On Marijuana-Related Trademarks

There have been quite a few pot-related trademark cases in the last year.

Back in June, the Trademark Trial and Appeal Board (TTAB) decided In re PharmaCann LLC, Serial Nos. 86520135 and 86520138 (June 16, 2016) (precedential), affirming the USPTO examining attorney’s refusal to register the marks “PHARMACANN” and “PHARMACANNIS” for “retail store services featuring medical marijuana” and “dispensing of pharmaceuticals featuring medical marijuana.” The basis for the refusal was that the claimed services are illegal under the Controlled Substances Act (CSA), and therefore PharmaCann couldn’t have a bona fide intent to lawfully use the marks in commerce.

Before diving into the case, let me start by saying that there are many trademark registrations and registration applications for services relating to marijuana:

2080, and these are just the ones for marijuana-related  goods and services  .

2080, and these are just the ones for marijuana-related goods and services.

And not all registration applications get refused: many marijuana-related services are for education, advocacy, and other activities not related to distribution. However, I think the PharmaCann case – and the TTAB cases preceding it – represents a common misunderstanding by the public about drug laws: that state legalization has any force against federal prohibition.

What Happened in PharmaCann?

PharmaCann applied to register the PHARMACANN and PHARMACANNIS marks, and the examining attorney refused to register both because the goods and services described activities prohibited by the CSA. The examining attorney further requested that PharmaCann amend and clarify its goods and services. Interestingly, PharmaCann revised the goods and services descriptions in both applications to say “Dispensaries selling medical marijuana in compliance with Illinois state law.” As you might expect, the examining attorney issued final refusals on the same grounds.

PharmaCann appealed the refusal to the TTAB. On appeal, the examining attorney repeated his argument: the CSA prohibits manufacturing, distributing, or dispensing controlled substances, including medical marijuana, and PharmaCann’s services include selling, distributing, and dispensing medical marijuana. Case closed.

PharmaCann argued that its intended use of the marks doesn’t per se violate the CSA for two reasons. First, it argued that the Department of Justice has refused to enforce the CSA against medical marijuana since 2009:

[PharmaCann] claims that “[o]n October 19, 2009, the United States Department of Justice announced that it no longer would prosecute caregivers for providing medical marijuana or individuals for using medical marijuana, so long as the ‘actions are in clear and unambiguous compliance with existing state laws providing for the medical use of marijuana,’” and that “[o]n August 29, 2013, the Department of Justice renewed and reiterated its stance on not enforcing the [CSA] against medical marijuana.”

Second, PharmaCann argued that Congress has agreed with the DOJ position. In the Consolidated and Further Continuing Appropriations Act of 2015 (as renewed in 2016 and 2017), Congress prohibited the DOJ from expending funds to prevent states that have legalized marijuana from implementing their state laws authorizing the use, distribution, possession, or cultivation of medical marijuana. In short, if Congress and the DOJ aren’t enforcing the CSA against medical marijuana, the TTAB should follow suit.

The TTAB rejected both arguments. Regarding the DOJ’s position, the DOJ’s August 29, 2013 memorandum was intended merely as guidance for enforcement, and explicitly noted that “neither the guidance herein nor any state or local law provides a defense to a violation of federal law . . . .” As for the Congressional argument, the TTAB noted that Appropriations Acts did not make medical marijuana legal under the CSA. Ultimately, PharmaCann loses.

The CSA (and the Supremacy Clause) is Still a Thing

If this decision and others like it have anything in common, it’s the message that the Controlled Substances Act is still here despite what the individual states do. While PharmaCann’s Appropriations Act argument was novel, it isn’t an uncommon sentiment: “I operate in a state where growing, distributing, and using medical marijuana is legal, so I should be able to conduct my medical marijuana business.” That isn’t how the law operates, though. We have two systems of law, state and federal, and under the Supremacy Clause (Art. VI, cl. 2), federal law takes precedent. The CSA trumps state legalization statutes.

What Does it Mean?

Does this mean you can’t ever register a trademark for marijuana related goods and services? No. Does it mean that you can’t ever register a trademark that references marijuana? No. This case simply reinforces the principle that marijuana retailers and dispensaries are still “illegal” uses for purposes of trademark registration regardless of whether the applicant uses the mark in states where marijuana distribution is “legal.”

Additionally, the USPTO has tunnel vision: it is only ever concerned with one question, whether a trademark may be registered. Even PharmaCann can still use the PHARMACANN and PHARMACANNIS trademarks, they simply won’t enjoy the protections that come with registration. Moreover, the USPTO doesn’t enforce drug laws, it doesn’t force businesses to shut down— it doesn’t even handle trademark infringement actions. However, as I mentioned in my post about Matal v. Tam, all trademark registration applications are public record, including applicant information. While the USPTO doesn’t enforce drug laws, the information is publicly available and relatively easy to find.

As always, if you have any trademark questions, don't hesitate to contact me!