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Federal Solutions to Marijuana-Based Trademark Issues: Part 2

In the first article in our three-part series, Legalized But Not Recognized: Brand Protection Without Federal Registration, we provided a brief overview of the obstacles cannabis businesses face in protecting their brand identity: i.e., the absence of a right to obtain federal trademark registration for marijuana related goods and services and related domain name protection concerns. In our second part, we set forth a range of federal-law-based solutions to those challenges.

2018 Farm Bill

The Agriculture Improvement Act of 2018 (the “Farm Bill”) amended the federal Controlled Substances Act (“CSA”), under which marijuana is considered a Schedule 1 drug, to remove “hemp” from the definition of marijuana. Hemp encompasses cannabis plants and derivatives that contain less than 0.3% tetrahydrocannabinol (commonly referred to as “THC”) on a dry-weight basis. Cannabis businesses are therefore able to obtain federal trademark and service mark registration for goods and services related to such cannabis plants and derivatives, which include cannabidiol (“CBD”). However the U.S. Patent and Trademark Office (the “USPTO”) has stated it will refuse registration for marks related to foods, beverages, dietary supplements, or pet treats derived from CBD that haven’t been approved by the U.S. Food and Drug Administration (the “FDA”). Such goods cannot be lawfully introduced into commerce because the Federal Food Drug and Cosmetic Act (“FDCA”) prohibits the use in foods or dietary supplements of a substance undergoing clinical investigations by the FDA, which is the case for CBD. Nevertheless, CBD products not intended for human/pet consumption (e.g., topical gels infused with CBD) can be the subject of trademark registrations, and as the FDA’s clinical investigations progress, it is likely that opportunities will arise to register marks for CBD food and beverage products.

Registration of Ancillary Goods

The Farm Bill expanded the universe of cannabis-related goods and services for which federal trademark and service mark registration is directly available, but also indirectly opened additional pathways for cannabis businesses to protect their brand identity.

Cannabis businesses that handle the marijuana plant may be able to protect their brand identity if they also sell CBD products or services, or if they sell other goods or services that are primarily designed for an otherwise lawful alternative use. Registration of trademarks and service marks for such ancillary goods or services, e.g., vaporizers or CBD products can act as the proverbial camel’s nose in a very large tent.

As described in our first article, these registrations grant the registrant a suite of rights attributable to the products or services described in the applicable registration (most significantly, perhaps, being a legal presumption of ownership, the exclusive nationwide right to use the mark and the ability to bring infringement and other claims before federal courts). More importantly from a long-term strategic perspective, cannabis businesses that have registered trademarks or service marks for such ancillary goods or services may also oppose applications for the registration of the same (or confusingly similar) marks covering related cannabis products in the event that cannabis is no longer prohibited under the CSA. A similar benefit may be available to businesses selling CBD products that aren’t intended for human or pet consumption: they may be entitled to oppose registration of the same (or confusingly similar) marks for CBD products intended for human (or pet) consumption if CBD is ultimately approved for such purposes. This is true because a federal trademark or service mark holder could viably assert rights in such mark as used in connection with goods and services that fall within the scope of “natural expansion” of their currently protected goods and services. Accordingly, an important reason for trademark protection is to prevent consumer confusion as to the source that may stem from another’s use and/or attempt to register the same or a similar mark in connection with related goods and services that may otherwise fall within that zone of expansion.

Holding marks for ancillary goods or services will also afford cannabis businesses the advantages they otherwise lack under the remedies available to challenge improper registration of domain names, which are detailed in our first article. They will not face the heightened burdens common law and state registered mark holders face in such proceedings, namely a showing of distinctiveness or fame.

Unregistered Trademark Protection

Under the Lanham Act, the principal federal trademark statute, cannabis businesses can make use of unregistered trademarks and service marks (also known as “common-law” marks) related to the sale of ancillary goods and CBD. Such marks lack the aforementioned suite of rights granted to registered marks, but are nevertheless afforded some protection under the statute. Section 43(a) of the Lanham Act prohibits trademark infringement and any false or misleading facts from being used in advertising and promotion to mislead about another’s goods, services, or commercial activities. While unavailable for unregistered trademarks and service marks covering marijuana, Section 43(a) can be a useful tool for marks covering ancillary goods and CBD.

State and Common-Law Solutions

In the last of our three-part series, we will focus on state and common-law solutions that afford a level of protection that, while less robust than the protection offered to federally registered trademarks, can nevertheless be useful in establishing and protecting the goodwill associated with marijuana-related goods and services. Stay tuned!

Partner Jeffrey Johnson and Vedad Tabich co-authored this article. Jeff leads the firm’s Cannabis practice is a member of Pryor Cashman’s Intellectual Property, Corporate and Technology Groups; Vedad’s admission to the New York Bar is pending. Partner Teresa Lee, who co-chairs Pryor Cashman’s Trademark Practice, also contributed to the article.

Jeffrey Johnson

Jeffrey Johnson

Jeffrey Johnson is a Partner and member of Pryor Cashman’s Intellectual Property, Corporate and Technology Groups and leads the firm’s Cannabis practice.


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