Thirty U.S. states have legalized cannabis in some form, and Canada will likely become the first industrialized nation to legalize recreational use of cannabis this year. While the acceptance among the U.S. states is growing, the U.S. federal government is holding fast on its laws that characterize cannabis as an illegal controlled substance.
The Trademark Office has consistently held that to qualify for a federal registration the use of a mark in commerce must be lawful. Thus, for a mark to be eligible for federal registration, any goods or services for which the mark is used must not be illegal under federal law. In the context of an intent-to-use application, if the identified goods or services with which the mark is intended to be used are illegal under federal law, then the applicant cannot use its mark in lawful commerce and it is legally impossible for the applicant to have the requisite bona fide intent to use the mark.
Registration generally will not be refused based on unlawful use in commerce unless either: (1) a violation of federal law is indicated by the application or when a court or a federal agency responsible for overseeing activity in which the applicant is involved issues a finding of noncompliance under a relevant statute or regulation; or (2) when the applicant’s application-related activities involve a per se violation of a federal law.
This means that a cannabis company is unable to register its names for the actual cannabis products they sell. But this does not mean they cannot protect their names at all. Cannabis companies were forced to turn to goods and services that do not violate any federal laws in order to build a fence around their core product, which is contrary to what normally occurs when building a new trademark portfolio.
Cannabis companies started filing for water bottles, ash trays, smoking pipes, humidor, chocolate, candy, etc. The chocolate and candy descriptions could possible be blocked if the examining attorney issued a request for addition evidence. But if no request is made, the registration would issue. It is still vulnerable to a cancellation or opposition proceeding, but there may be a significant deterrent effect to having the registration before a challenge is made.
What does this mean for searchers? The lesson is that sometimes you need to think of what is related to the core goods or services of the trademark owner, and include those goods or service in your search equation. It also requires the searcher to ask questions about the trademark owner’s goods or services if your gut is telling you there may be an issue with what the trademark owner is trying to do.