[From Cannalex: Our colleague Dave Oppenhuizen is a patent and trademark lawyer registered with the United States Patent and Trademark office. He is a member of the Michigan Bar Association’s Marijuana Law Section, and provides intellectual property legal advice to various clients, including those considering state legal marijuana-related activities. His insights on trademarks in the age of legalized marijuana follow.]
For a number of reasons, there is limited value to owning a trademark in Michigan for cannabis-related products under Michigan’s current law. However, this is about to change dramatically once the Medical Marihuana Facilities Licensing Act (“MMFLA”) becomes effective in late 2017.
- Because licensed growers under the MMFLA will be able to cultivate up to 1500 plants.
- Because processing centers licensed under the MMFLA will be able to process the raw product into marijuana-infused product, oils, and tinctures.
- Because provisioning centers licensed under the MMFLA will be able to obtain the product from the processing centers and sell it to licensed patients.
The growers, processing centers, and provisioning centers will be supplying, processing, and selling quantities of medical marijuana that is exponentially greater than any single licensed caregiver can currently sell.
This new system under the MMFLA will also create distance and separation between growers and patients, unlike the system that exists today. Under the MMFLA, because of the rigorous testing required of finished products, it will be possible (in fact, likely) for medical patients to be able to purchase product that is identifiable and consistent in quality and strength. Therefore, there will be significant opportunities for licensed growers, processing centers, and provisioning centers to each establish their own branding trademark rights. Medical patients may quickly develop brand loyalty once they start to identify quality products provided by the growers and provisioning centers, and sold by their favorite provisioning center.
This is nothing new in the business world. However, many aspiring marijuana entrepreneurs recognize that this current transition we are witnessing presents significant business opportunities to develop valuable brand names. The development is reflected by the significant number of domain names and trademark applications that have been filed over the last several months for marijuana-related names.
However, marijuana is still illegal for any purpose under federal law. And most trademark rights in the United States fall under federal law, which creates a strain between the federal and state laws.
Trademark Rights under Federal Law
The U.S. Patent and Trademark Office has taken a hard line approach toward trademark applications that are related to cannabis in almost any way.
-If the trademark itself includes any words or graphics that may be offensive as a drug reference, then the trademark application may be rejected on the basis that it is immoral, deceptive, or scandalous.
-If the trademark itself is inoffensive, but the trademark is used in connection with the sale of marijuana, then the trademark application will be rejected because the goods sold under the mark are unlawful under the Controlled Substances Act (CSA). For example, this happened in July 2016 with a trademark applicant seeking federal registration for the mark “HERBAL ACCESS” in connection with “retail store services featuring herbs.”
-The trademark application can even be rejected if the trademark is used in connection with cannabis processing equipment on the basis that the processing equipment is considered “paraphernalia” under the CSA. This occurred in November 2016 for the trademark “ULTRA TRIMMER” used in connection with agricultural machines for trimming leaves, plants, flowers and buds.
Therefore, the best approach with obtaining any kind of federal trademark protection at this time may be to use the trademark in connection with ancillary goods or services that are wholly-unrelated to cannabis, and to seek federal registration for the trademark in connection with those goods. This will allow the trademark owner to establish at least some degree of rights in the trademark and to expand use of the trademark to cannabis-related goods once federal registration is available.
In our next blog, we will discuss the different possibilities for trademark protection under state law.