By Christopher McHattie, Esq.

Cannabis, a.k.a. marijuana, hemp, hashish, pot, weed, grass, herb, ganja, mary jane, …with so many names to choose from how do you make your mark in an industry that’s exploding around you – creatively, now and forever.

The list of accepted and slang terms for cannabis are as endless as its forms and uses. When first discovered in the western hemisphere, cannabis seeds were used for animal feed, its fibers for rope and its oils for health. Since its introduction to North America in the 1500s, its usage has grown to treat many medical, nutritional, health and wellness issues and most popularly, for recreational purposes. Today, like it or not, the use of marijuana is common place, and discretely accepted.

However, it is illegal by federal law, and an illegal controlled substance in 29 states. Notwithstanding that status, and fueled by pop culture and our current leaders being children of the 1960’s and 70’s, a modern day prohibition is unfolding. 23 states have rebelled against and ignored federal law and are now regulating the manufacture, distribution, marketing, sale and use of cannabis for medicinal, and in some cases, recreational purposes. History suggests the march to legalization is not likely to stop there. Remember, after a brief hiatus in the 1930’s during prohibition, beer, wine and spirits became legal again and are now a $400 billion dollar a year industry. Remarkably, notwithstanding federal illegality, marijuana is a thriving industry now valued at $2.7 billion and expected to grow 32% per year for the foreseeable future, with anticipated explosive growth at federal legalization.

So slowly slowly the marijuana industry is coming out of the shadows and the marketplace participants positioning themselves for the inevitable economic explosion. Participants everywhere are developing their goods and services, business models and ideas and uses in anticipation of the inevitable – and trying to devise plans to protect those goods and services against the coming onslaught.

But unlike other fledgling industries, the marijuana industry is impeded by the odd quirk of federal illegality. For marijuana industry participants this has resulted in what is in essence an absolute bar to federal registration of marijuana brands because marijuana is a controlled dangerous substance. Specifically, the USPTO Trademark Manual of Examining Procedure (TMEP) §907, provides: “[u]se of a mark in commerce must be lawful use to be the basis for federal registration of the mark. . . . Generally, the USPTO presumes that an applicant’s use of the mark in commerce is lawful and does not inquire whether such use is lawful unless the record or other evidence shows a clear violation of law, such as the sale or transportation of a controlled substance.” This TMEP section even makes it clear that “[r]egardless of state law, the federal law provides no exception to the above-referenced provisions for marijuana for ‘medical use.’” Gonzales v. Raich, 545 U.S. 1, 27, 29 (2005) and United States v. Oakland Cannabis Buyers’ Coop., 532 U.S. 483, 491 (2001). Therefore, under TMEP §907, U.S. trademark applications, whether based on use in commerce or an “intent to use” that cover the sale or transportation of marijuana will be refused registration because use of the mark is not lawful. Similarly, a U.S. application based upon foreign priority (a §44(d) priority claim) will also be refused.

Federal patent law, however, does not contain the same prohibition against illegal or “immoral” material. Theoretically, an inventor could get a patent issued for an illegal product. To that end, we can expect to see a wave of patent applications as soon as the major pharmaceutical and “agri-business” participants turn their attention to this industry and bring their particular breed of innovation to bear. We also believe that the likes of Monsanto will turn their attention to marijuana, as they have done with other “crops,” and we expect plant patents to be issued to marijuana “varietals” and enhancements. Plant patents are governed by 35 U.S.C. 161. These patents are granted to those that have invented or discovered, and asexually reproduced, a distinct and new variety of plant. A plant patent is good for 20 years from the date of filing the application. In fact a search of the Patent Office at writing discloses 1993 patents and patent applications including the term: “Cannabinoids,” 2293 patents and patent applications including the term: “Cannabis,” and 1902 containing the term “Marijuana.” There is hope there.

Turning back to trademarks however as the much more likely and common avenue of protection, while the impediments are high, they are not insurmountable. In fact, the competition is fierce to develop winning trademark strategies because the stakes are high. This industry is growing, changing and unfolding on a daily basis. Your brand needs to be protected, and while many conclude that that can only be done on a state level, we disagree.

There are effective “borderline” strategies. For example, get as close to the “controlled substance” border as possible with your description of goods and services, so that when legalized, your use and trademark registration will be “first in line” for registration in connection with what will then be legal, brands of marijuana and marijuana oriented services.

Let’s consider the hypothetical “Pike’s Peak” brand smoke shops and “Pike’s Peak” brand smoking supplies, including tobaccos, which has been registered as a federal trademark in connection with the foregoing goods and services. Assuming Pike’s Peak brand, upon legalization and/or imminent legalization of marijuana, files an application to register its pre-existing mark in connection with its expanded offering of goods and services, “Pike’s Peak” brand smoke shops and marijuana dispensaries, and “Pike’s Peak” brand smoking supplies, including tobaccos and marijuanas, it will be next to impossible for anyone else to register that mark or any other mark likely to cause confusion with “Pike’s Peak” brand smoking supplies, including tobaccos and marijuanas because of the prior and senior non-marijuana registration for traditional smoke shops.

To that same end, and part and parcel to that strategy, “Pike’s Peak” should immediately file trademark applications directed to “Pike’s Peak” brand smoking supplies, including tobaccos and marijuanas in all states where it is able to. In fact a search of the Trademark Office at writing discloses 60 trademark registrations and applications including the term: “Cannabinoids,” 794 trademark registrations and applications including the term: “Cannabis,” and 761 trademark registrations and applications containing the term “Marijuana.” There is not only hope there, as our client Dr. David Cunic has described it, there’s going to be “Grass Rush.” Combining those two strategies, it will basically impossible for any would be “marijuana” competitor to overcome that impressive array of interlocking strategies.

Moreover, there are other strategies as well for those with enough foresight and energy to undertake them. For example, we’re certain that with a steady and thoughtful effort, even actual marijuana varietals, think Panama RedTM, are protectable. We look forward to helping this industry “grow” and protect itself.