Global IP Matrix - Issue 6

Is the USPTO
ready for Bud?
As discussed by Michele Katz, Partner at Advitam IP
www.advitamip.com
Since the early 1900s, marijuana
has faced many limitations
from the state and federal
governments because of its
status as a Schedule I drug
under the Controlled Substances
Act (“CSA”), i.e., it was illegal. 1
Trademark law is one of those
areas. While both levels have
lifted some of these limitations,
they have not progressed at the
same pace or scope.
In recent years, a great shift in U.S. public
and political opinion favoring the drug has
triggered a trend of legalisation across many
state lines and the District of Columbia.
Legalisation includes either full legalisation,
medical use, recreational use, cannabisinfused
products, or a combination thereof.
Currently, approximately only eighteen
percent (18%) of the states still considers
marijuana illegal, which means that eightytwo
percent (82%) of the states have legalised
marijuana in some capacity. 2
Despite this shift, marijuana is still
classified as a Schedule I drug, and federal
trademark law dictates that applicants
may not secure trademarks for “unlawful”
goods and services. 3 But on December 20,
2018, Congress amended the Agriculture
Improvement Act of 2018 (“2018 Farm Bill”)
and removed hemp (not marijuana as a
whole) from the CSA’s definition of marijuana.
(Hemp refers to a very specific form of
cannabis plants and derivatives where the
cannabidiol (“CBD”) does not exceed 0.3%
delta-9 tetrahydrocannabinol (“THC”). 4 ) So
while the federal government only allowed
CBD products with trace THC, the majority
of state governments have legalised marijuana
to a greater extent.
With this change in federal law, the
United States Patent and Trademark Office
(“USPTO”) was obliged to comply and
issued an examination guide on May 2, 2019,
providing guidelines for applicants seeking
to register trademark applications filed
after December 20, 2018, in connection to
the newly legalised hemp-based goods and
services.
The intent of trademark protection is to
motivate an owner to create something of
value in the minds of potential consumers
by impregnating a market. 5 Accordingly,
there are two primary purposes of trademark
protection: (1) enable “consumers to
distinguish among competing products” and
(2) protect an owner’s interest and reputation
by securing “the goodwill of his [her]
business[.]” 6
By only allowing specific hemp-based
registrations and denying the rest, applicants
are left with inconsistent trademark
registrations for cannabis-related goods and
services, which could potentially decrease
the value of a federally registered trademark
in the eyes of applicants. Considering that
over eighty percent (80%) of the states have
legalised marijuana in some way, commonlaw
trademark protection will presumably
become more relevant than federal protection
as it relates to the cannabis industry. This
trend may potentially create chaos and
confusion amongst consumers and owners
alike.
To further complicate this issue, the
USPTO has surprisingly granted trademark
applications in connection to cannabisrelated
goods and services prior to the
2018 Farm Bill. For example, CANNABIS
ENERGY DRINK (U.S. Reg. No. 4315305)
registered to the principal register on April
9, 2013, in connection to energy, sports, and
performance drinks containing cannabis
seed or stem extract. Similarly, MJARDIN
PREMIUM CANNABIS (U.S. Reg. No.
4714986) registered to the principal register
on April 7, 2015, in connection to engineering
and consulting services in the field of
agriculture. 7 Furthermore, CCOP (U.S. Reg.
No. 4651863) registered to Medical Marijuana,
Inc. on December 9, 2014, in connection to
edible hemp-based products.
These examples highlight the inconsistency
already present at the federal level as to
cannabis-related goods and services. By
granting a few cannabis-related marks and
then rejecting others, the policy underlying
trademark law is not being served. That, plus
the disparity between the state and federal
legality of cannabis, creates 1) difficulty for
consumers to differentiate between competing
goods and services (state verses interstate
commerce) and 2) a potentially impossible
task for brand owners to carve out their
market share nationwide.
To effectively execute the purpose and intent
of federal trademark protection, Congress
must consider recent shifts in public and
political opinions favoring cannabisrelated
goods and services. Businesses
continuously turn to Congress and
administrative agencies such as the USPTO
to ensure commercial and economic growth.
Disparities between state and federal
restrictions significantly hinder this growth.
As such, legitimate businesses seeking
cannabis-related trademarks will continue
to receive inconsistent and insufficient
protection until cannabis is fully addressed
by Congress.
1 21 U.S.C. § 802.
2 Map of Marijuana Legality by State, DISA Global Solutions
(Oct. 2019), https://disa.com/map-of-marijuana-legality-bystate
(last visited Nov. 2019).
3 37 C.F.R. §2.69.
4 Examination Guide 1-19: The Examination of Marks for
Cannabis and Cannabis-Related Goods and Services after
Enactment of the 2018 Farm Bill (May 2, 2019), https://www.
uspto.gov/sites/default/files/documents/Exam%20-Guide%20
1-19.pdf
5 Mishawaka Rubber & Woolen Mfg. Co. v. S.S. Kresge Co., 316
U.S. 203, 205 (1942).
6 Amazing Spaces, Inc. v. Metro Mini Storage, 608 F.3d 225,
250 (5th Cir. 2010).
7 Although the connected services do not clearly state the
relation to cannabis, the mark itself is an obvious indication of
the particular services within agriculture.
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