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Cannabis IP Myths

In the United Sates, there are two ways to register a trademark: (1) State—if your products are only sold intrastate, e.g., within California, and (2) Federal—if your products are sold in interstate commerce, that is, outside of California. Federal applications are scrutinized closely and applications for cannabis products typically result in an “inquiry” by the USPTO, where an applicant for a cannabis mark is required to submit statements that the applied-for goods and/or services do not violate the Controlled Substances Act (CSA).

A trademark attorney can be invaluable in walking you through the ins and outs of adopting, registering, and enforcing trademark rights. To get you thinking about what to watch out for, please see the following common myths about trademarks in the cannabis industry.

cannabis-plant

MYTH 1:  I can’t get a federal trademark registration for anything relating to cannabis.

Not necessarily. The USPTO will only register a mark if the applicant can show that the mark is being used in interstate commerce in connection with federally lawful goods and/or services. Because cannabis remains a Schedule 1 controlled substance under federal law, it is not possible to secure registration of a trademark for cannabis goods or services that violate the CSA.

Under the CSA, it is unlawful to sell, offer for sale, or use any equipment, product, or material which is used or primarily intended for use in manufacturing, compounding, converting, concealing, producing, processing, preparing, injecting, ingesting, inhaling, or otherwise introducing into the human body a controlled substance.

However, it is possible to obtain a federal registration for ancillary services, for example, providing information online pertaining to the medical benefits of cannabis or advocacy services relating to the legalization of cannabis. Providing information about cannabis does not run afoul of the CSA or other federal law because it does not “touch the plant” or introduce cannabis into the body.

MYTH 2:  I can’t get a federal registration for cannabis related goods or services that “touch the plant,” but I can get a state registration because medical cannabis is lawfully regulated in my state.

Maybe. Most states where marijuana is medically (or recreationally) regulated accept applications covering cannabis related goods or services that touch the plant. However, California (voluntarily) follows the federal rules for state registrations and will not register marks for goods or services that are offered lawfully under state regulations.

And consider, unlike the federal trademark registration system, the vast majority of states do not accept applications on an “intent-to-use” basis and require that the applied-for mark is in use within the state at the time of application.

MYTH 3:  We received a permit to operate a cannabis dispensary from our local/state licensing entity, so that means we have the right to use our trade name as a trademark.

Not necessarily. Registering a business entity name alone does not establish trademark rights. State cannabis licensing entities do not consider whether someone else is claiming rights in or already uses a trade name as a trademark for permitting purposes. As such, registering your entity under a trade name or obtaining a license to operate a cannabis business does not necessarily confer rights in the same mark. In the United States, each state and the District of Columbia maintain their own corporate name database. For example, even if you register your company’s corporate/trade name in California, that tells you only that the name is available in California. It is possible that the identical corporate name may already be registered in any of the 50 other U.S. jurisdictions.

Similarly, registering a domain name does not automatically establish trademark rights in that domain name. Domain names are registered with Internet registrars that typically have no direct connection to the trademark registration process. Specifically, when you apply to register a domain name for a top-level domain, e.g., healthycannabis.com, there is no consideration as to whether that domain name is a registered or applied-for on any trademark database. As such, owning a domain name alone does not necessarily confer rights in the corresponding mark.

MYTH 4:  We checked Trademark Office database online and the proposed mark isn’t there, so we can proceed. 

Maybe. Searching the USPTO database for the identical mark is not nearly adequate clearance, especially for cannabis brands. While it is very good news that you didn’t find the exact mark on the USPTO database, many cannabis brands are not listed on the federal trademark database as cannabis businesses have a long history of staying under the radar. That means that there may still be a similar mark, perhaps even only one or two letters different for the same, similar, or related products which could create a bar to your use and/or registration.

Moreover, the legal standard for trademark infringement is likelihood of confusion. Consumers, even professional buyers, are generally acknowledged as having imperfect memories. As such, two similar, but non-identical, marks may be considered confusingly similar. For example, the USPTO found the marks CANNA.BIZ and eCannabiz confusingly similar for advertising, marketing, and promotional services and KANNAWAY and KANNADERM for hemp based personal care products.

And, consider that there could be a cannabis business existing in another state gaining common law (unregistered) rights, or state rights based on a state trademark registration. Use without registration establishes common law rights, which are generally weaker than rights obtained through registration. Conducting a thorough search for federal registrations, state registrations, and common law marks that are identical AND similar to your proposed mark is paramount prior to adopting a mark as your cannabis brand.

MYTH 5:  We found the same mark that we selected on the Trademark Office database online, but the products are not the same, so we think we can proceed.

Maybe. Under U.S. trademark law, likelihood of confusion is not limited to only identical marks for identical goods and services. Likelihood of confusion may occur when the products are the same, similar, or related, when offered under identical or similar marks.

For example, the following hypothetical marks may create a likelihood of confusion, despite that the products are not the same: HERBILOVE for cannabis seeds and HERBILOVE FARMS for a cannabis cultivation farm; and GANJAREEF for pre-rolled cannabis cigarettes and GANJASAFE for cannabis infused topical products.

Keep in mind that the manner in which cannabis products are presently sold can facilitate the possibility of a likelihood of confusion. Currently, cannabis products, whether flower, concentrates, edibles, topicals, tinctures, etc., are distributed through dispensaries. This means that even though a high CBD rich cannabis infused cookie is a very different product than a pain-relieving topical lotion, patients/consumers encounter both products at the same location. The overlap in consumers and distribution channels can contribute to a likelihood of confusion between similar marks for goods that would otherwise be arguably unrelated in the non-cannabis marketplace.

MYTH 6:  A slang term for marijuana is a creative name for my cannabis products and I will have strong rights in such a mark. 

Wrong. Cannabis is associated with many nicknames and slang terms. Weed, Kush, Bud, Mary Jane, Ganja, Nugs, Jig, Blunt, Dabs, Hash, just to name a few. These terms are considered descriptive, or even generic, for cannabis products.

A descriptive mark is one that describes a function, feature, purpose, characteristic, ingredient, or use of the goods or services, and alone is too weak to function as a distinctive trademark. A generic term is one that is the name of the product type/category itself. For example, “CANNA” is a term that would be considered descriptive of cannabis, and “WEED” is a term that is generic for marijuana.

Moreover, the Trademark Office is getting hip to marijuana terminology and are not likely to be fooled into thinking a slang term is unique for cannabis goods or services. In conducting review of trademark applications, not only does the Trademark Office search common dictionary databases such as Wikipedia or Dictionary.com, they also use alternative sources such as Urbandictionary.com and are likely to easily identify descriptive uses of slang terms.

MYTH 7:  The product description in my application does not mention or suggest that the product contains cannabis, so the USPTO won’t know my product is unlawful and I can register my mark.

Wrong. Prior to registration, applicants are required to submit a “specimen of use” showing the applied-for mark as used in commerce with the products described in the application. If the specimen of use suggests that your applied-for goods or services are federally unlawful, or the Trademark Office simply wants more information, it can investigate further, e.g., dig around online.

For example, in a recent decision, the Trademark Trial and Appeal Board (TTAB) refused to register the mark HERBAL ACCESS for use in connection with “retail store services featuring herbs,” based on an unlawful, rather than lawful, use of the mark in commerce. Although, the applicant’s description and specimen of use did not expressly show the applied-for mark being used for a cannabis dispensary, the Trademark Office was dubious and found ample evidence on the applicant’s website showing that the “herbs” in the application were indeed marijuana.

It is important to remember that you will have to submit a specimen of use that accurately depicts how your mark used on the goods and/or services. For example, it is not lawful to redact information from your labels concerning THC or cannabis when the products normally are sold with that information, in order to avoid refusal by the USPTO.