Video Blog 4: Trademarks and the Cannabis Industry

Video blog: Trademarks and the Cannabis industry. It’s harder to register the brand of cannabis products as trademarks for several reasons. I go through those reasons and some tips for potential trademark protection for the cannabis industry.  If you have any questions about your cannabis trademarks, cannabis-related trademarks, cannabis goods or services, please contact Verna Law, P.C. at anthony@vernalaw.com or 914-908-6757.

Here is a lightly-edited transcript of the video blog:

Hi, I’m Anthony Verna, managing partner of Verna Law, P.C., a law firm focused on IP and Advertising Law.

I’m going to give you a little hypothetical. You are either growing cannabis or you’re a cannabis dispensary or you have a company  that has some kind of accessories to cannabis and you want to take either the strain that you’re selling, or growing or the products that you’re making and you want to brand that and registered as a trademark.

You’re going to have a couple problems with that, however. We have a case called in re Pharmacon LLC. At which point, the Trademark Trial and Appeal Board ruled that because we have the Controlled Substances Act, a federal legislation which makes cannabis sales illegal. Even though states are legalizing the use and sale of cannabis more and more, it is still
illegal under federal law. And the Trademark Act is very blatant about federally registered trademarks.

They must be in lawful use.

Therefore, the Trademark Act and this federal Controlled Substances Act basically make cannabis trademarks illegal. So if you’re in this particular industry, how are you protecting your brand as something that can be only yours? Well, number one, I would state that if you’re in the accessory business, that’s perfectly fine. Anything that’s related to cannabis would be fine as long as you forget to have any designs that relate to cannabis, no leaves.

No stating the product is related to cannabis.

If you’re in this particular business and you’re making hemp or you’re making CBD oil, well those products are fine. And, what I would say is that if you’re in those industries, take your brands and register them there. Another thought would be state trademark registrations.

Usually, I’m not a big fan of state trademark registrations because usually they’re only evidentiary in nature. At the very
least in the states where this is legalized, you as a business owner can state what the brands are. Here are what we are selling. And at least in these particular states where it’s legalized, you’ll have some kind of protection there. And, of course, the business can always rely on the common law as well for trademark protection.

But that, of course, is a matter for the courts.

For actually receiving a federal registration, remember any product that’s an accessory to cannabis is perfectly fine. Just make sure you leave out the leaves, make sure you leave out the word “cannabis” at the Patent and Trademark Office.

2024 Update:

Here at Verna Law, P.C., we have not filed any cannabis trademarks because in 2024, federal trademark protection is not allowed.  

Despite being legal under state law in many states, cannabis continues to be a schedule I drug under the Controlled Substance Act (CSA) 21 U.S.C. §812 (b)(1). The 2018 Farm Bill (The Agriculture Improvement Act of 2018) stated the term “marijuana” did not include hemp. 

Cannabis-Related Trademarks

Since the historic signing of the Farm Bill on December 20, 2018, the legal landscape for hemp and CBD-related goods has undergone a significant transformation. This legislation has opened new doors for entrepreneurs and businesses eager to dive into the burgeoning market of cannabis and hemp-derived products. For a comprehensive overview of how this new legal framework affects trademark applications, our dedicated section, “Filing Trademark Applications for Hemp-Related Goods After the 2018 Farm Bill,” provides detailed insights.

In the wake of the Farm Bill’s enactment, there’s been a surge in trademark applications filed with the United States Patent & Trademark Office (USPTO) for a variety of goods and services within the cannabis and hemp sectors. However, applicants should brace themselves for a longer wait. Traditionally, it takes about 12-14 weeks for an Examining Attorney to review a trademark application. Yet, applications encompassing cannabis, CBD, or hemp-derived goods are currently facing significant delays, extending the review process by an additional 6-8 months.

While the 2018 Farm Bill has removed many of the hurdles associated with the Controlled Substances Act, it’s crucial to note that other obstacles remain. Specifically, the Federal Food Drug and Cosmetic Act (FDCA) poses a potential ground for refusal. To navigate these complexities, applicants may consider dividing their trademark application, a strategic move to expedite the examination process for non-controversial goods. More information on this strategy can be found in our guide, “Why Divide a Trademark Application?”

Recent updates from the FDA have reaffirmed the challenges facing trademarks for CBD or hemp-infused “foods” or “dietary supplements.” Given that CBD is an active ingredient in an FDA-approved drug and is currently under clinical investigation, such products may contravene the FDCA. The establishment of a CBD policy group by the FDA aims to scrutinize the safety data surrounding CBD’s incorporation into foods, beverages, and supplements, with a particular focus on protecting vulnerable consumer groups.

Despite these regulatory hurdles, the FDA has recognized certain hemp-derived ingredients as Generally Recognized as Safe (GRAS), including hulled hemp seed, hemp seed protein powder, and hemp seed oil. This distinction opens potential pathways for trademarks that incorporate these ingredients, depending on how the products are described in their applications.

The evolving regulatory framework underscores the importance of seeking expert legal counsel when navigating the trademark application process, especially for goods and services related to hemp or CBD. Our team is at the forefront of these developments, offering complimentary consultations to ensure your trademark strategy is both effective and compliant.

​Common Law and State Trademark Registration

In trademark circles there has been a lot of discussion about products infused with CBD, much of the dialogue has centered around products regulated by the Food and Drug Administration (“FDA”). The Farm Bill did not change or alter the FDA’s authority to regulate products/goods containing cannabis or cannabis derived compounds. In order for a trademark application to mature to a federal trademark registration at the United States Patent and Trademark Office, the use associated with the trademark must be lawful. Cannabis brands, cannabis companies, cannabis businesses are not seen as legal at the federal level.  There might be some brand protection on the state level for unregistered trademarks, however.  And while registered federal trademarks are not going to be accessible for cannabis goods at the U.S. Patent and Trademark Office and in federal courts, we can explore some state trademark protections and common law rights for a trademark owner.  

Consider a scenario where your business operates exclusively in southern California, selling a unique product. Your common law trademark might shield you from competitors attempting to sell a similar product under a resembling name in Los Angeles. Yet, this protection does not extend to distant regions such as San Francisco or northern California. Should a competitor establish the first use of the trademark in these areas, their common law rights could block your expansion efforts.

One of the quintessential benefits of being the initial user is that common law rights may secure your trademark usage within your local vicinity, even against a rival who secures a federal registration for the identical mark. Nevertheless, the enforcement of common law trademark rights presents challenges due to the lack of a public registry documenting the inception of your trademark’s usage.

Conducting Diligent Trademark Searches

Prior to adopting a trademark or seeking federal registration, conducting a comprehensive trademark search is essential. This process helps ascertain whether your intended mark infringes upon existing federal, state, or common law trademarks, thereby reducing potential legal hurdles.

A meticulous trademark search encompasses:

1. USPTO Database Search: To avoid federal registration denial, verify that your mark is not “confusingly similar” to any existing registered trademark. Similarity in marks, used on comparable goods or services, could confuse the public regarding their origin.
2. Common Law Trademark Search: This search uncovers any local businesses holding superior common law rights or identifies out-of-area entities that could restrict your expansion or affect your rights upon federal registration. It typically involves exploring business directories, phone directories, and the internet at large.
3. State Trademark Search: By investigating state databases, you can uncover trademarks registered as business names, trademarks, or trade names within specific states. An existing state trademark could prevent the use of your mark within that jurisdiction.

Executing a thorough trademark search is pivotal for identifying potential barriers and enhancing the likelihood of a successful USPTO registration.

Safeguarding Your Common Law Trademarks

Utilizing the ™ symbol signifies your claim over common law or state law trademark rights, or indicates a pending federal registration application. This practice serves as a deterrent against potential infringement by competitors.

The ® symbol, however, is exclusively reserved for trademarks officially registered with the USPTO.

Enforcement of trademark rights, including those under common law, rests with the trademark owner. Failure to actively protect your trademarks might result in the forfeiture of your rights. Enforcing these rights typically involves legal actions against infringing parties within your territory, where consulting with a trademark attorney for strategic advice is recommended.

It is not necessarily easy to enforce common law trademarks in federal court, especially if the plaintiff is a cannabis company.  That said, with other issues met, such as diversity jurisdiction and a certain amount of popularity or fame of the trademark, a plaintiff with cannabis-related goods and marijuana products may be able to enforce a common law trademark in federal court.  

State-level trademark registration is, as the name suggests, conducted at the state level. This means that the protection it offers is confined to the state in which the trademark is registered. In most states, the Secretary of State’s office oversees the registration process. However, there are exceptions, such as in New Jersey, where the Department of the Treasury handles trademark registrations.

Benefits of State Trademark Registration

Cost Efficiency

One of the primary advantages of state trademark registration is its affordability. It is often at least $200 cheaper than securing a federal trademark, making it an accessible option for many small businesses and startups.

Expedited Processing

State trademark registration processes are generally quicker than their federal counterparts, sometimes by more than a year. This expedited timeframe allows businesses to secure protection for their brands without lengthy delays.

Simplicity

The process for obtaining a state trademark is typically less complicated than for a federal trademark. Although standards vary by state, they are universally less stringent than those set by the United States Patent and Trademark Office (USPTO).

Limitations of State Trademark Registration

The primary drawback of state trademark registration is its limited geographical scope of protection. If a trademark is registered in one state, it does not offer protection against use by others in different states, which can be problematic for businesses looking to expand beyond their initial state of registration.

When to Consider Filing a State Trademark

State trademark registration is particularly advantageous for businesses intending to operate solely within their state of registration. It offers a quicker, more cost-effective way to protect a brand’s unique identifiers. Furthermore, being listed in the state’s trademark registry can deter others from using similar marks. With filing fees significantly lower than those for federal registration, state trademarks offer a practical option for securing brand identity at the state level.

In summary, state trademark registration represents an essential, albeit geographically limited, tool for protecting a brand’s identity within a specific state. While it offers numerous benefits in terms of cost, processing time, and simplicity, businesses should carefully consider their long-term expansion plans when deciding between state and federal trademark registration. For those operating within a single state or seeking immediate protection while pursuing federal registration, state trademarks are an invaluable asset.

If you have any questions about your cannabis trademarks, cannabis-related trademarks, cannabis goods or services, please contact Verna Law, P.C. at anthony@vernalaw.com or 914-908-6757.