Recently we met a client who wants to develop a brand for use in connection with a cannabis product, in one of the 23 states (and the District of Columbia) where it’s legal. While cannabis is clearly a growing business, selling it is still a criminal offense in the eyes of the federal government. So, the challenge is to protect a brand without the aid of the US Patent and Trademark Office (USPTO). The USPTO reasons that federal trademark protection requires use of the trademark in interstate commerce, and interstate sale of marijuana violates the federal Controlled Substances Act.
The primary option available to entrepreneurs like our client is to protect their trademark rights at the state level. The client can still register his trademark in each state where he is using it, but of course that is much less comprehensive than registering it for protection throughout the United States. Theoretically, someone in a different state where our client is not yet using his mark could either have superior rights based on their prior and continuous use, or could start using a confusingly similar mark and benefit from the goodwill (pun unintended) and business reputation that my client develops in his state. Meanwhile, we want to preserve exclusive rights to the chosen name, before they’re vaporized.
If our client were in the business of selling marijuana paraphernalia or promoting marijuana, he would be eligible for a federal trademark because things like pipes and advertising are not illegal. A trickier area of law is how to deal with cannabis-based products that do not contain its main psychoactive ingredient, THC. The USPTO already allows registration of marks for goods made from industrial hemp — which is not psychoactive — but it is not clear whether marks can be registered for goods made from flowering plants that have little amounts of THC.
In any event, marijuana brand-developers need to take heed. Even if you are only eligible for and file for state trademark status, you still need to do a trademark search for the same reasons as anyone else who is starting a brand:
- You don’t want to infringe on someone else’s trademark rights and be enjoined from using a brand in which you’ve invested — or even worse, be accused of profiting from someone else’s trademark and be liable for those damages; and
- You don’t want inadvertently to promote someone else’s brand who has a confusingly similar trademark.
Also, states do not necessarily have an intent-to-use procedure for filing a trademark. Federally, prior to commencing use of a mark, you effectively can reserve the name. After it is approved, you get six months to use it, and then you can get up to five more 6-month extensions (for a filing fee). When the time comes to use the mark, the intent-to-use application graduates to become a registration based on actual use — and your date of first use is deemed to be the date that you first filed the intent-to-use application.
The takeaway is that you can file for trademark protection at least in some states (where you are actually selling the goods or services) and gain a foothold, even if you cannot protect your brand nationally. I’ve never thought of state trademark offices as particularly useful, but when you can’t get it federally, state trademark registrations are the best way to promote business in the states where cannabis is legal, and to insert a placeholder for the day if and when cannabis is legalized throughout the country.
Mark S. Kaufman
Kaufman & Kahn
747 Third Avenue
New York, NY 10017
Tel. (212) 293-5556
Fax. (212) 355-5009