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Trademarks and Cannabis
July 28, 2018
The state of trademark law and cannabis brands is still in a great deal of flux. However, there are some general guidelines. There is no federal registration available for cannabis marks since many of the underlying goods and services are illegal at the federal level and violate the Controlled Substances Act, but California and some other states now accept trademark applications for cannabis brands. Most practitioners claim this is a big deal, and it is to some extent, but not for the reasons many of these lawyers imply. In addition, most articles and presentations on cannabis and trademark law focus on the mechanics of the state registration process, the evolving position of the United States Patent and Trademark Office on the matter, and the specifics of various goods and services for cannabis and cannabis-related products. My goal in this blog article is to look at this from a more strategic perspective.
In general, having a state trademark registration provides essentially no rights beyond common law trademark rights except to the extent it serves as a public record that the registrant claims trademark rights in the brand as of a certain date, thereby establishing claimed priority for purposes of future infringement actions. This makes the trademark claim readily available and easy to find in clearance searches with willful infringement repercussions and the possibility of obtaining monetary damages if you prevail in a lawsuit. It also enables the registrant to sue under California’s trademark law, Business and Professions Code Section 14200, et. seq. However, such registrant or even a non-registrant could sue for the same things under state common law as well.
In any event, in an industry as wild west as cannabis still is, this is where the real value in having a state trademark registration come into play. Having a state trademark registration is not valuable in and of itself because it grants the registrant property rights which many practitioners claim or imply, usually not intentionally but because they don't fully understand trademark law, thus misleading the client. It doesn't. The purpose of trademark law differs from other areas of intellectual property law. For example, a copyright or patent provides its owner with a property right in that intangible asset. Trademark law, on the other hand, is designed to prevent consumer confusion among brands, and thus trademark law is a branch of unfair competition law and trademark infringement is more akin to a tort rather than violation of a property right. Given this, the main value of a state trademark registration for a cannabis brand is that it serves as valuable public record of priority and claim to rights that is not otherwise available at the federal level or anywhere else in an environment where legalities are still developing and there is still lots of uncertainty, plus it smooths the way to a lawsuit in state court. In other words, it is at this time the only truly reliable indicator and evidence of priority and a claim to rights in the cannabis brand. This becomes critically important when the trademark owner seeks to police its mark and enforce its trademark rights against subsequent users of confusingly similar cannabis brands.