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This is part 1 of a 3 part blog. Please click here to read Part 2 – Merely Descriptive & Geographically Descriptive. Please click here to read Part 3 – Government Insignia & Surname.


Despite being used lawfully in commerce, a trade or service mark may be refused registration by the United States Patent and Trademark Office (“USPTO”) under Section 2 of the Trademark Act of 1946 (the “Lanham Act”) if the proposed mark is “generic,” “merely descriptive or deceptively misdescriptive,” or likely “to cause confusion” with another registered or used mark.


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Courts recognize four trademark categories within which every mark must fall: (1) Generic marks, (2) Descriptive marks, (3) Suggestive marks, and (4) Arbitrary or Fanciful marks.[i] At the far end on the spectrum, warranting the greatest level of trademark protection, stands arbitrary or fanciful marks—those words which offer no inherent description of the product. On the opposite end of the spectrum lies generic marks—those made up of common descriptors to which courts afford no trademark protection.[ii]

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In addition to intellectual property and banking law, bankruptcy law remains a complicated field for marijuana companies to access, let alone navigate. In the United States, The U.S. Trustee Program (“USTP”) is the component of the Department of Justice (“DOJ”) responsible for overseeing the administration of bankruptcy cases. The USTP appoints and supervises the 1,100 private trustees who handle every bankruptcy case across the country under federal bankruptcy laws.

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In recent years, various government branches and departments across the country who are responsible for policing the government’s own trademarks have been sending cease-and-desist letters and filing suit against local businesses that are using trademarks likely to either cause confusion as to the government’s sponsorship of or affiliation with the companies or dilute the famous qualities of the government’s distinctive marks.

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While 46 states have instituted laws permitting or decriminalizing cannabis or cannabis-based products in some way, prior events this year created an environment of legal uncertainty.

Since 2013, cannabis companies have relied on guidance contained within a trio of memos from former deputy U.S. Attorney General James Cole, which detailed the federal government’s concerns with preventing marijuana distribution to minors, gangs, or into states where the drug’s sale remains illegal, as well as preventing the use of the drug as a pretext to traffic other illegal drugs, in use with violent firearms, driving under the influence, and growing marijuana on public lands or on federal property.

Those companies who were compliant with state cannabis laws and did not run afoul of any of these concerns basically considered themselves as being safe from federal prosecution.

But that security diminished earlier this year when U.S. Attorney General Jeff Sessions rescinded the guidance in the Cole memos.
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Recently, U.S. Representative Matt Gaetz introduced the Medical Cannabis Research Act (the “Act”), which would facilitate and encourage federally-approved clinical trials testing the medicinal effects of chemicals found in the marijuana plant. The bill is notable because, if passed, it would bypass the U.S. Department of Justice (DOJ) as it relates to marijuana research licenses and would put the task in the hands of Congress.

Currently, the House Judiciary Committee, which is responsible for the drug enforcement efforts of the federal government, approved the measure. If this bill passes, it would provide an opening for more medical marijuana research, which has been virtually non-existent at the federal level over the last five decades.

Notably, the Act increases the number of federally-approved manufacturers of research-grade marijuana from one to three and sets strict criteria for those manufacturers to obtain and renew their registrations. Currently, only the University of Mississippi is permitted to grow research-grade marijuana.


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On September 5, 2018, New Jersey Governor Phil Murphy announced that the NJ Department of Health (DOH) had received 146 applications from 106 different organizations to operate vertically integrated medical marijuana dispensary operations in the state. The application window closed on August 31, 2018 and the winners of the six for-profit licenses will be announced on November 1, 2018.

Each applicant had to identify in which of the three regions of New Jersey – North, Central, and South – the applicant was interested in operating an Alternative Treatment Center (ATC). Fifty applicants identified the northern region, 45 selected the central region, and 51 the southern region.


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In 2017, two registration prohibiting provisions of the Trademark Act of 1946 (“The Lanham Act”) were found unconstitutional under the First Amendment. These decisions raise important considerations for persons and companies whose trademarks may have been previously denied registration on such grounds or those considering registration of plausibly disparaging or scandalous marks.

In Matal v. Tam, 137 S. Ct. 1744, 1765 (2017), the lead singer of the rock group “THE SLANTS” appealed The United States Patent and Trademark Office’s (USPTO) refusal to register his band name as a trademark on the principal register due to a Lanham Act provision which prohibits registration of marks that may “disparage . . . or bring . . . into contemp[t] or disrepute” any “persons, living or dead.” 15 U.S.C. §1052(a).

The band members sought to take control of an Asian ethnic stereotype commonly used to criticize them but were denied registration because “slants” is a derogatory remark used to disparage those of Asian descent.


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As of September 2018, nine states, including the District of Columbia, allow adult-use (recreational) marijuana and thirty-one states have adopted laws legalizing the sale and use of medical marijuana. The possession and sale of marijuana, however, remains illegal at the federal level due to the Controlled Substances Act’s classification of marijuana as a Schedule I narcotic alongside heroin, LSD, and ecstasy.

For a cannabis business operating within the bounds of state law seeking to enter the marijuana industry, the juxtaposition of marijuana’s quasi-legality raises important legal and practical concerns, one of the most pressing being access to banking. The Federal Bank Secrecy Act (the “BSA”), 31 U.S.C 5311 et seq, prohibits national financial and banking institutions from accepting money generated from the sale of cannabis, often forcing marijuana companies to operate on a cash-only basis and putting them at risk of criminal activity. The cannabis industry’s bout with banking has somewhat of a rocky history.


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With medical marijuana legal in more than half of the United States and nearly 70% of the country having access to medical marijuana, the clinical research on the health benefits and healing properties of cannabinoids is contributing to the growing empirical studies and evidence supporting the use of marijuana as an effective medicine.

Frustratingly, however, many medical cannabis patients suffering from debilitating conditions and diseases such as multiple sclerosis, cancer, muscular dystrophy, seizure disorders, anxiety, migraines, and chronic pain, must solely bear the cost of medicine in the form of cannabis because it is not covered by healthcare insurance. Although a physician’s recommendation of cannabis for a patient’s qualifying ailments is no different than a script for opioids, anticonvulsants, or antidepressants, the patient’s health insurance provider will cover the cost of the latter but not the former.

Why? Several reasons.


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