Businesses rely upon their brands to distinguish their products and services from their competitors. Whether a consumer is looking to book a hotel room, purchase a new laptop, or just buy some orange juice, they can filter out the plethora of options that exist in the marketplace by relying upon his or her knowledge of certain brands within an industry, and the quality and price associated with those particular brands.
Naturally, this concept of goodwill extends to the cannabis industry as well. Consumers regularly distinguish between dispensaries, cultivators, vaporizers, rolling papers, and even mobile apps based upon the brands associated with them. Cannabis-related businesses have an obvious interest in protecting their brands, and ensuring that consumers continue to purchase their particular products and services, and not someone else’s.
With trademark rights, business owners can safeguard their intellectual property, and prevent other businesses from selling similar items under a similar (or identical) brand name. However, just as there are additional hurdles in pretty much every other area of the cannabis industry, so too are there obstacles with respect to obtaining a registered trademark for a cannabis-related business.
Obtaining a Federally Registered Trademark
Technically, from the moment a business starts using its brand name or logo in connection with the sale of its products and/or services, the business may have acquired common law trademark rights for its brand. But common law trademark rights are not exactly ideal, and any business owner would be much better off registering its trademark(s) with the USPTO.
Common law trademarks are usually only enforceable in specific geographic regions, and enforcing a common law trademark can be quite difficult when there is no national registry to rely upon to demonstrate valid and superior ownership. Of course, a common law trademark also does not provide the same advantages that a federally registered trademark does, such as the recovery of treble (triple) damages and attorney’s fees in a lawsuit, as well as the use of the “®” symbol.
While there are clear benefits for businesses in general to obtain federal registration of their trademarks, cannabis-related businesses unfortunately face a significant challenge when it comes to obtaining a federally registered trademark.
Despite the recent legalization of recreational and medical marijuana in various states throughout the country, cannabis is still illegal under federal law. The USPTO, which is an agency of the U.S. Department of Commerce, routinely denies the registration of trademark applications on the grounds that the applied for marks, as used in connection with the goods and/or services identified, are not in “lawful use in commerce”. To qualify for a federal trademark registration, the use of a mark must comply with all applicable federal laws, including the Controlled Substance Act (“CSA”), which prohibits, among other things, manufacturing, distributing, dispensing, or possessing certain controlled substances, including marijuana and marijuana-based preparations. In addition, the CSA makes it unlawful to sell, offer for sale, or use any facility of interstate commerce to transport drug paraphernalia. Thus, if for example, a business filed a trademark application for its cannabis dispensary with the USPTO, there is a substantial likelihood that the application would be denied on the grounds that the goods and/or services were not “lawful”.
However, all is not lost for cannabis-related businesses when it comes to obtaining federally registered trademarks.
There are many ancillary cannabis-related businesses in the industry that do not actually “touch” cannabis, and a lot of these ancillary businesses have successfully obtained federally registered trademarks in connection with their goods and services, which include magazines, software, clothing, accessories, and entertainment services. For example, Weedmaps® and Leafly® recently became registered trademarks with the USPTO in connection with downloadable software, while brands such as Cheeba Chews® (in connection with athletic apparel), PAX2® (in connection with electric vaporizers), and Raw® (in connection with rolling papers) have also obtained federally registered trademarks.
However, it should be noted that in July 2016, the USPTO Trademark Trial and Appeal Board issued a decision affirming a refusal to register an applicant’s mark for use in connection with “retail store services featuring herbs” on the grounds that there was evidence that the applicant’s mark was also being used in connection with the sale of marijuana in violation of federal law. While it remains unsettled as to how this decision will be subsequently interpreted, this decision could potentially create a question as to how “ancillary” a cannabis-related brand must be in order to obtain federal trademark protection.
Nevertheless, for now, if a cannabis-related business is providing ancillary goods and services, it may be able to obtain federal registration for its mark with the USPTO.
Obtaining a State Registered Trademark
If a cannabis-related business is directly involved with cannabis (such as a dispensary or cultivator) and seeks trademark protection in connection with that specific good or service, it may still be able to obtain registration for its trademark on the state level (depending on the state). For example, in states such as Colorado, Nevada, and Washington, marijuana dispensaries and cultivators have successfully obtained state registered trademarks for their brands.
A state registered trademark does not offer the same advantages as a federally registered one, and it is obviously limited to the geographic region of a particular state. Nevertheless, it is still more advantageous to register a trademark for a cannabis-related business with a state registry, as opposed to doing nothing but sitting back and relying upon common law rights.
In short, while there are additional challenges for a cannabis-related business that seeks to register its trademark(s) due to existing laws, a cannabis-related business may still be able to obtain federal or state trademark registration for its brand depending on the types of goods or services that are being provided.
Nima Darouian is an associate attorney at Messner Reeves LLP. He may be contacted at ndarouian@messner.com.
This article is made available for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By using this article, you understand that there is no attorney/client relationship between you and the author of the article. This article should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.
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