In operating a cannabis business pursuant to applicable state law, you are likely to develop and make commercial use of proprietary names, logos, taglines and symbols. Because the names of your company and offerings are among the most highly coveted assets of your business, as a prudent company owner you should evaluate whether, how and where to register these trademarks with various government agencies.
In most industries, one may seek to obtain federal trademark protection for a company’s mark by filing an application with the United States Patent and Trademark Office (“USPTO”). In order for your mark to be registered with the USPTO, you must successfully claim that the mark is lawfully being used in interstate United States commerce. On the determination that cannabis operators cannot claim their marks are in “lawful use” in interstate U.S. commerce, the USPTO has repeatedly refused to register marks for goods or services being offered in violation of the Controlled Substances Act (“CSA”). If you file an application with the USPTO that identifies offerings that might be prohibited under the CSA, the USPTO will likely require you to provide a supplemental written statement to indicate whether your goods or services as stated in the application are compliant with the CSA and whether such goods or services enable others to directly purchase, trade, sell, or distribute cannabis or other substances prohibited under the CSA.
Notwithstanding the limitations on the federal registration of marks for goods or services that violate federal law, the USPTO has registered marks that identify non-plant-touching offerings relating to cannabis industry (such as lighters, pipes, medical education services, business consulting services and clothing). The USPTO has also registered marks that identify solely hemp-based products on the determination that the goods and services as stated in the application do not violate the CSA. Some operators have filed “intent to use” applications with the USPTO to identify bona fide prospective future uses of a mark, even if there is no current “lawful” use of the mark in interstate U.S. commerce. The USPTO will not issue an initial response to a newly filed trademark application for three to six months, so an intent to use application may appeal to applicants who believe that applicable laws, policies and/or jurisprudence affecting the likelihood of the USPTO to register industry-related marks may change in the near future.
States with a legal cannabis industry will likely also register industry-related marks, providing rights of exclusivity within their states. Applications will need to include evidence of current use of the applicant’s mark within the state. States usually do not allow for “intent to use” applications, so operators need to wait until their marks are in use within the applicable state to file their state trademark applications. Many states maintain their trademark registries through the state Department of State.
If the trade name for your business (the company name on your building signage, contracts and promotional literature) is different than the legal name of your company as registered with the state, you should also consider filing a Trade Name Application (in some states called a Fictitious Name Application), which will allow you to lawfully conduct business under a name other than the registered official name of your company. This application is usually filed with the same state agency to which you submitted the application to form your business.
When developing or promoting the names of your business, your products or the products of others, you should also screen the marks to make sure, to the maximum extent possible, that such marks do not make any express or implied health care claims, do not involve marks that could be construed as attractive to children, do not infringe on any rights for brands previously registered by others and do not misappropriate the rights of any famous people or entities. Operating a compliant business in the legal cannabis industry automatically involves a substantial number of legal hurdles. There is no need to add new problems to your already daunting list of legal concerns. You should check with an experienced attorney who can help you determine the best way to use and protect marks in the context of this highly unique and evolving industry.
Questions about this or any other cannabis law issues, please contact Jon Wachs at firstname.lastname@example.org.
ABOUT JON WACHS
Jonathan Wachs provides strategic counseling and operational advice to clients in the areas of intellectual property, commercial transactions and outsourced legal departments. As head of the firm’s Intellectual Property Group, Mr. Wachs works closely with clients to develop, register, analyze, enforce, and transfer intellectual property assets in a customized, cost-efficient, and highly effective manner. Additionally, he conducts intellectual property audits through which clients learn the nature and value of their intellectual property assets and the steps needed to protect such assets from misappropriation or dilution. As a business lawyer, he has successfully negotiated and completed several multimillion dollar business transactions and has served as general counsel to several small and midsize businesses and organizations in various industries and professions. He also manages a blog about intellectual property issues, Friday Factoids. Mr. Wachs co-manages New Paradigm Counsel, a service through which Offit Kurman delivers customized, comprehensive and cost-effective outsourced legal departments. Through New Paradigm Counsel, Jon served as outsourced general counsel for a government contractor, a large printing business, a payment processing company and an identity theft restoration business.
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