The legalization of recreational and medical marijuana in certain states in the United States has gained international attention. For companies and individuals involved in the businesses of recreational and medical marijuana in states that have legalized the substance, there are numerous challenges given the fact that marijuana is still an illegal substance under U.S. federal law. Those involved in businesses that are lawful under U.S. federal law have the benefit of building their brands by filing and registering their trademarks and service marks with the U.S. Patent and Trademark Office (USPTO). However, those involved in the businesses of recreational and medical marijuana are simply not allowed, under U.S. law, to register in the USPTO trademarks and service marks that involve the sale or shipment of marijuana. Furthermore, those involved in the businesses of recreational and medical marijuana may not assert common law trademark rights in their marijuana trademarks and service marks in federal district court in the United States. This article focuses on the challenges associated with trademark protection and enforcement for marijuana-related businesses.
Illegality of Marijuana Under U.S. Federal Law
The Controlled Substances Act (CSA) codified under U.S. federal law prohibits manufacturing, distributing, dispensing or possessing certain controlled substances, including marijuana and marijuana-based preparations. 21 U.S.C. §§812, 841(a)(1), 844(a); see also 21 U.S.C. §802(16). In addition, the CSA makes it unlawful to sell, offer for sale or use any facility of interstate commerce to transport “any equipment, product, or material of any kind which is primarily intended or designed for use in manufacturing, compounding, converting, concealing, producing, processing, preparing, injecting, ingesting, inhaling, or otherwise introducing into the human body a controlled substance, possession of which is unlawful under [the CSA].” 21 U.S.C. §863. Thus, the CSA makes it illegal in the United States to manufacture, distribute, dispense or process marijuana for any purpose, whether it be recreational or medicinal, including medicinal uses prescribed by a physician.
Source: Office of National Drug Control Policy and National Conference of State Legislatures
Legalization of Marijuana in Certain U.S. States
Although illegal under federal law, some U.S. states have legalized the growth, possession and sale of marijuana for medical and recreational use. As of the publication date of this article, medical marijuana is legal in 23 states and Washington, D.C., and recreational marijuana is legal in four states and Washington, D.C., as shown in the table above.
As an example, in Colorado, the state in which the author resides, medical and recreational marijuana is legal pursuant to Colorado Revised Statutes (C.R.S.) 12-43.3-101 et seq. and C.R.S. 12-43.4-101 et seq. Under these state statutes, in Colorado, persons suffering from debilitating medical conditions are exempt from the state’s criminal laws regarding marijuana possession, provided the patient or primary caregiver is in lawful possession of a registry identification card to engage or assist in the medical use of marijuana. With regard to recreational use and possession of the drug, under the state statute, in Colorado, it is legal for persons 21 years of age or older to possess and use a specific, limited amount of marijuana, and it is legal for licensed businesses to grow and sell marijuana, provided state regulations are followed.
Preemption of State Law by Federal Law
Under the Supremacy Clause of the U.S. Constitution, when state law conflicts with federal law, the federal law displaces, or preempts, the conflicting state law. Specifically, Article VI., Section 2, states, “[t]his Constitution, and the laws of the United States which shall be made in pursuance thereof; and all treaties made, or which shall be made, under the authority of the United States, shall be the supreme law of the land; and the judges in every state shall be bound thereby, anything in the constitution or laws of any State to the contrary notwithstanding.” As mentioned above, as of the publication date of this article, medical marijuana and recreational marijuana are legal in a number of states. However, because the U.S. Constitution is clear that federal law displaces state law, the growth, possession, use and sale of marijuana remains illegal under federal law. Therefore, the preemption of federal law regarding marijuana dictates how the drug and its associated businesses are treated by the U.S. government, including the USPTO.
Use of a Trademark in Commerce Must Be Lawful to Be Registrable with the USPTO
The USPTO Trademark Manual of Examining Procedure (TMEP) Section 907 explains that under Trademark Rule of Practice 2.69, “[u]se of a mark in commerce must be lawful use to be the basis for federal registration of the mark. . . . Generally, the USPTO presumes that an applicant’s use of the mark in commerce is lawful and does not inquire whether such use is lawful unless the record or other evidence shows a clear violation of law, such as the sale or transportation of a controlled substance.” This TMEP section even makes it clear that “[r]egardless of state law, the federal law provides no exception to the above-referenced provisions for marijuana for ‘medical use.’” TMEP § 907 citing Gonzales v. Raich, 545 U.S. 1, 27, 29 (2005) and United States v. Oakland Cannabis Buyers’ Coop., 532 U.S. 483, 491 (2001). Therefore, under TMEP Section 907, U.S. trademark applications with a filing basis of use in commerce that cover the sale or transportation of marijuana will be refused registration on the basis that the applicant’s use in commerce of the mark is not lawful.
A similar refusal will be issued for U.S. trademark applications filed on an intent-to-use basis that cover the sale or transportation of marijuana. Although an application based upon intent to use is not in direct violation of the CSA and because the mark is not yet in use in connection with a controlled substance, the intent to use application will still be refused registration because the products and/or services that the mark is intended to be used in connection with are unlawful and actual lawful use in commerce is not possible, therefore there is no bona fide intent to lawfully use the mark in commerce. As an example, U.S. Trademark Application Serial No. 86/235836 for the mark YE OLDE DOPE SHOPPE, filed on March 28, 2014, on an intent to use basis for “retail store services featuring marijuana and related consumer goods,” in International Class 35, was refused registration based upon the assertion that “[the] applicant does not have a bona fide intention to lawfully use the applied-for mark in commerce,” under Sections 1 and 45, 15 U.S.C. §§1051, 1127. Similar refusals have been issued against other U.S. trademark applications, including a U.S. application with a Section 44(d) priority claim, specifically, U.S. Trademark Application Serial No. 86/298477 for THE MEDICAL GRADE STANDARD for “marijuana or cannabis for medicinal and therapeutic purposes,” and “on line retail and wholesale store services featuring the sale of marijuana or cannabis for medicinal and therapeutic purposes.” The application was refused registration because the applicant’s goods and services consisted of, or included, items or activities that are prohibited by the CSA, and there was thus no bona fide intention to lawfully use the applied-for mark in commerce. Further, even certification marks are treated in the same manner, as shown in U.S. Certification Mark Application No. 86/288925 for KIND BUD INSTITUTE covering “marijuana products and materials,” which was refused registration because the items listed in the application were prohibited by the CSA. The examining attorney noted that, although a miscellaneous statement was entered in the record that the applicant would not engage in the production or marketing of marijuana materials or products, that is not the same as saying that the applicant would not “possess” or handle such products. If the applicant was testing marijuana products to assure compliance with its standards for purposes of certification, then the applicant was necessarily required to possess the marijuana, which was not lawful use in commerce.
Trademarks Including the Word “Marijuana” or Referencing Marijuana for Goods/Services That Are Lawful Are Registrable with the USPTO
Trademarks that reference marijuana, but are used in commerce on lawful products, such as clothing, are registrable with the USPTO. Similarly, trademarks that have a tangential relationship to the marijuana field, but do not involve the illegal “possession” of the product, are registrable with the USPTO. Examples are shown in the chart above.
How Do Owners of Trademarks for Marijuana Products and Services Protect and Police Their Marks in the U.S.?
As federal registration in the United States is not permitted for trademarks that cover the sale or transportation of marijuana, such trademark owners must rely on state trademark filings for the registration of these trademarks or rely on common law rights in the states in which they do business. With regard to policing, owners of trademarks for the sale or transportation of marijuana cannot rely on the Lanham Act to sue an alleged infringer for trademark infringement, and therefore have no basis to file a trademark infringement lawsuit in federal court. Section 32 of the Lanham Act, 15 U.S.C. § 1114, may not be used by the owner of a trademark for the sale or transport of marijuana to sue for trademark infringement because this section is limited to the infringement of trademarks registered with the USPTO. Although Section 43 of the Lanham Act, 15 U.S.C. § 1125, allows for owners of common law or unregistered trademarks to sue for infringement in federal courts, this basis is not available if the trademark owner’s use in commerce of the mark is not lawful under federal law. As a result, policing of trademarks that cover the sale or transportation of marijuana is limited to lawsuits filed in state court based upon state trademark rights. Similar challenges may arise for the owner of a trademark for marijuana products trying to police its mark in a domain name and on social media sites, as the trademark owner cannot rely on either a U.S. trademark registration or common law trademark rights recognized under federal law.
Because U.S. trademark registrations are required for recordation of trademarks with U.S. Customs and Border Protection (CBP), owners of trademarks for marijuana cannot avail themselves of the benefits of the CBP. Similarly, as trademark registrations are required for registration of marks with the ICANN Trademark Clearinghouse, owners of trademarks for marijuana may not rely on a U.S. trademark registration for recordation with the Trademark Clearinghouse, but may be able to utilize a trademark registration from another country that does allow for the registration of marks for marijuana products and services. While federal protection may not be available for a word mark with the USPTO, a two-dimensional logo may be registrable under U.S. copyright law as a work of the visual arts, provided it is copyrightable subject matter, because the U.S. Copyright Office does not require lawful use in commerce for its protectable works.
In conclusion, the legalization of recreational and medical marijuana in certain U.S. states has resulted in unique challenges for the owners of those businesses. Because marijuana is illegal under federal law, the protection and enforcement of trademarks covering the sale and transport of marijuana is not permissible under federal law. These trademark owners must avail themselves of trademark rights in the states in which they do business, as the USPTO and U.S. district courts are not available.
Although every effort has been made to verify the accuracy of items in the INTA Bulletin, readers are urged to check independently on matters of specific concern or interest.
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