It is perplexing there is still a belief (even among some trademark practitioners) that it is possible to file federal trademark applications at the U.S. Patent and Trademark Office for cannabis-related goods or services when the likelihood of such registrations is virtually impossible. The reason is the continued refusal by USPTO, affirmed by the Trademark Trial and Appeal Board (TTAB), to register these marks. The following will outline the most recent cases and should explain the reasoning for this.
Cases
The most recent TTAB decision involving a cannabis-related goods mark was In re PharmaCann LLC.[1] Applicant PharmaCann had sought registration of both:
PHARMACANN and PHARMACANNIS for “retail store services featuring medical marijuana” in International Class 35, and “dispensing of pharmaceuticals featuring medical marijuana” in International Class 44.
Applicant argued that its intended use (i.e., medical marijuana) were lawful use based on the Cole Memo, which at the time of the decision, directed the Justice Department to minimize prosecutions for medical marijuana use.[2] Applicant’s novel second argument was that Congressional authority was consistent with the Justice Department by approving several appropriations bills defunding Justice task groups focused on medical marijuana prosecutions.[3] The TTAB affirmed the refusals on appeal, and rejected both of Applicant’s arguments. The TTAB found Applicant’s arguments unpersuasive because, although Congress has defunded medical marijuana prosecutions through its appropriations riders, it could always change its mind at a later date.
As a matter of fact, these riders, collectively called the Rohrabacher-Blumenauer Amendment, which defunds the Justice Department’s prosecutions of state-sanctioned adult-use cannabis laws, has not been renewed officially as a result of the congressional resolutions extending the federal budget all throughout 2017. It is important that the rider is attached to new federal budgets approved by Congress each year, and has been routinely added to budgets since 2014. However, in 2017, lack of Congressional approval of a budget has resulted in Justice Department funding for prosecutions of legal state cannabis laws, and validates the PharmaCann holding given the current political climate.
The second case In re JJ206, LLC.[4] Applicant JJ206 had sought registration of:
POWERED BY JUJU, for “smokeless cannabis vaporizing apparatus, namely, oral vaporizers for smoking purposes; vaporizing cannabis delivery device, namely, oral vaporizers for smoking purposes,” in International Class 34; and
JUJU JOINTS, for “smokeless marijuana or cannabis vaporizer apparatus, namely, oral vaporizers for smokers; vaporizing marijuana or cannabis delivery device, namely, oral vaporizers for smoking purposes,” in International Class 34.
Both applications were refused for lack of lawful use in commerce. Upon appeal, the TTAB affirmed. The TTAB took issue with Applicant’s goods falling within the definition of “illegal drug paraphernalia under the Controlled Substance Act (CSA).” Never mind the fact that trademark refusals can be made on cannabis goods or services itself, but cannabis paraphernalia can be refused, as well.
The third case is In re Morgan Brown.[5] Applicant Morgan Brown sought registration for:
HERBAL ACCESS, for “retail store services featuring herbs,” in International Class 35. Applicant further disclaimed exclusive right to “herbal.”
The application was refused for unlawful use in commerce, namely the services were in conjunction with marijuana. Upon appeal, the TTAB agreed, affirming the refusal, specifically noting the supporting evidence of Applicant’s own specimens showed photographs of the store with HERBAL ACCESS on a sign which included, among other things, a green cross and a slogan which read, “Marijuana for the Masses.” Although neither the mark nor the identification of goods and services did not explicitly state “marijuana” or “cannabis,” but “herbal” and “herbs,” the TTAB rejected this outright, rationalizing:
generalized language in goods and services identifications [written] in order to sidestep refusals where a particular good or service falls within the generalized identification and the evidence shows the applicant’s actual use involves the specific good or service that is subject of the refusal.[6]
The TTAB re-enunciated a test for unlawful use, namely:
Registration generally will not be refused based on unlawful use in commerce unless either (1) a violation of federal law is indicated by the application record or other evidence . . . , or (2) when the applicant’s application-relevant activities involve a per se violation of federal law.[7]
This case stands for the proposition that even a sophisticatedly written identification will not survive a registration refusal by a Trademark Examining Attorney.
Analysis
Examination of federal trademarks are guided by the Trademark Manual of Examining Procedure (TMEP), and the USPTO has consistently refused registration of marks for cannabis-related goods or services. The TMEP states use of a mark in commerce must be lawful use to be the basis for federal registration.[8] Therefore, the goods or services to which the mark is being applied must comply with all applicable federal laws.[9]
TMEP 907 indicates if the mark or the identified goods or services are unlawful, actual lawful use in commerce itself is not possible.[10] TMEP 907 further indicates that the mark itself or the goods or services violate federal law, an inquiry consistent with 37 C.F.R. §2.69 or refusal must be made. The “fact that the provision of a product or service may be lawful within a state is irrelevant to the question of federal registration when it is unlawful under federal law.[11] For example, evidence indicating that the identified goods or services involve the sale or transportation of a controlled substance or drug paraphernalia in violation of the Controlled Substances Act (CSA).[12] The CSA includes marijuana on its Schedule I, and this would be enough for a basis for, at a minimum, an inquiry or, at most, a refusal.[13] At the federal-level (i.e., interstate commerce) it is illegal to manufacture, distribute, or dispense a controlled substance (i.e., marijuana), or to possess, sell, offer for sale, or use any facility of interstate commerce to transport marijuana or its paraphernalia.[14] Further, regardless of state law, the TMEP further states that marijuana, marijuana extracts, and the psychoactive component tetrahydrocannabinol (THC) remain Schedule I controlled substances under federal law and are subject to the CSA’s prohibitions.[15] The TMEP additionally states that these prohibitions apply further to cover the distribution and dispensing of medical marijuana.[16]
There is a counter-argument by some practitioners that creatively-crafted identifications of goods and/or services will save the day. They point to the federal registration of CANNABIZ as the premier example. CANNABIZ, for “computer application software for computer networks, servers, desktop computers, mobile devices, handheld computers, namely, governance, risk, and compliance software for managing, operating, monitoring, controlling security applications, business computer hardware, database management and server systems providing for tracking, managing, accounting, reporting and compliance with governmental regulations of the medical marijuana industry,” in International Class 9, was registered on September 5, 2017. However, this trademark was directed toward software goods, and not cannabis goods or services itself.
Another application for CANNABIZ, for “holistic health services featuring herbal medicine,” in International Class 44, was refused registration as a service mark. During prosecution, an office action was mailed with a requirement for information (TMEP 814), where the Examining Attorney requested applicant to answer the following questions:
- Do applicant’s identified services provide for or enable users of the services to directly purchase, trade, exchange, barter, sell, distribute or disseminate marijuana, cannabis, hemp, marijuana-based, cannabis-based or hemp-based preparations, or marijuana, cannabis or hemp-based extracts or derivatives, synthetic marijuana, or any other illegal controlled substances?
- Do applicant’s services themselves feature the use of marijuana, cannabis, hemp, marijuana-based, cannabis-based or hemp-based preparations, or marijuana, cannabis or hemp-based extracts or derivatives, synthetic marijuana, or any other illegal controlled substances? If so, which ones?
- To the best of applicant’s knowledge and belief, are the services on which the mark is/will be used compliant with the federal Controlled Substances Act as outlined above?
Applicant did not file a proper response, presumably because applicant could not answer truthfully that the services were directed towards cannabis, and the application went abandoned on January 23, 2018.
While this author does not support this decision, the USPTO will continue to refuse federal trademark registration for marks directed towards cannabis-related goods or services. The current USPTO stance, unfortunately, is not expected to change. No amount of clever arguments will change the fact marijuana is on the CSA Schedule I list; only Congressional action will do that, and it is highly unlikely in the current day.
Practicum
Notwithstanding, there is an alternative to federal trademark registration. Currently, in the adult-use cannabis states, there are several state trademark registration regimes in place. Colorado, Washington, Alaska, Oregon, Nevada, and California all allow state trademark applications for cannabis-related goods and services. Additionally, Massachusetts and Maine are preparing trademark guidelines for applications in their respective states. Michigan also now allows trademark applications for lawful medical marijuana goods and services. Fees for state trademark applications are also cheaper than federal trademark applications. For example, California charges $70.00 per class, per application (as opposed to $225.00 to file a TEAS Plus application with the USPTO). These state trademarks, however, are limited to the territory of that particular state, and have their own registration processes and regulations unique to that state’s laws.
Conclusion
The USPTO has taken a hardline approach to trademark protection for cannabis-related goods or services, evidenced by the TTAB case law. This stance will certainly not change during the current political climate. However, in order to protect a cannabis company’s business interests, state trademark regimes should be considered as an alternative.
[1] 123 U.S.P.Q.2d 1122 (T.T.A.B. June 16, 2017).
[2] This argument is moot, given that the current Attorney General has rescinded the Cole Memo (the “Sessions Memo”).
[3] Again, mooted by the Sessions Memo.
[4] 120 U.S.P.Q.2d 1568 (T.T.A.B. 2016).
[5] 119 U.S.P.Q.2d 1350 (T.T.A.B. 2016).
[6] Id. at 1355; see generally In re Reed Elsevier Props., Inc., 482 F.3d 1376, 1379 (Fed. Cir. 2007).
[7] Brown, supra at 1351.
[8] See TMEP 907 and 1205.01(a); citing Gray v. Daffy Dan’s Bargaintown, 823 F.2d 522, 526, 3 U.S.P.Q.2d 1306, 1308 (Fed. Cir. 1987).
[9] Id. See also In re Pepcom Indus., Inc., 192 U.S.P.Q. 400, 401 (T.T.A.B. 1976) (“in order for [a trademark] application to have a valid basis that could properly result in registration, the use of the mark [has] to be lawful, i.e., the sale or shipment of a product under the mark [has] to comply with all applicable laws and regulations. If this test is not met, the use of the mark fails to create any rights that can be recognized by a Federal registration.”).
[10] See PharmaCann, supra at 1124; JJ206, supra at 1569.
[11] See Brown, supra at 1351.
[12] See TMEP 907; 21 U.S.C. §§801-971.
[13] See JJ206, supra at 1569-70; Brown, supra 1351-53.
[14] See TMEP 907; 21 U.S.C. §§ 812(b)(1)(B), 841(a)(1), 844(a), 863.
[15] See 21 C.F.R. §1308.11; JJ206, supra at 1571; Brown, supra at 1352.
[16] See PharmaCann, supra at 1126.