Cannabis trademarks elusive until legal issues are sorted out
Trademark and Patent Challenges Loom for Minnesota Cannabis Businesses as Legalization Approaches.
When the sale of recreational cannabis becomes legal in Minnesota next year, retailers such as dispensaries will likely be working to get licenses for their stores, as a comprehensive licensing system will still be under development.
They aren’t the only ones who might be scrambling. Cannabis manufacturers have a variety of issues related to trademarks and patents that they’ll have to consider as the new year draws near.
One involves the very nature of cannabis laws. The federal Controlled Substances Act and similar laws put a strict limit on getting federal trademark protection for cannabis, according to Tim Sitzmann, a shareholder with Winthrop & Weinstine in Minneapolis.
“The interplay between state and federal law is one of the biggest concerns when it comes to trademarks,” said Sitzmann. “A federal trademark registration is usually the best way to have protection for your trademark, but cannabis is still illegal under federal law. You can’t get a federal registration for a product that’s unlawful. There are also federal laws covering products that might not be illegal but are still derived from hemp.
“The state trademark registration is the best way since the federal option isn’t available.”
At the state level, though, there’s also the process of establishing a trademark classification code for a product that isn’t yet legal to sell, according to Aaron Pelley, a partner in the Seattle office of Harris Sliwoski.
“Legalization happens, but the secretary of state hasn’t quite caught up with the issue when it comes to state trademarks,” said Pelley, who was in St. Paul recently to present on the topic at the Cannacon convention.
Since the United States Patent and Trademark Office doesn’t allow manufacturers to protect their brand with a federal trademark, Pelley agrees that manufacturers should apply for trademark protection at the state level before anything else. For one thing, a Minnesota application is likely to be processed by the state within 60 days, as opposed to at least six months with the USPTO.
“There’s really no other protection to get,” he said. “It’s a simpler process — $70 application fee in Minnesota, and a one-page application. It’s simple and straightforward compared to going through the USPTO, which is much more expensive and time-consuming. And you at least have the presumption of ownership of your state trademark.”
Minnesota uses the same trademark classification numbers for goods and services (1 through 45) as the USPTO does.
“What ends up happening — and hopefully Minneapolis’s secretary of state will get this together before people start putting things out on the market — is that they add a classification at the state level,” said Pelley. “Sometimes they’ll add a broad classification and say it applies to all cannabis products, and sometimes they’ll break it up into smaller classifications.”
The issue is moot to an extent, according to Sitzmann, for the simple reason that you can’t get a product trademark until you’re in commerce.
“You can’t protect yourself until you’re in the marketplace,” he said. “But you have to show proof that you’ve sold something in the marketplace before you can get a trademark.
“At this point manufacturers are only able to have a registration that might cover something like a retail dispensary. You could get a THC beverage covered by the state trademark right now.”
One other option on the federal level, according to Pelley, is an intent-to-use application. In those cases, you can keep them and renew them for three years.
“If you’re of the belief that your cannabis is going to be legal in the next three years, and it’s worth paying a trademark attorney to protect your brand name,” he said. “This is a good strategy for multistate operators if they intend to use their applications for brands that use within that three-year period. It’s a gamble, because legalization isn’t certain in a lot of states.”
Another issue to consider is the name you want to use for your product, whether it’s one you plan to sell or one you plan to develop.
For instance, when a retailer submits a business application, it gets its trade name automatically.
“Even so, I tell people they might have an ‘ugly baby,’” said Pelley. “Don’t use generic or descriptive marks. Something like ‘Green Leaf Cannabis’ isn’t going to be as protectable as a unique name.”
If a retailer has its sights set on states beyond the one where it’s established, Pelley recommends doing a “knockout” search on the USPTO’s website to make sure the name isn’t already in commerce.
“You don’t want your store name to limit you to your geographic region,” he said.
And because some cannabis sellers are also planning on being in the business of developing their own varieties of the plant, there are some patent aspects to consider as well, according to Sitzmann.
“If you’ve got businesses that are developing new strains and you’re seeking patent protection on those, you want to be really careful that when you’re describing that varietal, you don’t use the trademark,” he said.
Sitzmann cited the example of Rollerblade, whose trademark name for inline skates became less valuable when the name began to be widely used generically.
“If you say your new plant is called Circus, that can become its generic name,” said Sitzmann. “Even if it’s just a designation, it can make it really hard to use that name as a trademark, and can even cause you to accidentally give up your trademark protection.”
