US follows a first-to-use system. At the very least, it is still wise to suffix brands with the ™ or ℠ symbols in the mean time to provide some notice of potential common law protection.

It may take some time, but cannabis should go the way of speakeasies, something once viewed as wrongful and llegal but later decriminalized and protected. In the interim, budding businesses should employ a variety of federal, state, and common law strategies to protect their branding, and also explore and research other options, such as design and/or utility patent protection, as well as contractual (trade secret) protection, which may potentially cover certain products, services, or valuable information.

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Tony Guo

As a specialized technology counsel, Tony supports his clients in the high tech, creative, and online industries. His primary areas of practice include intellectual property protection, Internet law, and startups. Tony is a USPTO registered patent attorney, as well as a licensed lawyer in California and Florida. He comes from a background involving considerable hardware and software development experience, having worked in both development and IT roles in the tech and finance industries.

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