State Trademark Registration Prevails for Cannabis Industry

January, 17th, 2017

Categories: Articles, Blog Tags: startup, trademark, TTAB, USPTO

The Lanham Act’s “use in commerce” requirement has long been established to mean lawful use in commerce in accordance with federal statutory law. This requirement can bar registration because the identified goods or services are illegal under federal law, even if such goods or services are legal in a state. With eight states having legalized recreational marijuana, thirteen decriminalizing it, and twenty-nine legalizing medical marijuana, the cannabis industry has taken off running; however, the federal moratorium on marijuana has prevented this ‘budding’ industry from obtaining federal trademark protection. In this current legal climate, state trademark registrations present a path to protection.

At the close of 2016, the Trademark Trial and Appeal Board (“TTAB”) held firm on the ineligibility of cannabis-related goods and services to obtain federal trademark registration in two precedential decisions. In separate decisions, the TTAB affirmed a refusal to register a service mark for “retail store services featuring herbs,” and a trademark for “smokeless cannabis vaporizing apparatus,” due to their violation of the federal Controlled Substances Act. In re Morgan Brown, 119 U.S.P.Q.2d 1350 (TTAB 2016); In re JJ206, LLC, dba JuJu Joints, 120 U.S.P.Q.2d 1568 (TTAB 2016), appeal filed. In both decisions, the TTAB addressed this predicament, stating, “the fact that the provision of a product or service may be lawful within a state is irrelevant to the question of federal registration when it is unlawful under federal law.” This ruling invokes the Supremacy Clause and bars the makers and distributors of vaporizers, pipes, oils, and other goods and services related to the cannabis industry from obtaining federal trademark protection.

Until Congress decides to change the classification of cannabis within the Controlled Substances Act, business owners are left with one choice for protection—state trademark registration. State trademark registration grants exclusive rights to a mark to the entirety of the state in which the registration exists. Of course, a business owner may hold registrations for multiple states, provided the goods and services are used in those states. While another could register a similar mark in a state where a business owner has not registered or does not operate, it would not interfere with the owner’s rights within the states where he or she has filed an application and is using the mark. If cannabis is eventually decriminalized, a federal registration cannot stop a state registration holder from using their mark within the designated state, because the state registration holder obtained rights in that geographic area prior to the federal registration. Therefore, cannabis businesses should act now to obtain state registrations for their brands ensuring the broadest protection if federal protection becomes available.

Takeaway: Trademarks for the sale of cannabis and related services and products are unregisterable under the Lanham Act because such goods and services are illegal under federal law, despite the growing number of states that have legalized some form of cannabis. State trademark registration is one solution to protect cannabis brands and ensure the broadest scope of protection if and when the federal government legalizes cannabis.