Trademarks are a popular and effective way of building and protecting a business’s brand. A trademark can be any word, name, symbol, or device, or any combination thereof that identifies and distinguishes a maker’s goods from those manufactured or sold by others.

Trademark owners enjoy certain intellectual property rights and protections against infringement. These rights are earned through the actual use of the mark in the marketplace or through registering the mark with either the state or federal government. Trademarks are source identifiers that distinguish competing products and give businesses brand recognition among discerning consumers. They are also powerful tools for growing businesses and start-ups.

Not all marks, however, are eligible for federal registration as a number of cannabis-touching businesses have learned the hard way.

Requirements for Federal Trademark Registration

The best way to protect your mark is to register it as a federal trademark. Federal trademark registration offers the business owner nationwide notice, constructive use, and protection. Constructive use allows the owner to protect the mark before it is used, as if it were used. Notice lets the public know that such a mark or logo exists and is protected. Should the business owner prevail in an infringement claim, registration affords it significant benefits such as a right to sue and enforce the mark in federal court, statutory damages, and in exceptional cases, attorney’s fees and costs.

Obtaining federal trademark registration requires filing an application with the United States Patent and Trademark Office (USPTO). The application must include the applicant’s domicile and citizenship, the date of the applicant’s first use of the subject mark, the date the mark was first used in commerce, the goods or services in connection with which the mark is used, and a drawing of the mark.

The USPTO requires that the goods and/or services the owner is seeking to register comply with all applicable laws and regulations in order to qualify for federal registration. In other words, the mark must be used in commerce across state lines and its use in commerce must be lawful in order to be eligible for federal protection.

Therefore, not all businesses can obtain federal trademark registration. The USPTO will reject a trademark application if the goods and/or services that the mark is used on is illegal or unlawful at the federal level.

This presents a significant hurdle for cannabis businesses that are operating “legally” within the bounds of state law and wish to expand their business beyond state borders without any legal consequences. Marijuana is currently classified as a Schedule I narcotic, akin to heroin, under the Controlled Substances Act, which makes the sale of it illegal at the federal level. Thus, because the use of marijuana in commerce is unlawful, marijuana companies are unable to meet the “lawful use in commerce” requirement and are consequently unable to obtain federal trademark registration to protect their marijuana mark.

The Trademark Trial and Appeals Board (“TTAB”) has consistently held that where the identified goods and/or services involve the distribution and dispersing of cannabis, an applicant cannot allege a “bonafide intent” to lawfully use the mark in commerce.

In In re JJ206, LLC, the applicant sought registration of two marks, POWERED BY JUJU and JUJU JOINTS, for cannabis vaporizing devices. The applications were rejected by the Examining Attorney for absence of a bona fide intent to use the marks in lawful commerce under Sections 1 and 45 of the Trademark Act, 15 U.S.C. §§ 1051, 1127. Under the CSA, it is “unlawful to sell, offer for sale, or use any facility of interstate commerce to transport drug paraphernalia, defined as 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 already unlawful under the CSA. The TTAB found that the vaporizing devices constituted as equipment primarily intended or designed for ingesting, inhaling, or otherwise introducing into the human body a controlled substance, or simply unlawful drug paraphernalia. As such, because the goods on which a mark is intended to be used must be lawful, the TTAB ultimately concluded that applicant’s use and intended use of the marks could not serve as the basis for federal registration.

Leaning on the decision in John W. Carson Found v. Toilets.com, Inc., the TTAB concluded it is a “legal impossibility” to meet the requisite bona fide intent when the identified goods are illegal under the CSA and the mark could not be used in lawful commerce. The TTAB’s decisions reinforces the well-established principal that the goods and/or services for which businesses are claiming trademark protection must be legal pursuant to federal law, and if they are not, then applications will be turned down, even if the goods or services are legal under state law.

A trademark that includes a graphic of a cannabis leaf, or the word cannabis itself, will not be rejected because of the substance of the mark alone. It will be rejected if the mark is used to brand cannabis-related goods and services. For example, in the JJ206 case, the applicant argued that its good should have been considered in the same league as vaporizing apparatuses but the TTAB saw it differently. “The identifications of goods and Applicant’s own evidence regarding its good make clear that its devises are in a different ‘league’ that violates the CSA.” Typically, a business that sells vaporizing devices could obtain federal trademark registration (in fact, the USPTO allowed the same company to register the POWERED BY JUJU mark for a vaporizer device that wasn’t used with cannabis) but here, the devices were being used for marijuana purposes and, thus, rejected.

In other words, the goods were touching cannabis. A business that touches the plant or products of the plant is always going to have a harder time registering a trademark than a business that is not directly involved with the plant. Any business that touches the cannabis plant cannot do business interstate (because of the current state of federal law) and, consequently, does not qualify for federal trademark registration.

Read more about recent cannabis developments and tips for starting and operating a legal cannabis business.

Stark & Stark’s NJ Cannabis Legal Services practice is knowledgeable about the latest regulatory and legal developments at both the state and federal level and can help you and your business navigate through the daunting and ever changing regulations legislation.

Stay tuned for more upcoming blogs and articles from the Cannabis Legal Services practice at Stark & Stark.