Legalization increases trademark litigation---proven by the alcohol prohibition.

Further, the reclassification does not resolve the lack of availability of federal trademark registrations for state cannabis companies. Currently, federal trademark registrations are not available for state-cannabis companies due to the illegal status of cannabis at the federal level. As the rescheduling of cannabis from Schedule I to Schedule III has no impact on the federal legality of cannabis, state-cannabis companies still remain without access to federal trademark protection. However, this reclassification raises the stakes of potential trademark infringement in the future. Indeed, as cannabis becomes more prominent and regulation efforts on the local, state, and federal level head towards varying levels of legalization, history shows that trademark infringement lawsuits will grow increasingly common.

Prohibition provides the prime example. Once alcohol was de-prohibited, alcohol companies were able to register for nationwide trademark rights. This led to an influx of trademark litigation based on pre-existing trademarked, non-alcohol companies that alleged they had priority to the trademarked name. For example, in James Burrough Ltd. v. Sign of Beefeater, Inc., 540 F.2d 266 (7th Cir. 1976), Burrough was the owner of three trademark registrations for gin, each alleging first use on November 9, 1909. The registrations were for the term “Beefeater.” A restaurant operation in Detroit, Michigan commenced its operation with the notation “Sign of the Beefeater” for their restaurant. The Seventh Circuit concluded that the federal mark for “Beefeater,” had priority based on its first use in 1909. While cannabis still remains illegal at the federal level, the reclassification signals a growing recognition of cannabis companies and the future potential of increased trademark litigation.