Protection of Marijuana Brands in the United States 

Cannabis Industry Alert

December 21, 2016

Brand protection for companies engaged in marijuana-related businesses continues to present special challenges given the federal prohibition on the sale, distribution, and possession of marijuana under the Controlled Substances Act of 1970, 21 U.S.C. § 801 et. seq. (CSA), and despite the increasing number of states that have legalized the sale and distribution of marijuana for medicinal and/or recreational purposes. This client alert addresses trademark protection for companies in the cannabis industry and suggests strategies to address the limitations imposed on such companies by the current state of the law.

The U.S. Patent and Trademark Office (USPTO) continues to deny federal trademark protection to companies involved in the cannabis industry. As a federal agency, the USPTO requires that use of trademark be a “lawful use in commerce” in order for a registration to be granted. This lawful use requirement has led to the rejection of numerous federal trademark applications for marijuana and/or businesses associated with marijuana given that the sale, distribution, and possession of marijuana remain Class 1 felonies under federal law. Trying to conceal the goods and services provided in connection with a trademark by using an ambiguous identification such as “herbs” is unlikely to fool the USPTO, which looks not only at the identification provided in an application but also other evidence such as submitted specimens and use of the subject mark on an applicant’s website to determine if the mark in an application is used in connection with any unlawful activity.

Companies involved in the cannabis industry that are unable to obtain federal trademark registrations for their key trademarks are unable to take advantage of the enhanced benefits that a federal trademark registration provides. Chief among these benefits is a nationwide priority from the application filing date over parties who later adopt the same or confusingly similar marks anywhere in the United States or file federal applications for such marks. Other important benefits of a federal trademark registration include subject matter jurisdiction in federal courts in the case of infringement, a presumption of validity in infringement actions, use of the registered trademark symbol, use of the registration as a basis for an international trademark application, and registration of the trademark with U.S. Customs.

Cannabis businesses can, however, gain a measure of brand protection through the widespread common law use of their trademarks and through state statutes concerning trademarks, unfair competition and/or deceptive trade practices. In fact, states maintain their own trademark registries and, while such registries do not provide many of the key advantages of federal trademark registration, they can in some states provide registrants with enhanced benefits similar to those available under the Lanham Act including infringer’s profits, attorney’s fees, and treble damages in the case of infringement. Moreover, in most states, a registration provides constructive notice of trademark use in such states. Unfortunately, most states do not allow entities to file an application until they have started using the trademark in their state — which means that a state trademark registration might not be an option in states where the sale of cannabis is not permitted or in states where such entity is not doing business.

In addition to taking advantage of state trademark registrations and laws, cannabis business owners can also take other creative steps to protect their brands. One strategy to consider is the filing of federal trademark registrations for non-CSA-prohibited goods and services. For example, federal trademark applications that reference marijuana, but are used in commerce on lawful products, such as clothing, books or educational services, have been found to be registrable as have trademarks that have a tangential relationship to the marijuana field but do not involve illegal “possession” of the product. It is also important to register various domain names that include your key trademark.

Copyright law is another avenue for gaining a measure of brand protection given that the U.S. Copyright Office does not require lawful use in commerce for its protectable work. Brand owners can, therefore, seek protection for distinctive logos or other artwork under U.S. copyright law. Federal copyright protection has been extended to a variety of marijuana-content works, including cannabis growing guides and cookbooks and brand owners can use their rights under U.S. Copyright Law to protect against third parties that copy and use the same or substantially similar designs. To the extent that such infringing works are used on the internet, brand owners can file complaints with website hosts and a U.S. Copyright Registration often serves as a powerful tool in persuading website host companies to remove quickly infringing webpages.

As a final note, companies in the cannabis industry should make sure to engage an experienced trademark attorney to provide a clearance search and opinion before adopting a trademark and to provide advice regarding the filing of state applications and potentially federal applications. While a trademark search and opinion are recommended for companies in any industry, this is particularly important given the special brand protection and enforcement issues currently facing the cannabis industry. In addition, in order to maintain the value of a trademark once it has been adopted, it is important that companies monitor for infringing uses and take the available steps to enforce their marks against other junior third-party users. Given the evolving nature of the cannabis industry itself, it is also important that brand owners stay informed about changes in law and policy that could impact their brand protection strategies and act appropriately to protect their brands in the face of any such changes. 

Marijuana is still classified as a Schedule I controlled substance by the U.S. Drug Enforcement Agency, and as such it remains a federal crime to grow, sell and/or use marijuana. Any content contained herein is not intended to provide legal advice to assist with violation of any state or federal law.

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If you want to learn more about the issues discussed in this Alert, please contact a member of Cozen O'Connor's Cannabis Industry Team