Current Status of Cannabis Legalization
At the outset of the Covid pandemic, 32 states, Washington, D.C., and Puerto Rico classified cannabis businesses as “essential,” allowing them to remain open. Currently, 36 states, Washington, D.C., and four U.S. territories have legalized medicinal and/or recreational marijuana. An additional 11 states permit cannabidiol (CBD) products with low tetrahydrocannabinol (THC) concentrations for limited medical purposes. Idaho allows the narrow exception of CBD products with 0% THC. Kansas and Nebraska are the only remaining states that do not permit marijuana use whatsoever.
Despite the widespread acceptance of cannabis across the U.S., marijuana remains a Schedule I controlled substance under federal law. This presents a challenge for cannabis businesses trying to protect their brand with the United States Patent and Trademark Office (USPTO). That being said, there are still numerous ways for cannabis businesses to build a trademark portfolio, including state registration (if permitted), and federal registration of marks used in connection with hemp derived products and/or ancillary business products/services.
Select a Strong Trademark
The first step to building your trademark portfolio is to select a strong mark that will not be deemed generic, descriptive, or infringe on another user’s mark. This should be a starting point irrespective of whether your current cannabis products or services can be registered with the USPTO. The goal is to set yourself up for a successful trademark application if/when cannabis becomes federally legal. Plus, you want to avoid a potential infringement claim. In the U.S., common law rights can be asserted by the first user of a mark even without a registration.
For purposes of this article, a brief overview of generic, descriptive, and confusingly similar marks is provided below. For a more comprehensive overview of the five main categories of trademarks, click here.
1. Generic Trademarks
A generic mark is a term that the public understands to be the common name for the goods or services being offered in relation to the applied for mark. For instance, your trademark cannot be “Cannabis,” “Marijuana,” or “Weed,” as these are common names for the goods. Set yourself apart from the rest and coin a unique name.
2. Descriptive Trademarks
“A mark is considered merely descriptive if it describes an ingredient, quality, characteristic, function, feature, purpose, or use of the specified goods or services.” TMEP §1209.01(b). As one example, the USPTO refused the mark “Cryptonite” for cannabinoid related products, at least in part, because the examining attorney determined that “Kryptonite” merely identifies a strain of cannabis. The spelling of the mark and strain are not identical, but they sound the same. A mark may be suggestive of the goods and/or services, but not descriptive.
3. Conduct a Search to Avoid a “Likelihood of Confusion” Refusal
A mark can also be refused registration on the grounds that it resembles another mark and would create a “likelihood of confusion” as to the source of the goods or services. While you may not come across any direct conflicts for your mark, multiple factors are considered when determining whether a likelihood of confusion would exist between marks. These factors include the similarity of the appearance, sound, connotation and commercial impression of the marks, and the relative closeness of the goods/services being offered.
The best way to avoid a likelihood of confusion refusal and/or infringement claim is to conduct a comprehensive search of federal, state, and common law marks in the same and related classes of goods/services prior to applying for registration. The state and common law search is particularly important for the cannabis industry, considering federal registration is prohibited for marijuana.
Part of conducting a search is determining the classification of the goods/services. Cannabis goods and services generally fall under eight international trademark classifications. For instance, cannabis flower would fall under class 34, seeds or live plants under class 31, and consultation and/or educational services under class 41. Once you have determined the classification of the goods/services, you must also determine the coordinated classifications to conduct a thorough search.
Many states, including California, permit registration of trademarks for THC related products and services. Check to see if the state(s) where you are selling your products allow for cannabis registrations. Similar to federal applications, you will want to first determine the classification of the goods/services and conduct a search prior to filing an application.
In addition to applying for a state trademark registration, the ™ symbol may be used beside a mark. The ® symbol is only used in connection with a federally registered mark. The state trademark registration(s) and ™ symbol will help build brand awareness and place other businesses on notice that your mark is in use.
Be aware that there are limitations to state trademarks. A state registration only offers protection in the state in which it is registered, unlike a federal registration which provides nationwide protection. Also, there is no “intent-to-use” application for state trademark applications. This means the mark must already be in use in connection with the goods or services before you can apply for state registration.
USPTO examining attorneys consider multiple federal laws, including the Controlled Substances Act (CSA), Federal Food Drug and Cosmetic Act (FDCA), and Agriculture Improvement Act of 2018 (the 2018 Farm Bill) to determine whether registration of a mark for cannabis and related goods/services is lawful.
1. The Controlled Substances Act
Marijuana is unlawful under the CSA and is defined as “all parts of the plant Cannabis sativa L., whether growing or not; the seeds thereof; the resin extracted from any part of such plant; and every compound, manufacture, salt, derivative, mixture, or preparation of such plant, its seeds or resin.” 21 U.S.C. § 802(16). Accordingly, the USPTO refuses registration for marks used in connection with goods/services encompassing CBD or other extracts of marijuana.
2. The 2018 Farm Bill
The 2018 Farm Bill carved out an exception for hemp, defined as “the plant Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta-9 tetrahydrocannabinol [THC] concentration of not more than 0.3 percent on a dry weight basis.” Section 297A of the Agricultural Marketing Act (AMA). This opened the door for applicants to register marks used in connection with goods derived from hemp, including CBD products, provided the products contain no more than 0.3% THC on a dry-weight basis. However, as discussed further below, these goods may still be considered unlawful under the FDCA.
Additionally, under the 2018 Farm Bill, commercial hemp producers/cultivators are required to have a license or authorization from a state, territory, or tribal government in accordance with a plan approved by the U.S. Department of Agriculture (USDA). Therefore, if a trademark application involves the cultivation or production of cannabis, the USPTO will require the applicant to furnish statements verifying compliance with the requirements of the 2018 Farm Bill.
3. The Federal Food Drug and Cosmetic Act
The 2018 Farm Bill maintained the FDA’s authority to regulate goods comprising cannabis or cannabis-derived compounds under the FDCA. As such, the USPTO will refuse registration of marks used in connection with food, beverages, and dietary supplements containing CBD, even if the products are derived from hemp.
4. Ancillary Products
Cannabis business’s often sell/offer goods and services beyond cannabis. Applying for federal trademark protection for these ancillary products will broaden the scope of the business’s trademark portfolio, expand brand awareness, and likely deter competitors from using the same or similar mark. Common examples of ancillary products include (1) clothing, (2) pipes or vape pens, and (3) consulting/educational services. If/when federal registration of cannabis is legalized, businesses with existing ancillary registrations will be better positioned to obtain registration for the same mark(s) in connection with cannabis products.
- Cannabis is still illegal under federal law, prohibiting federal registration of marks used in connection with cannabis.
- Federal registration for marks containing CBD is permissible if the products are: (1) derived from hemp; (2) contain less than 0.3% THC; and (3) are not used in connection with food, beverages, and dietary supplements.
- Trademark applications for hemp cultivation/production require proof of licensure according to a USDA-approved plan.
- Many states permit trademark registration of marks used in connection with cannabis.
- Use of the ™ symbol puts the public on notice that you are using the mark as your trademark. The ® symbol is only used in connection with a federally registered mark.
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