The clear tension between federal anti-drug laws and state laws that permit the legal operation of medical marijuana dispensaries has left purveyors of such businesses in a difficult position when it comes to protecting their brands.
As of July 2014, 23 states and the District of Columbia permit medical marijuana dispensaries to sell marijuana to qualified patients. Even so, the federal government has maintained its anti-drug stance to include the sale and distribution of medical marijuana products, as indicated under the federal Controlled Substances Act and its actions to shut down dozens of state-sanctioned marijuana businesses in the past.
Within the past few years, federal enforcement of such laws has reduced significantly, with Attorney General Eric Holder even issuing a memorandum on August 29, 2013 titled “Guidance Regarding Marijuana Enforcement,” instructing U.S. Attorneys not to prosecute marijuana businesses that comply with their respective state laws and do not engage in interstate commerce.
Given that interstate commerce is a key requirement to achieving federal trademark registration, this would make it impossible for a medical marijuana business to satisfy the PTO’s requirements without opening themselves up to federal prosecution. The PTO itself expressly disavows medical marijuana-related trademark applications, as demonstrated by an interesting series of events in 2010. In April 2010, the PTO initiated a new category of goods that appeared to give allowance to state-sanctioned medical marijuana businesses, via the following identification: “Processed plant matter for medicinal purposes, namely medical marijuana.” However a mere three months later in July 2010, the PTO reversed course and removed the category citing the addition of the category as a “mistake.”
Despite this reversal, Applicants who attempt to register marijuana-related trademarks with the PTO are expressly refused federal trademark applications for marijuana-specific goods and services as “scandalous” or “immoral.” For example, a trademark application for WASHINGTON’S FINEST CANNABIS was refused “because [the] applicant does not have a bona fide intention to lawfully use the applied-for mark in commerce.”
Some categories of marijuana-related goods and services, however, may be registered with the PTO, such as clothing, smoking accessories, wellness services, or educational services. During the prosecution of such a trademark, however, the PTO will require the applicant to show that the identified goods do not contain marijuana and are lawful under the Controlled Substances Act. Furthermore, the applicant may need to show that no marijuana is being distributed in conjunction with these goods or services. One strategy to work around this requirement may be to create a separately-owned business, apart from the marijuana dispensary business, that sells such products and services and have that business own the trademark.
The PTO’s reaction to registering marks that include the word MARIJUANA has been mixed. For instance, the PTO refused to register MARIJUANA as a trademark for an alcoholic tea product, on the grounds that it was both immoral and deceptively misdescriptive, but has registered trademarks containing the term in connection with t-shirts, educational seminars, magazines, and attorney services.
While trademark owners may have a difficult time at the federal level, state trademark protection is still a viable, though perhaps less advantageous option.
Finally, a marijuana business, like any trademark owner, must be careful not to infringe on non-marijuana brands as well. For instance, Hershey’s recently filed a suit in the District of Colorado against a marijuana candy distributor, alleging infringement of its famous candy wrapper trade dress. Marijuana trademark owners must also be careful when advertising their brands, since many states heavily regulate where and how marijuana can be advertised.
Given the current conflict between state and federal marijuana law, marijuana business owners will continue to face a challenging and uncertain legal landscape, but they can still act to maximize their intellectual property rights.
Credit to Andrew Goldberg, a Fish & Richardson Summer Associate, for his help with this post.
Kristen McCallion is a Principal in the New York office of Fish & Richardson and Chair of the firm’s Copyright Group. Ms. McCallion represents businesses in the consumer products, Internet, media, and interactive entertainment industries in copyright, trademark, trade...