How Cannabis Companies Can Protect Their Intellectual Property In The Event Of Federal Legalization
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On July 1, 2021, when the State of Virginia’s and the State
of Connecticut’s cannabis legalization took effect , 18 states
across the nation had legalized adult-use cannabis. With positive
momentum on states legalizing recreational cannabis, as well as
clear and repeated assertions from Senate Majority
Leader Chuck Schumer (D-NY), it’s not farfetched
to assume that nationwide legalization is on the horizon.
Cannabis businesses in states with legal regimes have spent
thousands of dollars and countless hours developing distinctive
visual looks, crafting the perfect logo, and devising ways to make
their product packaging stand out from their competitors. In the
wake of legalization, many copycats, especially ones from across
state borders, might emerge and try to profit off of the
intellectual property and branding of established cannabis brands
from legal states like California and Oregon.
What Is a Trademark?
A trademark is a brand name. A trademark or service mark
includes any word, name, symbol, device, or any combination, used
or intended to be used to identify and distinguish the
goods/services of one seller or provider from those of others, and
to indicate the source of the goods/services.
Federal Trademark Registrations
Federal trademark registrations serve as an important tool for
enforcing ownership rights in a brand. The United States
Patent and Trademark Office (USPTO) is the federal
agency for registering trademarks. Registering a trademark with the
United States Patent and Trademark Office (USPTO) expands
enforceability across the country and provides nationwide priority
over others using similar names or designs.
Restrictions of Trademarks for Cannabis Businesses
The USPTO only registers trademarks associated with goods or
services in “lawful” commerce, which means that the goods
or services sold under the brand must comply with federal law. TMEP §907. Unfortunately
for cannabis businesses, cannabis, and its psychoactive component,
THC, remain classified as Schedule I controlled substances under
the federal Controlled Substances Act (CSA). As such, the USPTO
refuses to register trademarks that identify goods or services
related to manufacturing, distributing, dispensing and possessing
cannabis and cannabis-based preparations. In other words, any
and all plant-touching operations are ineligible for federal
trademarks. This deprives licensed and tax-paying cannabis
businesses in states with legal adult-use cannabis regimes of the
ability to fully protect their trademark rights at the federal
Securing federal trademark registrations for marks
identifying non-plant touching legal cannabis-related activities,
including those listed previously, may arguably protect the brand
for future product and service expansion once cannabis is federally
decriminalized or legalized.
An Interim Solution for Cannabis Businesses: Protecting
Non-Plant Touching Trademarks
While plant-touching cannabis-related activities are ineligible
for federal trademark protection, cannabis businesses can protect
certain non-plant touching activities which ARE federally legal and
consequently eligible for federal trademark registration.
Examples of legal activities that cannabis businesses
can secure federal trademarks for include:
- Clothing and other apparel, including t-shirts and hats
featuring a cannabis-related trademark. (This is perhaps the
most common route taken by state-legal cannabis businesses to
secure a federal trademark registration.)
- Smoker’s articles, such as cigarette lighters and ashtrays,
that are not specifically intended for use with cannabis
- Educational programs in the fields of cannabis, including for
health benefits, state laws, etc.
- Providing an internet news portal or blog that features
information about cannabis or cannabis products.
- Entertainment services, namely, providing podcasts featuring
medical and industry experts in the field of cannabis and medical
Why Cannabis Businesses Should Secure Federal Trademarks
Securing federal trademark registrations for marks identifying
non-plant touching legal cannabis-related activities, including
those listed previously, may arguably protect the brand for future
product and service expansion once cannabis is federally
decriminalized or legalized. Trademark law recognizes a doctrine
known as the “zone of natural expansion,” which provides
some trademark protection in areas one might expect a trademark
owner’s business to expand into.
Securing a federal trademark for a non-plant touching part of
the business may help cannabis businesses avoid losing valuable
trademark rights to third parties in the wake of federal
legalization. Many within the cannabis industry have already
started establishing trademark rights at a federal level, in
anticipation of “expanding” their national brands into
cannabis following a change in federal law.
Are State Trademarks Enough?
Opting for a state trademark registration in states like
California that have legalized cannabis is often easier and less
costly than obtaining a federal trademark registration. However,
unlike a federal trademark registration which would protect a mark
nationwide, a California state trademark would only protect the
mark only in the registered state (California).
The owner of a California trademark registration could not use
their state trademark registration as the basis for establishing
priority or asserting infringement against the user of a competing
mark in a different state.
It is essential for cannabis businesses to protect their
intellectual property to the fullest extent permissible under
current law. This need to secure the interests of your business is
made more urgent with the (long-awaited) possibility of federal
Originally published July 5, 2021
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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