Federal trademark registration requirements bar cannabis from trademark protection because it does not fulfill the requirement to be used in ‘lawful commerce’ at an intrastate level. That decks US industry and leaves us behind the rest of the world.

A trademark is a word, name, symbol or device, or other designation, or a combination of such designations, that is distinctive of a person's goods or services and that is used in a manner that identifies those goods or services and distinguishes them from the goods or services of others. 162A service mark is a trademark that is used in connection with services. 163

Trademark law is governed by the Lanham Act, codified at 15 U.S.C. § 1051. It states that a "trademark includes any work, name, symbol, or device, or any combination thereof: (1) used by a person, or (2) which a person has a bona fide intention to use in commerce and applies to register on the principal register established by this chapter, to identify and distinguish his or her goods from those manufactures or sold by others and to indicate a source of the goods, even if that source is unknown." 164 Thus, under the Lanham Act, a trademark must be: (1) used in commerce; (2) registered with the USPTO to gain federal protection; and (3) must be distinctive. 165The Lanham Act also states that the purpose of trademarks are to serve as source identifier and allow people to protect their marks, whether the mark is already in use or is intended to be used in a market. 166Thus, trademarks are used to distinguish products from goods manufactured or sold by others and to indicate their source, which can also indicate quality. 167Additionally, trademark protection can extend to slogans as long as it immediately conjures up an association with the [*182] trademark owner and the affiliated product. 168 For example, the slogan "just do it" immediately conjures up an association with Nike and sports or sports products, which has allowed Nike to obtain trademark protection for its slogan. 169

B. Current State

Currently, federal protection is not available for cannabis-related trademarks. 170 Although the USPTO, which also regulates patents, allows for all types of cannabis patents, cannabis goods and services are still prohibited from receiving U.S. trademark registration. 171 The USPTO will not issue registration for marks covering goods or services that violate federal law, even if such goods or services are legal at the state level, such as cannabis. 172Thus, because cannabis has been deemed illegal by the federal government, categorized as a Schedule I drug under the CSA, cannabis related goods or services are barred from federal trademark registration. 173Overall, the USTPO has failed to be consistent in the way it treats cannabis businesses seeking intellectual property protection. How can it be that the same agency that has been granting cannabis patents since 1942, even granting some to the United States government, refuses to register marks for cannabis related businesses?

The answer comes down to a trademark specific requirement. 174 To obtain federal registration for a mark, the mark must be used in commerce and that commerce must be lawful under federal law. 175Trademark law prohibits the registration of products [*183] that cannot lawfully be sold across state lines in the United States. 176While many individual states have legalized the use of cannabis, whether for recreational or medicinal purposes, this is not enough to satisfy the use in commerce requirement, since such use is still illegal under federal law. 177In fact, the CSA explicitly makes it unlawful to sell, offer for sale, or use any facility of interstate commerce to transport drug paraphernalia. 178Thus, while the CSA does not interfere with the USPTO's ability to grant cannabis related patents, since lawful use in commerce is not a patent requirement, it is the sticking point for why cannabis-related marks cannot be registered. 179

Interestingly, the ban on cannabis trademarks, due to its inability to be used in interstate commerce, is not in the statute. 180Rather, it is an administrative and judicial interpretation of the statute. 181Thus, it is possible that even if Congress never deschedules marijuana, the USPTO and courts could acknowledge and grapple with the conflict laws to acknowledge that legal state activity, that happens to be illegal under federal law, is in fact commerce for the purposes of the Lanham Act. 182

This leaves cannabis companies few options when it comes to protecting their brand. The most commonly utilized alternative is state trademark registration. 183 The clear drawback here is that the mark will only be protected in that state, and thus not subject to the widespread coverage offered by federal protection. 184However, it is an effective means of excluding local competitors from using the mark and overall is better than nothing. 185State registration is available in all states that allow the recreational use of marijuana. 186Only some states that have legalized solely medicinal use allow for cannabis-related marks to be registered. 187

However, the passage of the Agricultural Improvement Act of 2018, also known as the 2018 Farm Bill, created an opening for cannabis-related marks. 188Specifically, [*184] hemp-related federal trademark registrations are now allowed as a matter of law. 189The Farm Bill legalized the production and marketing of hemp, which is defined as "the plant Cannabis sativa L. and any part of that plant, including seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids. . . with a THC concentration of not more than 0.3 percent on a dry weight basis." 190Thus, hemp, which is a cannabis cultivar lacking the psychoactive components found in recreational or medicinal marijuana, was removed as a controlled substance, under the CSA, because the Farm Bill expressly amended the CSA to exclude hemp from the definition of "marihuana". 191This does not mean that hemp is simply legal now across the board, hemp products will still be restricted and overseen by federal agencies such as the U.S. Food and Drug Administration (FDA). 192

In response, the USPTO has issued an examination guide clarifying the procedure for examining applications cannabis related marks in light of the 2018 Farm Bill. 193 The guide does not change any trademark requirements, but rather explains that hemp-related marks are no longer banned and sets forth the procedures for obtaining such marks. 194

The passage of the 2018 Farm Bill has been a monumental step towards resolving the USPTO's inconsistencies in how it treats cannabis related patents and trademarks. While allowing trademarks for hemp products is an affirmative step toward legalization, it still leaves uncertainties for other cannabis goods and services. For example, CBD, a non-psychoactive derivative THC, is still unlawful even if derived from hemp and thus is ineligible for trademark registration. 195Thus, the only solution to fully repair the USPTO's inconsistency is to have marijuana de-scheduled from the CSA, so that it may be lawfully used in commerce and thus be eligible for federal trademark protections.

[*185] C. Pending Legislation

Although federal trademark protection is currently unavailable for cannabis related marks, this may change if the Marijuana Opportunity Reinvestment and Expungement Act of 2019 is passed (known as the "MORE Act"). 196The MORE Act was introduced by Senator Kamala Harris and if passed would federally de-schedule cannabis, expunge the records of those with prior marijuana convictions and impose a 5% tax on sales, which would be reinvested in communities most impacted by the war on drugs. 197By removing marijuana from the CSA, this bill would effectively allow cannabis companies to finally receive federal trademark protection for their goods and services. On November 20, 2019, the House Judiciary Committee passed the bill with a 228-164 vote. 198However, even with this strong and historic start, the MORE Act has significant hurdles ahead. 199While the MORE Act has passed the house, which is currently controlled by Democrats, it is unlikely to pass or even be considered by the Republican controlled senate. 200

Even if the MORE Act passes the House, which is currently controlled by Democrats, it is unlikely to pass the Republican controlled Senate. 201

V. PLANT VARIETY PROTECTION ACT (PVPA)

A. Background

The Plant Variety Protection Act (PVPA) provides intellectual property protection to breeders of new, distinct, uniform, and stable asexually produced or tuber propagated plant varieties (other than fungi or bacteria). 202The PVPA is administered by the Plant Variety Protection Office (PVPO) within the Department of Agriculture. 203Although the PVPA is not administered by the USPTO, it offers [*186] patent-like protection to novel plant varieties. 204To qualify for protection under the PVPA, in addition to a plant variety being able to be sexually reproduced, tuber propagated, or asexually reproduced, the plant variety must satisfy four requirements, it must be: (1) new; 205(2) distinct; 206(3) uniform; 207and (4) stable. 208The applicant must also provide a seed deposit, which is stored and become available to the public after the term of PVPA protection expires. 209If the plant variety meets these requirements, the PVPO will issue a certificate to the breeder, granting the right to exclude others from "selling the variety, or offering it for sale, or reproducing it, or importing it, or exporting it, or using it in producing a hybrid or different variety therefrom." 210This certificate is recognized worldwide and allows breeders to obtain protection in other countries faster. 211In most cases the term of this protection is 20 years from the date of issuance. 212

The PVPA provides a strong alternative to patent protection, with fewer detailed requirements. 213Even though PVPA protection lasts for a period of 20 years, like patent protection, PVPA protection is generally longer because it begins on the date of issuance not on the date of filing. 214The trade-off is that the protections are not as extensive as those granted by a patent. 215However, PVPA certificates can be used in [*187] tandem with both utility and plant patents to create a robust scope of protection. 216For example, combining utility patent protections, plant patent protections, and PVPA protections may give the owner or breeder robust, comprehensive, and versatile protection for plant inventions. 217A utility patent could protect the methods of breeding a plant and a valuable gene in that plant. 218A plant patent could be used to protect a specific variety of plants produced using the patented method. 219A PVPA certificate could then be used to protect later-developed hybrids, which contain the patent gene, or specific tuber propagated plant created using the patented method, which would not be covered by a plant patent. 220Alternatively, a breeder may choose to forego patent protection, due to the high costs, and pursue only a PVPA certificate, which is less expensive. 221

B. Relevance to Cannabis

Currently, PVPA protection is effectively unavailable to breeders and inventors in the cannabis industry because cannabis (and marijuana plants) remain federally illegal under the CSA. 222 A requirement to obtaining a PVPA certificate is a seed sample, which should include any parent plants needed to produce a hybrid. 223These deposited seeds are then made available to the public when the PVPA protection expires, 20 years after the date of issuance. 224However, for cannabis breeders and cultivators, depositing a seed would be admission of and proof of illegal cannabis cultivation. 225If a cannabis breeder were to submit a sample, then the breeder may face penalties under federal law. 226Since cannabis and marijuana plants are illegal, breeders are unlikely to hand over the illegal plant variety to the PVPO, a federal [*188] agency. 227Additionally, under federal law, cannabis cannot be made publicly available while still a schedule I drug under the CSA. 228Thus, PVPA protection is effectively unavailable to cannabis breeders and inventors. 229However, with the passage of the 2018 Farm Bill, not all hope is lost for inventors and breeders in the cannabis industry.

The 2018 Farm Bill removed hemp 230from the definition of marijuana under the CSA. 231It allows for the broad cultivation of hemp, the transfer of hemp-derived products across state lines, and does not impose restrictions on the sale, transport, or possession of hemp products. 232Thus, while cannabis companies are unable to acquire PVPA protection for marijuana plant varieties, they may now acquire protection for hemp varieties. 233

VI. CONCLUSION

Based on the exponential growth of the cannabis industry in other countries, it is clear that the American cannabis companies have fallen behind in the global cannabis market1. 234 If federal prohibition of marijuana continues, with cannabis remaining a Schedule I drug under the CSA, the U.S. could be forgoing revenues from billions of dollars' worth of exports. 235 The U.S. already has the foundation to create a robust and competitive cannabis industry through current federal intellectual property protections. However, this foundation is deeply flawed as it lacks uniformity in what protections are available for cannabis related intellectual property. 236

[*189] Currently, cannabis companies may acquire patent protection in the form of utility patents, plant patents, and design patents. 237While the process for obtaining utility and design patents remain unchanged, despite the invention being for an invention related to a federally illegal substance, patents for plants become more complex when a biological material sample needs to be provided. 238 Copyright protection also remains available for original cannabis related works, with there being no additional requirements or significant obstacles. 239 However, federal trademark protection is effectively unavailable for cannabis goods or services. 240 For a good or service to be eligible for trademark protection it must be able to be lawfully used in interstate commerce. 241

[Footnote 241 Begins]

15 U.S.C. § 1051(a) (stating that the owner of mark used in commerce may request registration as a trademark); 15 U.S.C. § 1051 (b) (stating that a person who has a "bona fide intention" to use a mark in commerce may request registration as a trademark); CreAgri, Inc. v. USANA Health Scis., Inc., 474 F.3d 626 (9th Cir. 2007) (interpreting the Lanham Act to mean that "use in commerce only creates trademark rights when the use is lawful").

[Footnote 241 Ends]

However, since cannabis remains a Schedule I drug under the CSA and thus illegal under federal law, it cannot lawfully be used in interstate commerce. Thus, cannabis goods and services are rendered ineligible for federal trademark protection. 242 This is a blaring inconsistency given that patent and copyright protection are both available on the federal level. Although the issues seem to be a constitutional issue, since Congress' power to regulate trademarks stems from the commerce clause, 243 the bar on trademarks could be resolved by de-scheduling or removing cannabis as a Schedule I drug. 244While this might seem like a radical action, it would better align federal law with the trend of progressive state laws legalizing cannabis. It would also allow the U.S. to enter the competitive international cannabis markets. 245Additionally, unifying federal law, especially federal intellectual property laws, on cannabis would clarify whether cannabis trade secrets are protectable under federal law and whether actions for trade secret misappropriation may be heard by federal courts. 246

It is time for the U.S. to decide how it will recognize and regulate cannabis. Current piecemeal regulations allowing hemp under federal law, but not marijuana, [*190] has not only created inconsistencies in federal intellectual property protections but has also sidelined American cannabis companies in a booming international cannabis market. For the U.S. to remain competitive in international markets and build a stronger domestic market, it is time for federal laws to take after the many progressive states that have legalized, taxed, and benefitted from legal cannabis markets.