US federal trademark restrictions for cannabis are a source of frustration for in-house cannabis lawyers, who want their brands to have the same protection as those in any other industry.
Reggie Gaudino, a consultant for cannabis testing and analytics firm Steep Hill Labs, says that the company has sought federal trademark protection but was not always successful.
“As a testing lab, there’s not a lot that we can go after. [The prohibition] put a damper on our trademark strategy,” he says.
One of Steep Hill’s products, GenKit, allows users to identify male seedlings in plants. The product works for both cannabis and hemp, but because of the trademark restrictions, Steep Hill only registered the product for hemp.
“We had to give up part of our domain because otherwise we would not have been able to register the trademark,” Gaudino says.
In other cases, the company was rejected for federal trademark protection altogether. According to Gaudino, it was not able to get a trademark for ‘Steep Hill’ or for ‘Strain Fingerprint,’ another one of its products.
Strain Fingerprint “shows the average concentrations of 12 of the most relevant cannabinoids and terpenoids found in cannabis strains,” according to Steep Hill’s website. The USPTO rejected the trademark, saying it was descriptive, but Gaudino argues that the name was not.
“If you look at the definitions of ‘strain’ and ‘fingerprint’ and you put them together, it becomes an oxymoron. A fingerprint is usually something that identifies a unique individual. A strain is typically a population that is limited by its genetics. But in that population you’re going to have genetic diversity. When you put genetic diversity with unique identification together, they don’t give you a reasonable prediction.”
Gaudino believes that the USPTO’s decision that the mark was descriptive was merely an excuse for rejecting it.
“They used that as a policy position to not come out and say, ‘you’re touching cannabis, we’re not going to give you this trademark,’” he argues.
Room for manoeuvre
Lawyers note that when talking about restrictions on federal trademarks, it is important to distinguish what exactly the law prohibits.
“Cannabis companies are not prohibited from submitting an application to the USPTO, but they have to apply in alternative classes while cannabis is listed on the Controlled Substance Act (CSA),” Emily Tupy, senior counsel at Cresco Labs, a Chicago-based cannabis company, says.
Companies can’t be granted trademarks for illegal activities, and under the CSA cannabis is illegal federally. Still, companies can and do seek protection for other products and services that they offer.
“My company has sought out federal trademarks in classes that we can,” adds Megan Rimovsky, director of IP at Illinois-based Cannabistry Labs, a scientific R&D company.
Kelly Archer, general counsel at Native Roots, a cannabis dispensary in Colorado, says that registering federally for non-cannabis products can be an effective strategy.
“We do have a federal registration on apparel, so it’s been successful for us, and we did not encounter any pushback, as far as I’m aware. It was a fairly smooth process.”
In addition to registering a trademark for other goods, lawyers say that registering to protect a website that provides information on cannabis can be an option for companies.
“I think one of the best strategies is to try to obtain federal registration on goods and services without committing fraud,” Rimovsky says. She emphasises that it’s important for companies to actually offer the services or goods they are seeking protection for – otherwise they would be committing fraud.
Tupy says that the restrictions can be frustrating.
“We want to establish and protect our brands on a national scale. We want the same protection like any other consumer packaged goods brand. It is a limitation when you cannot apply directly in your industry’s classification.”
Limits of state protection
Companies that cannot or do not seek federal protection for their brands or products have alternatives.
“While cannabis companies may not be seeking protection on the federal level, they are seeking trademark protection in the respective states in which they operate,” Tupy says
State trademarks, or those that grant a company protection within a particular state, allow companies to seek protection for cannabis. For example, a company that operates in California might seek a trademark in that state. Since this protection only applies on a state level, companies have limited options in cases when a would-be trademark infringer operates in another state.
“Our standard cannabis company that only uses common law and state law protection has an uphill battle. If they’re not operating in that geographical area, they don’t have a leg to stand on. They just don’t have rights there,” Rimovsky says.
Archer agrees.
“You could be in New York and Michigan and if someone in California decides to create a cannabis company with the same name, there’s nothing you can do about it,” she says.
Archer adds that businesses that choose to register for state trademarks must prove that they sell their services or products in each state that they register in. It is illegal to transport cannabis across state lines, so cannabis companies are further limited in their ability to sell products to customers in other states.
“You have to actually operate in the state or through a licence agreement with a local operator,” Archer says. “All that can be quite capital and time intensive.”
Speaking different languages
While cannabis companies are limited in their ability to seek federal trademarks, these restrictions do not apply to patents and copyright.
Lawyers say that if a company has a design-heavy logo, while copyright won’t protect the words alone, the company can register copyright protection on the logo.
Archer adds that the ability to seek such protection has been helpful for Native Roots.
“We have copyrighted artwork that we use as part of our brand. We’ve been fortunate to have that registration and been able to prohibit other companies from using our artwork in other states.”
Gaudino laments the fact that trademarks lag behind patents in providing IP protection.
“Ironically, it’s not illegal to get a patent on cannabis. We can patent it, but we can’t trademark it, which makes no sense. It would be great if the patent and trademark system were speaking the same language.”
