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Trademarks and Cannabis

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What is the best way to apply for trademark protection on cannabis products or services? This presentation reviews the current state of the law, discusses the particularities of state and federal applications, walks through the methods trademark attorneys and trademark owners are using to apply for protection, and reviews the ethical issues to be aware of in the process. This presentation was first offered by James Creedon, Creedon PLLC (www.creedonpllc.com) at the 2018 Intellectual Property Law Seminar and Midyear Meeting of the Intellectual Property Law Section of the Oklahoma Bar Association.

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Trademarks and Cannabis

  1. 1. JAMES CREEDON — CREEDON PLLC
  2. 2. “CANNABIS IS THE NEXT GOLD RUSH” “The largest group of [legal] cannabis buyers will be in North America, going from $9.2 billion in 2017 to $47.3 billion a decade later.” Thomas Pellechia, Forbes.com (March 1, 2018)
  3. 3. ANNUAL GROWTH PREDICTIONS ARE OVER 20% Image and data from Arcview Market Research in Executive Summary: The State of Legal Marijuana Markets (5th edition) REVISED PREDICTIONS INCREASE Current estimates of 2016 to 2017 growth rate average from 25% to 33%, with revised estimates of 2017 spending at $9.7 billion LEGALIZATION MATTERS As more states move to approve cannabis products, spending shifts into this sector and increases overall market revenue
  4. 4. GALLUP POLL: U.S. SUPPORT FOR LEGAL MARIJUANA Gallup Poll results as reported by Arcview Market Research in Executive Summary: The State of Legal Marijuana Markets (5th edition) SUPPORT DOUBLES SINCE 2000 Pew Research Center Polls from 2000 to 2018 show adult support nearly doubling from 31% to 61%. (Last cited Pew Research Center Poll conducted Oct. 25-30, 2017) MILLENNIAL SUPPORT HIGHER For those born 1981-97, support crested 70%. Gen X (1965-80) support is at 66%, and Boomers (1946-64) reached 56%. (Pew Research Center Poll, Oct. 2017)
  5. 5. LEGALIZATION ACROSS THE UNITED STATES Image and state status reporting provided by the National Cannabis Industry Association, with data reported and compiled by CannaRegs, Ltd., Arcview Market Research, and BDS Analytics ADULT USE BROAD MEDICAL LIMITED MEDICAL PROHIBITED
  6. 6. WHAT DOES CANNABIS MEAN? Understanding the basic terminology at the beginning will help to frame out our discussion of trademark issues in this field
  7. 7. MARIJUANA / MARIHUANA Generally differentiated from other forms of Cannabis by its higher THC content (greater than 0.3%) CANNABIDIOL (CBD) Non-intoxicant found in Cannabis (generally not under DEA/CSA enforcement as of May 22, 2018) THC = TETRAHYDROCANNABINOL Intoxicant in Cannabis regulated by the Controlled Substances Act and Drug Enforcement Administration HEMP Generally differentiated from other forms of Cannabis by its low THC content (0.3% or less by 2014 Farm Bill) CANNABIS TERMS
  8. 8. LEGAL REGIME TODAY With federal and state changes day-by-day, practitioners must pay attention to the current environment when considering trademark matters MARIJUANA IS PROHIBITED The Controlled Substances Act still applies, and AG Sessions rescinded the 2013 Cole Memo in January 2018 to lift soft restrictions on enforcement JUNe 2 2018 THC IS PROHIBITED The 2014 Farm Bill set the industrial hemp permissible level of THC at 0.3%, and content above that is prohibited overall CBD GENERALLY NOT PROHIBITED BY THE DEA/CSA On May 22, 2018, DEA clarified that products outside of CSA marijuana definition (i.e. seed oil and mature stalk extract) are not prohibited FDA EXERTS REGULATORY CONTROL OVER CBD FDA considers CBD to be a drug under substantial clinical investigation which was not marketed prior as a dietary supplement or conventional food
  9. 9. HOW DOES THIS ALL PLAY OUT? Every change in the federal approach to Cannabis generally will have a specific effect on the USPTO’s examination of trademark applications THE POINT: TRADEMARK S ®
  10. 10. BRIEF REVIEW ON FEDERAL TRADEMARKS INTENT TO USE Most states don’t permit, but exceptions include Washington, Wyoming, and Puerto Rico STATUTORY BARS Most states mirror the Lanham Act, but Colorado is a notable exception LAWFUL USE Most states use their own statutes to determine lawfulness REGISTRATION SYMBOLS No use of federal registration markers such as ® “USE IN COMMERCE” TRADEMARK APPLICATIONS • Applicant is currently using the mark is commerce to identify source of good or service • Claimed good or service is lawful under federal law and mark is used in commerce able to be regulated by Congress “INTENT TO USE” TRADEMARK APPLICATIONS • Applicant has a bona fide intent to use the mark in commerce to identify the source of a good or service • The intended good or service is lawful under federal law and mark will be used in commerce currently able to be regulated by Congress BRIEF REVIEW ON STATE TRADEMARKS
  11. 11. DOES THE APPLICANT ADVERTISE CANNABIS? Examiners are routinely reviewing websites and other public materials to cite in office actions DOES THE APPLICATION HAVE CANNABIS HINTS? Includes goods like devices for use, herbal products, hard candies – even entity names or domain names IS THE USE SUBJECT TO OTHER REGULATION? Recent refusals based on FDA guidance demonstrate the landscape continues to shift IS THE USE LAWFUL? Examiners look to internal guidance for updates, and sometimes seem to hold applications intentionally DOES THE APPLICATION HAVE CANNABIS WORDS? Consider less obvious examples such as MMJ, KUSH, HUMBOLDT, and variants like CANNA CANNABIS EXAMINATION
  12. 12. APPLICATION: KUSHIECAKES Imaginary Client KUSHIECAKES plans to bake and sell a four-layer brownie cake in Colorado, which contains CBD Oil for “psycho- soothing happiness.” Client intends to later open a bakery selling both cannabis and non-cannabis products, and also wants to start a website featuring non-cannabis cooking recipes.
  13. 13. THREE APPROACHE S
  14. 14. DIRECT ANY ISSUES HERE? IC 30: Baked goods and desserts containing CBD IC 35: Retail bakery shops selling cannabis- containing items IC 43: Providing a website featuring information in the field of recipes and cooking
  15. 15. DOES THE APPLICANT ADVERTISE CANNABIS? Examiners are routinely reviewing websites and other public materials to cite in office actions DOES THE APPLICATION HAVE CANNABIS HINTS? Includes goods like devices for use, herbal products, hard candies – even entity names or domain names IS THE USE SUBJECT TO OTHER REGULATION? Recent refusals based on FDA guidance demonstrate the landscape continues to shift IS THE USE LAWFUL? Examiners look to internal guidance for updates, and sometimes seem to hold applications intentionally DOES THE APPLICATION HAVE CANNABIS WORDS? Consider less obvious examples such as MMJ, KUSH, HUMBOLDT, and variants like CANNA CANNABIS EXAMINATION
  16. 16. DIRECT ANY ISSUES HERE? IC 30 will be refused at least under FDA regulatory authority (or not?) IC 35 will be refused under CSA IC 30: Baked goods and desserts containing CBD IC 35: Retail bakery shops selling cannabis- containing items IC 43: Providing a website featuring information in the field of recipes and cooking
  17. 17. INFORMATIONAL ANY ISSUES HERE? IC 16: Recipe books IC 35: Business consulting in the field of cannabis and CBD IC 43: Providing a website featuring information in the field of recipes and cooking with cannabis
  18. 18. DOES THE APPLICANT ADVERTISE CANNABIS? Examiners are routinely reviewing websites and other public materials to cite in office actions DOES THE APPLICATION HAVE CANNABIS HINTS? Includes goods like devices for use, herbal products, hard candies – even entity names or domain names IS THE USE SUBJECT TO OTHER REGULATION? Recent refusals based on FDA guidance demonstrate the landscape continues to shift IS THE USE LAWFUL? Examiners look to internal guidance for updates, and sometimes seem to hold applications intentionally DOES THE APPLICATION HAVE CANNABIS WORDS? Consider less obvious examples such as MMJ, KUSH, HUMBOLDT, and variants like CANNA CANNABIS EXAMINATION
  19. 19. INFORMATIONAL ANY ISSUES HERE? ”Informational” goods and services are routinely granted, although common office actions include request to affirm there is a gap between the good or service offered and any potential lawfulness issue IC 16: Recipe books IC 35: Business consulting in the field of cannabis and CBD IC 43: Providing a website featuring information in the field of recipes and cooking with cannabis
  20. 20. GENERAL ANY ISSUES HERE? IC 30: Baked goods and desserts IC 35: Retail bakery shops IC 43: Providing a website featuring information in the field of recipes and cooking
  21. 21. DOES THE APPLICANT ADVERTISE CANNABIS? Examiners are routinely reviewing websites and other public materials to cite in office actions DOES THE APPLICATION HAVE CANNABIS HINTS? Includes goods like devices for use, herbal products, hard candies – even entity names or domain names IS THE USE SUBJECT TO OTHER REGULATION? Recent refusals based on FDA guidance demonstrate the landscape continues to shift IS THE USE LAWFUL? Examiners look to internal guidance for updates, and sometimes seem to hold applications intentionally DOES THE APPLICATION HAVE CANNABIS WORDS? Consider less obvious examples such as MMJ, KUSH, HUMBOLDT, and variants like CANNA CANNABIS EXAMINATION
  22. 22. GENERAL ANY ISSUES HERE? Applicant may still face an office action to confirm lawfulness IC 30: Baked goods and desserts IC 35: Retail bakery shops IC 43: Providing a website featuring information in the field of recipes and cooking
  23. 23. MAYBE FOUR APPROACHE S
  24. 24. STATE FILING THIS IS BECOMING MORE COMMON IN STATES PERMITTING CANNABIS MARKS, SUCH AS CALIFORNIA, COLORADO, OREGON, AND WASHINGTON Likely cannot file until actual use in the state Still need to conduct trademark clearance Not a substitute for federal registration
  25. 25. CLIENT GUIDANCE: ETHICAL ISSUESA BRIEF REVIEW
  26. 26. ADVISE CLIENTS HOLISTICALLY Cannabis trademarks are fraught with potential ethical issues requiring proactive engagement PRE-APPLICATION Advise as to meaning of bona fide intent, and as to the proper role of trademark registration in the market APPLICATION Consider office action responses carefully and conduct the due diligence to be certain of accuracy LATER FILINGS Carefully review specimens and potential edits to 1(b) applications – especially regarding lawful use REGISTRATION MARKING Especially for the “General” approach, be certain that marking aligns properly with lawful use
  27. 27. FINAL ADVICE ON CANNABIS CLIENTS BE COMPREHENSIVE • STATE REGULATORY COMPLIANCE • FINANCE AND TAXATION • BUSINESS OPERATIONS
  28. 28. CANNABIS RESOURCE S WHERE TO LOOK National Cannabis Bar Association https://www.canbar.org Daily Update: Word on the Tree Newsletter https://wordonthetree.com Marijuana Moment https://www.marijuanamoment.net National Cannabis Industry Association https://thecannabisindustry.org DEA/CSA Updates https://www.deadiversion.usdoj.gov/schedules/marijuana/index.html FDA Updates https://www.fda.gov/NewsEvents/PublicHealthFocus/ucm421168.htm
  29. 29. VISIT CREEDON PLLCWWW.CREEDONPLLC.COM 2595 Dallas Parkway, Suite 420 Frisco, Texas 75034 972.850.6864 contact@creedonpllc.com
  30. 30. JAMES CREEDON — CREEDON PLLC

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