Register Your California Cannabis Trademarks Now
[This article originally appeared in Law 360 on February 16, 2018.]
Any cannabis business that is holding its breath waiting for the United States Patent and Trademark Office to start registering cannabis-related trademarks should give up. The attorney general’s recent withdrawal of the Cole memorandum sent a clear signal that marijuana will remain a Schedule 1 Controlled Substance for the foreseeable future. Thus the USPTO will not be registering cannabis trademarks any time soon. Cannabis businesses located in the increasing number of states that have legalized medicinal and/or recreational cannabis should immediately seek state trademark registration, where available, instead.
The Federal Door Is Shut — No Cannabis Product Trademarks
The USPTO will only register trademarks relating to commerce “which may lawfully be regulated by Congress.” Specifically the USPTO requires that the “use of a mark in commerce must be lawful use to be the basis for federal registration of the mark.” From In re Morgan Brown, “[t]he fact that the provision of a product or service may be lawful within a state is irrelevant to the question of federal registration when it is unlawful under federal law.”
There’s a Crack in the Federal Window for Cannabis-Related Goods and Services
However, the USPTO has registered trademarks for goods and services associated with cannabis, just not for actual cannabis goods and services. For example, the USPTO registered trademarks for cannabis-collateral products like grinders and vaporizers ("The Original Amsterdam," "Halcyon Haze"); cannabis-themed clothing ("Ganja Guy," "Marijuana Monkey"). The USPTO has also registered trademarks for cannabis-related services, such as cannabis directories ("Mellow Pages," "Fortune420"); advocacy groups ("Legalize Consciousness," "Women Grow Cultivating Cannabis Entrepreneurs") and cannabis medical advice ("Perfect Marijuana" and "Seed To Patient").
By using and registering these marks for their collateral goods and services, these businesses are establishing priority and secondary meaning (for descriptive marks), which may give them an advantage if (when) the federal government relents and the USPTO begins registering trademarks for actual cannabis goods and services.
Defending Trademark Infringement Actions
While the USPTO won’t issue trademarks for cannabis products, cannabis businesses faced with federal trademark infringement actions can still assert the usual trademark defenses, such as fair use and invalidity, as well as assert counterclaims under federal law. In a recent case, a cannabis dispensary was sued by a noncannabis business for alleged trademark infringement. The plaintiff, which owned several federal trademark registrations, argued that since the dispensary’s use of its own mark did not constitute “lawful use” under federal law, it did not have the ability to bring a counterclaim to cancel the plaintiff’s registrations under the federal Lanham Act. The district court disagreed, allowing the dispensary to bring the cancellation counterclaim under federal law.
The State of State Cannabis Trademark Registration
As many states have decriminalized medicinal and adult cannabis use, their secretaries of state have allowed the registration of cannabis trademarks. Colorado, Oregon. Florida, Minnesota, and now California, among others, will register trademarks for cannabis goods and services.
Jan. 1, 2018: California Turned Over a New Leaf
Prior to California’s Proposition 64, California would only register trademarks that were “substantially consistent with the federal system of trademark registration and protection under the Trademark Act of 1946.”
However, Prop. 64 expressly authorized the addition of two new trademark classifications: “500 for goods that are cannabis or cannabis products, including medicinal cannabis or medicinal cannabis products;” and “501 for services related to cannabis or cannabis products, including medicinal cannabis or medicinal cannabis products.”
In fact, the California secretary of state launched a webpage that serves as a one-stop shop for cannabis businesses: CannaBizfile. CannaBizfile even includes a link to the secretary of state’s trademark and service mark webpage.
As of Jan. 2, 2018, California cannabis businesses are finally able to register trademarks and service marks for cannabis goods and services, including trademarks for specific cannabis strains.
The proposed marks must satisfy the usual registration requirements (e.g., distinctiveness). Unlike the USPTO, which allows an applicant to file an intent-to-use application, California requires proof of actual use in commerce to file and register a trademark. While unregistered cannabis trademarks already in use in California may have common law trademark protection, registration with the secretary of state will confer statewide rights and provide owners with additional protection. For example, businesses with state registered marks can generally block others from using the mark within the entire state, whereas business with unregistered marks may be limited to prohibiting similar marks in the same or nearby geographic locations.
Given that California is the most populous state, that the California cannabis market is projected to reach $6.5 billion by 2020, and that it is currently impossible to obtain federal registration of trademarks for cannabis products, a California trademark registration is the best option for cannabis businesses trying to build their brand and establish priority.
Law 360 disclaimer: The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.