Cannabis Trademarks and California’s Voluntary Limitations on Market Protection

It is a common misconception that intellectual property protection, specifically trademark registration, is unavailable to the cannabis industry. It has been the law for awhile that the United States Patent and Trademark Office (“USPTO”) will only register a mark if an applicant can show that the mark is being used in commerce in connection with federally lawful goods and/or services. The California Secretary of State’s office voluntarily follows the federal practice when it evaluates trademark registration on the state level. Because cannabis remains a Schedule 1 controlled substance under federal law, it is not possible to secure registration of a trademark under either federal or California registrations for cannabis goods or services that violate the Controlled Substances Act (CSA).

But not all cannabis goods and services violate the CSA. In fact, the USPTO has and continues to issue registrations for ancillary services, for example, providing online information pertaining to the medical benefits 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 otherwise introduce cannabis into the body.

That said, federal trademark applications are scrutinized closely. In a 2016 decision, the Trademark Trial and Appeal Board refused to register the mark HERBAL ACCESS for use in connection with “retail store services featuring herbs,” based on an unlawful use of the mark in commerce. Upon submission of a specimen showing use, the USPTO was dubious and found ample evidence on the applicant’s website showing that the “herbs” described in the application were, in fact, solely marijuana.

In addition to federal registration for marks for goods or services sold in interstate commerce, it is possible to register a mark for goods or services sold intrastate in most states that have legalized the sale of cannabis. However, California is an exception, because it voluntarily follows the federal rules and will not register marks for cannabis goods or services, even if offered lawfully under state regulations.

California’s strict prohibition of cannabis-related trademarks does not jive with its progressive legislative history in other areas. In 1996, California was the first state to establish a medical cannabis program to aid patients suffering from cancer, AIDS, and other chronic illnesses in alleviating their symptoms. In 2015, the California legislature enacted the Medical Marijuana Cannabis Regulation and Safety Act (“MMCRSA”), which provides a structure for the state and local municipalities to regulate cannabis cultivation, distribution, and sales. Most recently, in November 2016, California voters passed the Adult Use Marijuana Act (“AUMA,” also known as Prop 64), which will make cannabis commercially available to recreational adult users in 2018.

With the lack of an overarching governing authority presently regulating cannabis products, consumers could instead depend on the goodwill of established brands, which are usually recognizable by their trademarks. In this landscape, a trademark serves as a tool to maintain merchant and manufacturer accountability to ensure quality and consistency in the products that California patients purchase.

California has always enjoyed a strong economy, in part, because of its support of emerging industries and local businesses, and also because of its progressive approach in safeguarding consumer protection for its residents. Typically, California is a leader for other states to follow and is a beacon of hope for emerging industries. One way it could achieve this goal is by reevaluating its voluntary adherence to the federal guidelines of trademark law in regards to cannabis products and services.

Both the National Cannabis Bar Association and the California Cannabis Industry Association, as well as individual attorneys, have reached out to the California Secretary of State’s office requesting that it cease voluntarily following the federal practice. California cannabis consumers and businesses would benefit from this type of brand protection that is otherwise available to consumers and businesses operating in other states that have legalized cannabis.

 

Mary Shapiro is an intellectual property attorney specializing in trademark, copyright, and internet law. A former client of intellectual property law services, her focus is on effectively enhancing and protecting the value of her client’s intellectual property. She started her legal career at Townsend and Townsend and Crew LLP (now Kilpatrick Stockton), then the largest intellectual property law firm in the west, following a 20 year career in the publishing industry. Mary began her solo practice in 2009, continuing to focus on trademark, copyright and internet issues for technology, medical devices, wineries, foundations and consumer products.

Mary’s cannabis practice began in 2005 and she has since federally registered respective marks for dispensaries, cultivators, though none for cannabis products, due to the federal prohibition to registering such marks.  Mary is a founding member of NCBA, a First 50 supporter of Women Grow, and regularly speaks at industry conferences. She provides pro bono assistance to Marijuana Policy Project and Americans for Safe Access (ASA).

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