Demystifying Trademarks and Protecting Your Brand in the Cannabis Industry
In today’s rapidly growing marijuana industry, where new cannabis companies and products are emerging daily, existing cannabis companies are taking action to protect their brands. One of the most traditional ways to establish and protect a brand is by federally registering a mark or logo as a trademark. Unfortunately, because marijuana is still illegal under federal law, cannabis companies have been refused federal trademark registration and protection.
The Lanham Act defines a trademark as a mark used in commerce in connection with a particular good or service. It also prohibits the registration of products that cannot lawfully be sold across state lines in the United States. Since marijuana and its psychoactive component THC remain a Schedule 1 controlled substance under federal law, marijuana is subject to the prohibitions of the Controlled Substances Act. (21 C.F.R. § 1308.11)
The CSA defines marijuana (or “marihuana”) as “all parts of the plant Cannabis sativa L., whether growing or not; . . . the resin extracted from any part of such plant; and every compound, manufacture, salt, derivative, mixture, or preparation of such plant, its seeds or resin.” 21 U.S.C. § 802(16). Product, material, or equipment primarily intended or designed for use in ingesting, inhaling, or otherwise introducing cannabis or a controlled substance into the human body constitutes unlawful drug paraphernalia under the CSA. 21 U.S.C. § 863. Thus, because marijuana falls within the prohibitions of the CSA, it is illegal under the federal law and therefore the “use” of the mark under the Lanham Act is unlawful.
For example, in the 2016 decision of In Re Morgan Brown, the Trademarks Trial and Appeal Board affirmed the rejection of the mark HERBAL ACCESS to be used to cover its retail store featuring all kinds of herbs, including marijuana, because the sale of marijuana made the use “unlawful” under the Lanham Act. Even though the store would provide other herbs that are not illegal, the “use” was still found to be unlawful. Additionally, the TTAB held that the fact that a product or service may be lawful within a state is irrelevant for federal registration purposes when it is still unlawful under federal law. In re Brown, 119 USPQ2d 1350 (TTAB 2016).
In the 2016 decision of In Re Juju Joints, the applicant attempted to trademark its cannabis products and like vaporizing apparatus based on the fact that the Department of Justice implemented a memorandum, which sought to avoid prosecution of caregivers for providing medical marijuana or individuals for using medical marijuana, so long as the “actions are in clear and unambiguous compliance with existing state laws providing for the medical use of marijuana.” Although the applicant was complying with state law, the trademark refusal was affirmed because the memorandum was intended only as an investigative guide and could not override the CSA. In re JJ206, LLC, 120 USPQ2d 1568 (TTAB 2016).
However, one company has been successful in maneuvering around the Lanham Act’s “lawful use” requirement. Woodstock Ventures, the producers of Woodstock festival, hold federal trademark registrations for the mark WOODSTOCK in connection to a variety of goods like audio records, movies, TV shows, concerts, clothing, and other promotional merchandise that on their face have no obvious relationship to cannabis. Woodstock Ventures later expanded its sale of goods into smoking articles in 1994 and eventually began selling cannabis in 2017 under the same mark. Since Woodstock is the owner of the registered mark, Woodstock is free to use its own mark, this time for selling recreational cannabis. Although the initial registration of the mark did not include cannabis, Woodstock argued that cannabis is within the natural zone of expansion because the mark is already strongly associated with cannabis. Woodstock Ventures LC v. Woodstock Roots, LLC, 387 F. Supp. 3d 306 (S.D.N.Y. 2019).
Woodstock Ventures’ mark was further protected by the court in its trademark infringement case against Woodstock Roots, another company selling smokers’ articles and related goods like electronic cigarettes, vaporizer pipes, and cigarette rolling papers under the registered mark WOODSTOCK. In this case, both companies battled over who could use the mark for selling cannabis. Woodstock Roots sought an injunction against Woodstock Ventures claiming Woodstock Ventures was infringing on Woodstock Root’s right to use the mark for smokers’ articles and related goods. Woodstock Roots claimed to have been using its mark in connection with smokers' articles before Woodstock Ventures began selling cannabis, and because cannabis is a related good, it is within Woodstock Roots’ logical zone of expansion under trademark law. However, when Woodstock Roots applied for the federal registration, it represented that the mark would not be used in connection with cannabis products. This is distinguishable from Woodstock Ventures’ registration because it made no such promise to refrain from using their mark to sell cannabis products.
Nonetheless, the court ruled in the favor of Woodstock Ventures and denied the injunction to prevent Woodstock Ventures from selling cannabis under the mark. The court reasoned that there was no likelihood of confusion between the marks in the sale of recreational cannabis because Woodstock Root’s mark is not used in the sale of cannabis at all. Additionally, the court found that it could not give weight to Woodstock Root’s zone of expansion argument because cannabis is still federally illegal and Woodstock Roots had agreed not to sell cannabis under its mark. Thus, Woodstock Ventures was not enjoined from using its mark to sell recreational cannabis, and the mark is currently being used to sell recreational cannabis today!
How Cannabis Brands Can Protect Themselves
Despite the above limitations to registering cannabis products, there are other ways to protect cannabis brands. Cannabis companies may still achieve registration of their trademarks at the state level in states where cannabis is legal. Although state registration cannot provide as much protection as a federal registration, state registration can still be an effective way to use state law to prevent local competitors from infringing on one’s mark. One caveat, however, is that state registration will not protect against a similar trademark operating in another state.
Additionally, cannabis company owners can register trademarks for ancillary products and services. For instance, a marijuana business may register its mark for non-marijuana products like clothing or coffee cups or other branding merchandise. The purpose of obtaining protection for the non-marijuana related goods is so that when cannabis becomes federally legal, then it will be much easier for those companies to protect their brands because they will already have pre-existing registrations for related goods and services. One requirement for this strategy is that these companies should actually be selling the ancillary goods in commerce.
Lastly, companies selling CBD products with low THC levels are currently capable of being registered as a federal trademark because CBD-based products are legal under the federal law. The CBD goods listed under the federal registrar must specify that they contain less than 0.3% THC.
Navigating the world of trademarks throughout both the federal and state level can be challenging without thoughtful and reliable representation. The Vivid team stands ready to protect your cannabis trademarks. To set up a consultation, send us a message!
