The interior dome of California’s capitol building in Sacramento.
The California Senate recently amended Assembly Bill 64, an omnibus bill regarding medical and recreational marijuana.
Federal trademark registration for cannabis businesses appears unlikely for the foreseeable future. The California cannabis industry and intellectual property lawyers are anticipating a trademark filing frenzy on Jan. 1, 2018, when the California Secretary of State is scheduled to begin accepting trademark applications for cannabis goods and services.
Currently, the California Secretary of State will only register marks that are “substantially consistent with the federal system of trademark registration and protection under the Trademark Act of 1946 (15 U.S.C. §1051 et seq.) as amended. To that end, the construction given the federal act should be examined as non-binding authority for interpreting and construing this chapter.” Cal. Bus. & Prof. Code §14272.
The United States Patent and Trademark Office (USPTO) will only register trademarks relating to commerce “which may lawfully be regulated by Congress.” 15 U.S.C. §1127, and specifically the USPTO requires that “use of a mark in commerce must be lawful use to be the basis for federal registration of the mark.” Trademark Manual of Examining Procedure §907
Packaging from hmbldt, a cannabis business in Humboldt County, California.
AB 64 Untethers California from the USPTO Limitations
The Legislative Analyst’s Digest for AB 64 identifies the conflict between California and Federal law relating to marijuana’s legality and clarifies AB 64’s intended effect on marijuana trademarks:
“(6) Existing law, the Model State Trademark Law, provides for the registration of trademarks and service marks with the Secretary of State and requires the classification of goods and services for those purposes to conform to the classifications adopted by the United States Patent and Trademark Office.
“This bill, for purposes of marks for which a certificate of registration is issued on or after January 1, 2018, would, notwithstanding those provisions, authorize the use of specified classifications for marks related to cannabis, including medicinal cannabis goods and services that are lawfully in commerce under state law in the State of California.” (Emphasis added).
Specifically, Section 2(a) of AB 64 adds Section 14235.5 to the Business and Professions Code, which will establish two new cannabis trademark and service mark classifications:
– Classification “500 for goods that cannabis or cannabis products, including medicinal cannabis or medicinal cannabis products;” and
– Classification “501 for services related to cannabis or cannabis products, including medicinal cannabis or medicinal cannabis products.”
Various strains of cannabis line the shelves of Natural Cannabis Company stores in California.
Countdown to Jan. 1, 2018
In plain English, on Jan. 1, 2018, cannabis businesses will finally be able to register trademarks and service marks for cannabis goods and services, including trademarks for specific cannabis strains, assuming the proposed marks satisfy the other registration requirements (i.e. distinctiveness, lack of likelihood of confusion with existing registered marks, etc.)
Given that California is the most populous state, that the California cannabis market is projected to reach $6.5 billion by 2020, and that it is currently impossible to obtain a nationwide trademark for cannabis products, the California Secretary of State should anticipate receiving a tsunami of cannabis related trademark applications on Jan. 2, 2018 (Jan. 1 is an official state holiday).
Unlike the USPTO, which does not require an applicant to have used a mark in order to file an application (though proof of use is eventually needed for registration), California requires proof of actual use in commerce to file and register a trademark. Cal. Bus. & Prof. Code 14202(h). While existing cannabis trademarks already used in California may already have common law trademark protection, registration with the Secretary of State would confer statewide rights and additional remedies. Therefore, smart cannabusinesses should begin finding and using marks that will ultimately qualify for trademark registration well in advance of the January registration date.
* A Californian cannabusiness would have zero chance of obtaining an Acapulco Gold trademark because it would be geographically misleading and because the strain’s name is already widely used.
Joshua Cohen is a partner with Oakland, California-based Wendel Rosen Black & Dean LLP. He chairs the firm’s Intellectual Property Litigation Group. He can be reached at jcohen@wendel.com.
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