In 66% of the states in the United States, plus the District of Columbia, some level of marijuana use is legal under state law. In even more states, other cannabis-based products — such as CBD oil — are legal to some degree. Under federal law, however, cannabis remains a schedule 1 drug, which means that federal law says it has no accepted medical use and a high potential for abuse. That puts cannabis-based product companies in a tough spot with respect to protection of their trademarks.
In order to obtain a federal trademark registration in the United States, the applicant must show that they either have or intend to employ their marks in “lawful use in commerce.” For several years, the United States Patent and Trademark Office (USPTO) and Trademark Trial and Appeals Board (TTAB) have been in lockstep, producing TTAB decisions that businesses cannot register marks for use in connection with cannabis-based products because such use has not been lawful under federal law. The Farm Bill 2018 changes things a bit – but only a bit.
The Farm Bill removes from schedule 1 (and the Controlled Substances Act completely) hemp-based products that have a THC concentration of not more than .3 percent, but it did not remove cannabis-based products with THC concentrations over .3 percent and marijuana-based products with THC concentrations under .3 percent. The Farm Bill also left intact FDA controls over foods, beverages, dietary supplements, and pet treats and created a significant regulatory framework with respect to cultivation of compliant hemp-based products.
As the USPTO makes clear in its May 2019 examination guide (“Examination of Marks of Cannabis and Cannabis-Related Goods and Services after Enactment of the 2018 Farm Bill”):
- The USPTO will stop refusing registration to trademark applications relating to hemp-based products that have a THC of less than .3 percent,
- EXCEPT if the products are used for foods, beverages, dietary supplements, or pet treats containing CBD (which are still illegal unless approved by the FDA).
7 Ways to Protect Your Brand Without a Federal Trademark
The end result is that a small subset of businesses engaged in cannabis-related commerce will be able to obtain federal registration of their marks, but most will not. So, what can those with non-compliant products do to protect their trademarks? Generally, there are seven moves they should consider. In the perfect world, they would make all seven, but doing so is complex and complex solutions don’t come cheap. Nevertheless, in order of free to pricey, these are the steps a business can take:
1. Document everything you do with respect to your brand. Be diligent about this. Create a file and start putting everything in it. Save it to the cloud so it cannot go up in smoke. You’ll want to include information about your very first sale to an out-of-state buyer. Keep the files showing that you designed your mark or your emails between you and the person you hired to help you design it. Include photographs of your mark on products and copies of your advertising, whether in print or screenshot form. Date everything. This step will not get you federal protection today, but it doesn’t cost you anything but time and it could help considerably with some of the other steps in this list. It could also prove helpful if and when the federal ban is lifted and you are racing to obtain federal registration of your brand in connection with all of your products.
2. Apply for copyright registration. Although the USPTO may not register your cannabis-based mark, the U.S. Copyright Office might, if your mark has a unique logo element. If some competitor starts using your logo, you can cite to your copyright registration in your cease and desist letter.
3. Apply for a patent. This won’t be an option for every business, but like copyrights, patents do not have the “lawful use” limitations that trademark registration presents. So, if you have a product that might qualify for patent registration, you should consider pursuing it.
Plant patents can be difficult to obtain, though. The USPTO only grants patents on plants if the plant has been asexually reproduced and is a distinct and new variety other than a tuber propagated plant or a plant found in an uncultivated state. Asexual reproduction is required because it proves that the applicant can duplicate the process through which the plant was created.
Design patents may be available and more easily obtained. A “design patent” is a type of industrial design right that protects the ornamental design of a functional item. For example, ornamental designs of jewelry, furniture, beverage containers, and computer icons may be covered by design patents.
4. Create products that are not subject to the federal ban and register your marks with the USPTO in connection with those products. If you sell cannabis-based products, you probably also sell other products such as branded clothing, smokers accessories, baked goods, seasonings, etc. Perhaps you also sell hemp-based products that qualify for registration under the new Farm Bill. If so, you should consider pursuing registration of your marks in connection with those non-banned products. This will not get your brand registered in connection with your federally banned products, but it could still prove useful in stopping others from using confusingly similar marks.
5. Create a net of protection through state trademark registrations. Individual states have their own trademark registration processes. State trademark applications require actual use in that particular state (and not merely an intent to use), but if you are actually using your mark in a state in connection with your cannabis-based products, you should consider pursuing state registration. It’s critical that each time you enter the market in a new state, you should register. Doing so could eventually create a net of protection and, in the perfect world, would cover everywhere in which it is legal to engage in your business under state law.
6. File federal intent-to-use applications. This is a gamble, and perhaps a bold strategy, but it might be worth a shot. If you believe cannabis will be removed from schedule 1 eventually, you might consider submitting applications stating your intent to use your marks in connection with legal goods and services. Those goods and services may not be legal now, but if you carefully word your intent-to-use application, you may be able to convince the USPTO examiner that the USPTO should give you the typical 36-month period to submit a specimen showing actual lawful use in commerce. If you can, then you might find yourself with an approved intent-to-use application when your goods and services becomes legal under federal law. This could allow you to be at the front of the line when the inevitable rush to registration occurs.
7. Sue companies knocking off your brand under state law. Even without federal (or state) trademark protection, you can still protect your brands by aggressively pursuing suits against competitors who knock them off by relying on unfair and deceptive trade practices statutes or unfair competition laws. Remember: Trademark rights are based on use, not necessarily on registration.
As a business, if you’re investing your time and resources into a brand, you need to protect it as well. While a straightforward federal trademark registration for cannabis isn’t an option at this time, these strategies may help make the case for a federal trademark if and when cannabis and related products become “lawful use in commerce.”