Colorado announced this week that it earned about $3.5 million in taxes and fees from its legalized-marijuana industry in its first month of sales, which translates into about $14 million in gross sales revenue in January. Retail sales of state-sanctioned marijuana are set to start in Washington later this year. And of course, cannabis consumers will want to know who manufactured or grew the product they’re buying, which means that those suppliers are going to want trademarks.
So while marijuana trademarks are no longer a laughing matter, the legalities of establishing a protected brand are still hazy, since any manufacture, use, or possession of that drug remains illegal under federal law. Although the U.S. Patent and Trademark Office did briefly experiment with establishing a new trademark category for “processed plant matter for medicinal purposes, namely medical marijuana” in 2010, it quickly quit the effort and eliminated the category.
In part, that was because a brand-holder, in order to qualify for federal trademark registration, must show use of its brand in interstate (or international) commerce. While the U.S. Supreme Court held in Gonzales v. Raich that the federal government has the authority to prohibit even personal and non-commercial marijuana growing under its constitutional power to regulate “interstate commerce,” that de facto recognition of cannabis’ commercial potential does not translate into a right to a federal trademark. Rather, except for its brief experiment in 2010, the PTO has consistently stated that use in commerce creates protected trademark rights only when the use is “lawful.” And commerce in marijuana remains illegal under federal law.
Of course, the Trademark Act itself does not explicitly contain that “lawfulness” requirement—rather, it states only that the mark must be “used in commerce.” 15 U.S.C. § 1051(a). Now two states are allowing open but regulated commerce that will inevitably require some type of trademark usage. So putting aside the buzz-kill that filing a federal trademark application for any form of cannabis product would include a sworn admission that the applicant is violating (or intends to violate) federal drug laws, will the PTO now accept lawful use under state law as satisfying the “use in commerce” requirement?