Marijuana has now been “legalized” in one form or another by almost 30 states. While, marijuana remains illegal under federal law, many folks feel the train has left the station for the legalization of marijuana. However, that train clearly has not reached the end of the line.
Responding to these state efforts, marijuana has become one of the hottest new industries for business growth and investment. However, marijuana businesses are hitting a major roadblock when it comes to creating and protecting their brands. This roadblock stems from the United States Trademark Office’s inability to grant trademark protection for anything that is not lawfully used in interstate commerce. Any trademarks on marijuana products are routinely refused.
Regardless of state law, marijuana and its psychoactive components, THC and CBD, remain classified as Schedule I controlled substances under federal law and are subject to the Controlled Substances Act’s (“CSA’s”) prohibitions. [1] Subject to certain limited statutory exceptions, the CSA makes it unlawful to manufacture, distribute or dispense a controlled substance; possess a Schedule I controlled substance; or sell, offer for sale or use any facility of interstate commerce to transport drug paraphernalia, [2] and on this basis the US Trademark Office regulations also prevent registration of trademarks for cannabis products.[3]
On August 29, 2013, the United States Department of Justice issued a Memorandum for All United States Attorneys providing “Guidance Regarding Marijuana Enforcement” (the “2013 Cole Memorandum”). One of the directives of the 2013 Cole Memorandum is to prevent “the diversion of marijuana from states where it is legal under state law in some form to other states.” Applying this directive of federal law, even though marijuana commerce may be allowed to occur to some level within various states, marijuana clearly cannot be transported across state lines. Therefore, regardless of the circumstances within a state, marijuana is precluded from being used in lawful interstate commerce. Use of a trademark in interstate commerce is a clear requirement for federal trademark registration.
So, if you want to “brand your bud,” you are going to have to find some creative strategies to protect your brand without clear federal trademark protection being available.
The Legal Marijuana Industry Skyrockets
According to Matthew Karnes, founder of the marijuana financial consultancy GreenWave Advisors, the legal marijuana industry in the U.S. will grow from $6.5 billion to $30 billion in the next five years. Marketing dollars for the legal marijuana industry are estimated to top $75 million. Imagine spending five to six-figures on marketing campaigns that you cannot fully protect.
Marijuana Brand Protection is Consistently Denied by the US Trademark Office
The US Trademark Office continues to deny trademark protection to owners seeking to protect brands selling marijuana. Recently, the Trademark Office denied protection for two marks sought by JUJU Joints, a company that develops pre-loaded cannabis oil devices.
JUJU Joints sought to use their trademarks in commerce for classes of goods like smokeless cannabis-vaporizing apparatuses and cannabis delivery devices. However, the US Trademark Office denied the applications on the basis that “Applicant’s identified goods constitute illegal drug paraphernalia under the [Controlled Substances Act].” [4]
Last year, the Trademark Office also denied registration to “Herbal Access” for “retail store services featuring herbs.” The Trademark Office saw evidence that the company was selling marijuana. Specifically, the required specimens supporting the trademark application for the Herbal Access trademark showed photographs of a green cross on the front of the premises and the applicant’s website home page clearly showed them to be selling marijuana.
Despite arguing that the company would be using the mark for activities that are legal under federal law, the Trademark Examining Attorney, and then the Trademark Trial and Appeal Board, found evidence to the contrary and refused registration. [5] It probably did not help that the attorney arguing the case for the Applicant had fallen on some disrepute with the Trademark Office and has since resigned from practicing before the Trademark Office. [6]
Finally, using the Brown and the JUJU Joints cases as precedent, the Trademark Office has also recently refused trademark registrations for marks that are used with products which might be considered “illegal drug paraphernalia” within the meaning of Section 863 of the CSA. [7] In considering the registration of “Ultra Trimmer” for “agricultural machines, namely, a trimming machine for trimming leaves, plants, flowers and buds,” the Trademark Office found that even if the identified goods are not “per se illegal,” the Examining Attorney may look for extrinsic evidence (i.e., evidence outside of the record provided by the Applicant) showing that the product serve an illegal purpose. [8]
Brand Protection Work-Arounds
Despite the rulings in these cases, many attorneys working with marijuana-related trademarks try to come up with alternative strategies to gain some level of protection for these types of marks while federal law catches up with the rest of society. As the marijuana industry transitions from an underground movement to a billion-dollar industry and brands obtain significant consumer recognition driving sales, infringements are sure to follow. A smart business should be seeking to obtain whatever protection it can find to protect its marketing efforts and hard-earned good will with its customers.
First and foremost, at Sherman IP, we advise all clients to claim protection to their brands under common law trademark rights. You do this by simply applying the “TM” symbol to the name, logo or slogan that you want to claim as your brand. This gives the world notice that you consider your brand to be your property and they should as well. Regardless of whether you can get the rights to use a federal registration symbol “®”, you should still be using the “TM” symbol with your name or logo showing that you are claiming common law trademark rights in your brand.
Another strategy that is applied is that while cannabis-containing and cannabis-related products cannot be protected under federal (and many state) trademark laws, generally products that have primary use outside of the marijuana industry may be protected.
For example, in the Ultra Trimmer case, one can only speculate what would have happened if the identification of goods read, “agricultural machines, namely, a trimming machine for trimming leaves, plants, and flowers,” and the specimens showed the product being used on plants other than marijuana. While a simple view of Ultra Trimmer’s website shows that its primary workpiece is clearly marijuana, one can only wonder whether other product markets are available to it and if the product had been displayed used on other herbs and plants, would federal trademark protection have been available. The fact that a product might also be used with marijuana-related purposes should not then render a trademark un-registerable.
While somewhat risky, this strategy could be used for protection of products like: pipes, bongs, vaping devices, grinders, rolling papers, apparel, and lozenges (not containing THC). As long as those products have uses unrelated to marijuana, then they should be able to obtain federal trademark protection for those legal uses.
A third strategy which has been used by some companies is to seek protection for trademarks associated with simply providing information, such as the medical benefits of marijuana and its constituents. Those applicants are not seeking protection for the sale of marijuana, but merely the delivery of information about marijuana.
By obtaining protection for these ancillary products and services, trademark attorneys and their clients hope that this can serve a couple of goals:
- Sending up a red flag to competitors that this company may also be operating in the medical or recreational marijuana space; and
- That if, and when, the federal laws change to allow cannabis products to be trademark-protected, these companies will be first in line to expand their pre-existing trademark protections.
If the laws do change to allow THC-containing products to be protected, those companies that had the forethought to file for trademark protection for ancillary products should receive protection under the “zone of natural expansion” doctrine.
Under the zone of natural expansion doctrine, “a trademark owner should be given rights in its trademark, not only for the goods it actually sells but for all product markets into which it might reasonably be expected to expand in the future.” [9] This has been the case for countless trademark holders in other markets. For example, a company that has trademark protection for toothpaste, like Colgate may be protected from someone else coming into the market wanting to use that trademark for mouthwash. Under the zone of natural expansion theory, Colgate could argue that its’ trademark on toothpaste also prohibits this new company to market their mouthwash under the Colgate name because people would expect that a toothpaste company might also sell a mouthwash. Likewise, using a trademark on a non-marijuana related product, like a vaporizer that can be used for tobacco products.
State Registrations
Most people don’t realize that the United States also has a dual trademark registration system; one at the state level and one at the federal level. While a federal trademark registration provides much more wide-ranging and broader protection than a state trademark registration, a state registration may be available to offer some protection within a state where a level of marijuana sales and usage has been authorized by that state and the state allows for trademark protection for marijuana related products. The California legislature recently introduced Assembly Bill 64 which would allow state protection of marijuana-related trademarks. Colorado and Washington states both already allow marijuana-related trademarks at the state level.
It is unlikely that federal law will open the door to the unrestricted interstate transportation of marijuana anytime soon. More likely, a next step at the federal level may be the lowering of marijuana from Schedule 1 of the CSA. Since most marijuana products have to relate to in-state manufacture and/or sales, an effective strategy for those marijuana businesses would be to seek protection on their state’s trademark register, if their state allows for such protection. For businesses that operate in many states, the cost of seeking multiple state protection could become more cost prohibitive.
Federal Copyright Protection
Another strategy that Sherman IP is suggesting to our clients in marijuana-related industries is to seek to register a copyright upon their unique logos, wrappers, and packaging. There is often a significant level of creative energy which goes into developing these pieces. The benefits are: 1) the United States Copyright Office does not check where and on what type of product the logo is being used; 2) the Copyright Office is not as antagonistic as the Trademark Office towards the marijuana industry, they basically let all works of art register; and 3) enforcement of the copyrighted logo focuses on infringement of the logo itself and not the goods/services to which the logo is affixed. In that way, a marijuana company could still avail themselves of the protection against knock-offs across state lines.
The Take-Away
If you are in the marijuana business or are thinking about it, you need to take steps now to protect your brand. This can be done with careful planning through a coordinated approach using thoughtful federal trademark protection where concurrent uses can be shown for non-marijuana products and services, at the state level where you may be operating, or even at the United States Copyright Office. At Sherman IP, your experienced trademark attorney can discuss different strategies that may help overcome foreseeable issues with your trademark application. To learn more about filing a new trademark application with our firm, please visit:
[1] See 21 C.F.R. §1308.11; see U.S. Const. Art. VI. Cl. 2; Gonzales v. Raich, 545 U.S. 1, 27, 29 (2005); United States v. Oakland Cannabis Buyers’ Coop., 532 U.S. 483, 491 (2001).
[2] See 21 U.S.C. §§ 812(b)(1)(B), 841(a)(1), 844(a), 863.
[3] TMEP 907; 37 C.F.R. §2.69, In re JJ206, LLC, 120 USPQ2d at 1571; In re Brown, 119 USPQ2d at 1352.
[4] In Re JJ206, LLC, 120 USPQ2d 1568 (TTAB 2016).
[5] In Re Brown, 119 USPQ2d 1350 (TTAB 2016).
[6] In Re Swyers, USPTO Proceeding D2016-20.
[7] 21 U.S.C. § 863.
[8] In Re Ultra Trimmer, 2016 TTAB LEXIS 563 (TTAB 2016).
[9] McCarthy on Trademarks and Unfair Competition, §24:17 (4th ed. 2008)