Navigating Trademark Challenges for Cannabis Trademarks
As New York’s recreational cannabis market takes off (among other states) and new and existing businesses scramble to establish market share, cannabis businesses are reminded of the need to protect their valuable brands through trademarks. Proactive intellectual property (IP) strategies and vigilance are crucial for establishing and protecting unique and distinctive brands, avoiding potential pitfalls, and costly disputes. This article will delve into the use of trademark symbols, searching for trademarks, and the role of cannabis attorneys in protecting your brand.
Understanding Trademark Symbols
Using the TM Symbol on a Logo:
The TM Symbol (™) is used to indicate that a trademark is claimed, but it hasn't been officially registered with the United States Patent and Trademark Office (USPTO). It's often used for branding logos, names, and slogans to signify that the owner considers them their trademark.
On the other hand, the ® symbol (registered trademark) is used only once the trademark has been officially registered with the USPTO. Using the ® symbol without registration can lead to legal penalties and invalidate the trademark claim. Therefore, use the TM symbol for unregistered trademarks and switch to the ® symbol only after official registration to avoid legal repercussions and ensure proper protection.
Trademark Challenges in the Cannabis Industry
Federal restrictions on marijuana pose significant challenges for securing robust trademark protection at the federal level. Cannabis businesses are often limited to registering their marks with the US Patent and Trademark Office (USPTO) for ancillary products and services such as apparel and consulting. However, hemp-derived products that fall within the narrow scope of the 2018 Farm Bill’s carve-out for “hemp” can also be registered. This legislation excludes hemp (containing no more than 0.3% THC on a dry-weight basis) from the Controlled Substances Act’s definition of marijuana.
The Importance of Trademark Due Diligence
Performing due diligence on new branding initiatives is essential to understand potential risks and avoid conflicts with third-party brands. Clever and humorous branding that evokes well-known brands might seem tempting but can lead to expensive legal battles. For instance, a pair of Brooklyn cannabis bodegas operating under the name “Zaza R Us” faced legal action from the owner of the “Toys R Us” brand. The U.S. District Court for the Eastern District of New York issued an order granting the plaintiff’s claim for trademark dilution and enjoining the defendants from using the “Zaza R Us” mark. This case highlights the importance of appropriate trademark clearance strategies to prevent costly disruptions and forced rebranding efforts.
Federal vs. State Trademark Protection
Federal Trademark Protection
Currently, marijuana is categorized as a Schedule I prohibited substance under the Controlled Substances Act (CSA). Registering trademarks for cannabis brands on a federal level requires navigating the complex relationship with the USPTO, given marijuana’s illegal status under federal law. Despite this conflict, some trademark classifications may still be available to protect a cannabis company’s intellectual property, including its brand name, logo, trade dress, and more.
One primary consideration when registering a trademark at either the federal or state level is the “trademark class” in which to register a mark. The USPTO has granted trademark applications involving cannabis and cannabis-related goods and services in multiple trademark classes, including but not limited to:
Class 1: Fertilizer for cannabis and hemp markets.
Class 3: Body oils, soap, topical lotions, lipstick, eyeshadow, shampoo, and conditioner.
Class 4: Candles.
Class 5: CBD-infused beauty creams, cleaners, oils, masks, serums, and essential oils.
Class 11: Electric slow cooker for use in infusing oil.
Class 16: Packaging materials.
Class 21: Sealed containers for household use to maintain humidity levels in smoking materials.
Class 22: Bags specifically adapted for the extraction of herbs and essential oils.
Class 34: Cigarettes containing tobacco substitutes, hemp cigarettes made from industrial hemp, and electronic cigarette liquid used to refill cartridges containing cannabidiol (CBD).
Class 35: Online retail store services featuring subscription boxes containing hemp-based clothing and other hemp-derived products.
Class 39: Passenger transport.
Class 41: Hookah lounge services.
Class 43: Bar and cocktail lounge services.
Class 44: Farming services in the field of cannabis, providing a website with health information about cannabis, and massage therapy services involving the use and provision of cannabis-derived products.
Deciding which and how many classes to register a mark is a strategic decision, as multiple class applications can quickly increase costs. However, the classes registered are central to protecting a brand.
State Trademark Protection
Cannabis companies don’t need to wait for federal rescheduling of marijuana to obtain state trademark protections in states where medical or recreational marijuana is legalized. State registration offers legal protections regarding the use of a trademark in that state. Filing requirements differ from state to state, but generally speaking, state-level protections are available as long as the mark is actively used in that state.
Strategic Benefits of State-Level Trademarking:
Registering your cannabis products at the state level right now can be a strategic plan, serving as a crucial marker for eventual federal trademark registration when marijuana is federally legalized. Here’s why:
Early Protection and Enforcement: By securing state trademarks, cannabis businesses can protect their brands within specific states. This allows businesses to establish and enforce their rights locally, creating a strong brand presence and deterring potential infringers.
Building a Trademark Portfolio: State trademarks contribute to building a comprehensive trademark portfolio. This portfolio demonstrates the use and protection of the brand over time, which can be advantageous when transitioning to federal registration.
Establishing Prior Use: State-level trademark registration helps establish the date of first use in commerce, which can be critical in disputes over trademark priority. When federal trademarks become available, businesses with prior state registrations may have a stronger claim to the trademark based on their established use.
Preparation for Federal Changes: As the legal landscape evolves, having state trademarks positions cannabis businesses to quickly adapt to federal changes. If marijuana is rescheduled or legalized federally, businesses with state trademarks can more seamlessly transition to federal registrations, leveraging their established brand protection and market presence.
In May 2024, the U.S. Drug Enforcement Administration (DEA) issued a proposed rule to move marijuana from its current classification as a Schedule I drug to a Schedule III drug. This reclassification would loosen federal DEA restrictions on marijuana and acknowledge its accepted medical use and lower potential for abuse compared to Schedule I substance. If finalized, the implications of this proposed rule remain unclear, as it raises several questions about compliance with federal requirements and the coordination of federal and state regulations.
States Where Recreational Marijuana is Legal
As of April 2024, twenty-four states, along with Washington, D.C., and Guam, have legalized recreational marijuana. Here is a list of those states:
Colorado
Washington
Alaska
Oregon
Washington, D.C.
California
Maine
Massachusetts
Nevada
Michigan
Vermont
Guam
Illinois
Arizona
Montana
New Jersey
New York
Virginia
New Mexico
Connecticut
Rhode Island
Maryland
Missouri
Delaware
Minnesota
Ohio
These states have developed their own regulatory frameworks, including licensing requirements for dispensaries, taxation rates, and provisions for personal cultivation.
Conclusion
Navigating the complexities of trademark protection in New York's recreational cannabis market requires a strategic and proactive approach. By understanding the nuances of federal and state trademark laws, cannabis businesses can effectively protect their brands and intellectual property. Securing state-level trademarks now can serve as a valuable foundation for future federal registrations, ensuring that your brand is well-protected as the legal landscape evolves.
Conducting thorough trademark searches, monitoring for potential infringements, and engaging with cannabis attorneys are essential steps in maintaining and defending your brand. As more states legalize recreational marijuana and federal rescheduling looms on the horizon, being prepared and informed will give your business a competitive edge.
Ultimately, a well-protected brand not only helps avoid costly legal disputes but also builds consumer trust and loyalty. Stay proactive, consult with legal experts, and continuously adapt your strategies to ensure the longevity and success of your cannabis brand in this dynamic and rapidly growing market.
FAQS
Q1: What are the benefits of federal trademark registration for cannabis brands? Federal trademark registration offers broader protection across the U.S., helping to secure a brand’s intellectual property for ancillary products and services despite the challenges posed by marijuana’s current Schedule I status.
Q2: How can state trademark registration protect my cannabis brand? State trademark registration provides legal protections within the state, helping to safeguard your brand's use and establish the date of first use in connection with legal marijuana products.
Q3: What should cannabis businesses consider when selecting trademark classes? Businesses should carefully consider which trademark classes to register based on their products and services. Consulting with a cannabis attorney or trademark lawyer can help in making strategic decisions to optimize protection and manage costs.
Q4: How does the DEA's proposed reclassification of marijuana impact trademark protection? The proposed reclassification of marijuana to Schedule III could ease some federal restrictions, but the specific impacts on trademark protection will depend on how the new regulations are implemented and coordinated with existing state laws.
Q5: Why is trademark due diligence important for cannabis businesses? Trademark due diligence helps businesses identify potential conflicts with existing trademarks, reducing the risk of costly legal disputes and the need for rebranding.
References
DEA Notice of Proposed Rulemaking: DEA-1362
Monitoring the Future Survey: MTF 2022
National Survey on Drug Use and Health: NSDUH 2022
National Academies of Science, Engineering, and Medicine: The Health Effects of Cannabis
