California Cannabis Trademarks are a No-Go

With California poised to legalize recreational cannabis in the coming weeks via Proposition 64, our intellectual property attorneys have seen an uptick in client inquiries about how to protect their brand at the state level. We’ve recently reviewed some of the basics of trademark law as applied to the cannabis industry, and for reference, those posts can be found here:

As a bit of quick background, there are three ways in which a brand owner can establish trademark rights:

  1. By using the mark in connection with their goods or services (legally) in commerce;
  2. By registering the mark with the United States Patent and Trademark Office (USPTO); and
  3. By registering the mark with an appropriate state trademark registry.

A federal trademark registered with the USPTO provides the most comprehensive brand protection, but because cannabis is still illegal under federal law, and because one requirement for registering a federal trademark is that the applicant has made “legal use” of the mark in commerce, the USPTO has continually refused to register marks for use on cannabis and any other goods and services that violate the Controlled Substances Act (CSA). Under the CSA, it is unlawful to sell, offer for sale, or use any facility of interstate commerce to transport drug paraphernalia, i.e., “any equipment, product, or material of any kind which is primarily intended or designed for use in manufacturing, compounding, converting, concealing, producing, processing, preparing, injecting, ingesting, inhaling, or otherwise introducing into the human body a controlled substance, possession of which is unlawful under the CSA.”

So we have advised our clients to use the state trademark registration process, coupled with federal registration of ancillary goods and services, as the best brand protection strategy currently available. Although the protection afforded by a state trademark is geographically limited to the state of registration, state trademarks do provide some level of protection greater than common law rights.

But though most states that have some form of either recreational or medical cannabis legalization allow business owners to file for state trademark protection, California is unique in that it does not. This has been a point of confusion for many clients who have successfully registered their trademarks in states like Washington, Oregon and Colorado, and hope to do the same in California. Unfortunately, the California state government has been steadfast in refusing to register marks used on cannabis. But with medical cannabis having been legal in California since 1996, what is the basis for this policy? The answer lies in Sections 14270-14272 of the Model State Trademark Law of the California Business and Professions Code, which are simply titled “Miscellaneous.” Section 14272 states the following:

The intent of this chapter is to provide a system of state trademark registration and protection substantially consistent with the federal system of trademark registration and protection under the Trademark Act of 1946 (15 U.S.C. Sec. 1051 et seq.), as amended. To that end, the construction given the federal act should be examined as non-binding authority for interpreting and construing this chapter.

So there you have it. California’s Model State Trademark Law contains a provision that calls for consistency between state and federal trademark law. This includes the “legal use in commerce” requirement, which requires legal use at both the state and federal levels.

In light of the impending legalization of recreational cannabis in California, revisiting this provision of the California state trademark law is warranted. We’ll be following this closely in hopes of a policy change that would allow cannabis business owners to obtain California state trademarks.