Ensuring brand or trademark protection is a top priority for businesses in any industry. However, the marijuana industry faces unique challenges due to the dichotomy between state-level legality and federal restrictions. As more states legalize recreational and medical marijuana, the eventual nationwide acceptance of marijuana and cannabis-derived products seems inevitable. Nevertheless, the current regulatory landscape presents obstacles for marijuana companies seeking to register and protect their trademarks.
Federal Trademark Restrictions for Marijuana Products
At present, registering trademarks for marijuana products with the U.S. Patent and Trademark Office (USPTO) is not permitted due to prohibition under federal law, regardless of the legality of the activities under state law. This law prohibits the registration of products that cannot be lawfully sold across state lines in the United States. The Controlled Substances Act (CSA) classifies marijuana as a controlled substance, which means its sale across state lines is prohibited. Consequently, the USPTO rejects trademark applications for marijuana products, citing the applicant’s inability to demonstrate a bona fide intent to use the mark lawfully in commerce.
When trademark applications recite services involving cannabis-related activities, they will be examined for compliance with the Controlled Substances Act (CSA) and the 2018 Farm Bill. The CSA prohibits, among other things, manufacturing, distributing, dispensing, or possessing cannabis that meets the definition of marijuana. Therefore, the USPTO will continue to refuse registration when the identified services in an application involve cannabis that meets the definition of marijuana and encompass activities prohibited under the CSA because such services still violate federal law. If the identified services involve cannabis that is “hemp” (i.e., contains less than 0.3% THC), the applications will also be examined for compliance with the requirements of the 2018 Farm Bill.
Evidence indicating that the identified goods or services involve the sale or transportation of a controlled substance or drug paraphernalia in violation of the Controlled Substances Act (CSA), 21 U.S.C. §§801-971, would be a basis for issuing an inquiry or refusal. See In re JJ206, LLC, 120 USPQ2d at 1569-70; In re Brown, 119 USPQ2d at 1351-53. 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 or offer for sale drug paraphernalia, or use any facility of interstate commerce to transport such drug paraphernalia. See 21 U.S.C. §§812(b)(1)(B), 841(a)(1), 844(a), 863. Note that, regardless of state law, marijuana and marijuana extracts remain Schedule I controlled substances under federal law and are subject to the CSA’s prohibitions. 21 C.F.R. §1308.11; see U.S. Const. Art. VI. Cl. 2; Gonzales v. Raich, 545 U.S. 1, 27, 29 (2005); U.S. v. Oakland Cannabis Buyers’ Coop., 532 U.S. 483, 491 (2001); In re JJ206, LLC, 120 USPQ2d at 1571; In re Brown, 119 USPQ2d at 1352 . These prohibitions apply with equal force to the distribution and dispensing of medical marijuana. In re PharmaCann LLC , 123 USPQ2d at 1126 .
The Agriculture Improvement Act of 2018, Pub. L. 115-334 (the 2018 Farm Bill), which amends the Agricultural Marketing Act of 1946 (AMA), removed “hemp” from the CSA’s definition of marijuana. Hemp is defined under the 2018 Farm Bill to include any cannabis plant, or derivative thereof, that contains not more than 0.3 percent delta-9 tetrahydrocannabinol (THC) on a dry-weight basis. Thus, “hemp,” as defined in the 2018 Farm Bill, is not a controlled substance under the CSA. However, the inclusion of certain hemp extracts in goods may still be unlawful under other federal statutes, including the Food Drug and Cosmetic Act (FDCA). See 21 U.S.C. §331(II); see also In re Stanley Bros. Soc. Enters., LLC, 2020 USPQ2d 10658, at *12.
Trademark Protection Alternatives for Marijuana Brands
Despite these federal limitations, marijuana brand owners can adopt certain strategies to protect their trademarks within the existing legal framework:
State-Based Trademark Registrations: Companies can seek state-level trademark registrations in states where cannabis is legal. While state registrations may not offer the same comprehensive protection as federal ones, they can prevent local competitors from using confusingly similar brand names within that state. This approach helps establish a brand presence in the local market and provides some level of protection against infringement within that jurisdiction.
Federal Trademarks for Non-Cannabis Products and Services: Marijuana companies may still be able to federally register trademarks for non-cannabis-based products and services. For instance, informational websites about marijuana can be registered, as can branded merchandise like shirts and hats, provided they are used to indicate a brand and not just as promotional items. This strategy allows companies to secure federal protection for ancillary products and services related to the cannabis industry.
Development of Complementary Products: Companies can explore the development of non-banned products that complement their main cannabis offerings. By diversifying their product lines, marijuana businesses can enhance their opportunities for federal trademark protection. For instance, producing a line of dried cooking herbs or live plants could work in conjunction with cannabis products. Creating non-THC versions of edibles or tobacco/vaping products branded with the company’s trademark could also be considered. This approach expands the brand’s reach without directly violating federal regulations.
Challenges and Considerations
While these strategies offer potential solutions, they are not without their challenges and considerations:
Ongoing Sales and Resources: Maintaining non-cannabis products for federal trademark protection requires continuous sales and resources, which may strain companies already focused on core cannabis operations. Businesses must strike a balance between diversifying their product lines and allocating resources effectively to safeguard their trademarks.
Risk of Legal Liability: Introducing new product lines outside of the cannabis domain could expose companies to legal liability if there are existing trademarks associated with similar products. Careful research and legal counsel are essential to avoid infringing on existing trademarks and facing potential legal disputes.
Infringement Awareness: Even without federal registration, companies must be vigilant in avoiding trademark infringement claims from third parties. Thoroughly researching existing trademarks before marketing new products is crucial to avoid potential legal conflicts.
Brand protection remains a critical aspect of success in the marijuana industry. While federal trademark registration for cannabis products is not currently available, alternative approaches such as state registrations and the development of non-banned products offer avenues to establish and protect trademarks. Companies in this rapidly evolving industry must carefully navigate these strategies to create enduring, safeguarded brands in compliance with existing regulations.
As the legal landscape for marijuana and cannabis-derived products continues to evolve, businesses should stay updated on changing federal and state regulations. Advocacy efforts by the industry and public opinion may lead to reforms that allow federal trademark protection for marijuana products in the future. Until then, marijuana companies must utilize the available strategies to safeguard their brands and trademarks effectively.
Furthermore, collaboration and knowledge-sharing among industry players can help establish best practices for brand protection in the absence of federal recognition. Industry associations and trade groups can play a crucial role in promoting cooperation and collective action to tackle common challenges related to trademarks and brand protection.
Navigating the complexities of trademark protection in the marijuana industry requires creativity, adaptability, and a thorough understanding of current regulations. While federal barriers may exist, businesses can still take proactive steps to safeguard their brands and trademarks. By leveraging state-level registrations, exploring complementary product lines, and being diligent in their research, marijuana companies can build resilient and legally compliant brand identities. As the cannabis industry continues to expand, it is essential for businesses to prioritize brand protection to thrive in this competitive and rapidly changing marketplace.
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