Last Thursday, my colleagues Vince Sliwoski, Mike Atkins, and John Mansfield and I put on a webinar addressing the unique intellectual property issues faced by companies in the cannabis industry. If you missed the live broadcast, it’s available here. We received many great questions during the presentation, but an hour and fifteen minutes simply wasn’t enough time to answer all of them. So this post will address some of the questions that were asked, but not answered, during the webinar.
What is the difference between a trade name and a trademark?
A trade name is equivalent to a “doing business as” name, or a fictitious business name. It is an assumed name under which a company does business, and it typically registered at the local and/or state level. A trademark, on the other hand, can be registered at either the federal or state level and is used to protect your brand name. A trademark is a word, phrase, symbol, and/or design that identifies and distinguishes the source of the goods of one party from those of others. Owning a registered trademark gives the owner certain rights, including the right to prevent others from using confusingly similar marks on the same or similar goods or services. A trade name, even if registered, does not bestow any of these rights on the trade name owner, although use of a trade name may generate common law trademark rights.
Aren’t all federal trademarks of cannabis products unenforceable because sales of cannabis in interstate commerce are prohibited?
Yes. One of the requirements for federal trademark registration is lawful use in interstate commerce. Cannabis is a Schedule I drug pursuant to the Controlled Substances Act.
Can you obtain trademark protection for ancillary, information services related to a cannabis industry brand? What if that brand is identical to one used on cannabis products?
Yes. So long as the goods or services for which you intend to register your mark are lawful pursuant to federal law (i.e. they do not violate the Controlled Substances Act), you are eligible for federal trademark protection.
Does TM protection require use, or is prospective use sufficient?
Federal trademark registrations may be obtained through either use, or an intent-to-use. Note that an intent-to-use trademark application requires a bona fide intent to use the mark lawfully in commerce at the time of filing.
How do you report someone infringing on your trademark or intellectual property?
There is no system for “reporting” infringement. It is the responsibility of the trademark owner to enforce their own rights, which is typically done through cease and desist letters and, in more extreme cases, through litigation.
Can a company trademark a name, phrase or slogan that consists of common industry words (i.e. “Natural Grown Cannabis”)?
Generally, no. In the example above, all of the words are descriptive of the goods that are likely being sold – trademark protection is not granted to marks that are “merely descriptive.” Generic and descriptive terms should be avoided when choosing a brand that is eligible for trademark protection.
Regardless of a company’s inability to currently obtain federal trademark protection, once cannabis is federally legal, will that company be able to assert priority based on prior use, and therefore prevent all others from using their mark?
Possibly, but this is a complicated question. First, common law rights are often geographically limited to the area in which the mark has been used. Given that cannabis is currently regulated state-by-state, most brands are used only in certain states. Furthermore, trademark protection requires lawful use in commerce – it is unclear how the USPTO and/or federal courts would view common law trademark use that was not lawful under then-existing federal law.
If a brand successfully secures a trademark in one cannabis-legal state, can they also secure trademarks in other cannabis-legal states, even if they’re not currently selling or operating in those other states?
No. Nearly all states require lawful use in commerce in that state in order to secure state trademark rights.
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These questions are only a handful of those we received during the webinar, and we intend to address additional questions related to copyright, patent and trade secrets in the coming weeks. Stay tuned!