By Christopher R. McElwain
LGP associate Christopher McElwain’s paper High Stakes: Marijuana and the USPTO’s “[Lawful] Use” Registration Criterion (working draft available here) was recently selected by the International Trademark Association as the winner of the 2016 Ladas Memorial Award.
This paper takes a look at the tremendous surge in trademark applications related to the U.S. cannabis industry that began in 2009 and spiked significantly in 2014 and 2015. While these applications identify a range of goods and services, from sale of marijuana to cannabis business consultation, they are united by an incredibly low registration rate.
The principal reason for the denial of marijuana-related trademark applications is likely the USPTO’s “Lawful Use Rule.” Under Section 1(a)(1) of the Lanham Act, trademarks may be registered if they are “used in commerce.” However, the USPTO’s Trademark Trial and Appeal Board subsequently adopted an interpretation of the Lanham Act inferring that “used in commerce” means either “[lawfully] used in commerce” or “used in [lawful] commerce.”
Since 2009, the Lawful Use Rule has been consistently applied to refuse registration to any applicant whose goods or services appear to violate the federal Controlled Substances Act. In addition, any applicant whose services relate even tangentially to marijuana is likely to encounter increased barriers to registration.
The paper goes on to argue that the Lawful Use Rule is ill-conceived both as a matter of statutory interpretation and public policy. Furthermore, its roots in precedent do not go nearly as deep as is sometimes believed. While the Lawful Use Rule was endorsed by the Ninth Circuit Court of Appeals in 2007 in its Creagri v. USANA Health Sciencesdecision, it has otherwise not received significant scrutiny from Article III courts and the TTAB’s application of the rule could conceivably be overturned upon appeal to the Federal Circuit or a U.S. District Court.
Meanwhile, owners of cannabis-related trademarks do have other options to protect their rights, even if the protection afforded is less than ideal.
LaRiviere Grubman frequently counsels clients with respect to trademarks and other IP and business issues. If you have questions about protecting your brand, contact us at (831)-649-8800 or firstname.lastname@example.org.