The emerging U.S. cannabis industry has a trademark problem.
Since at least 2011, it has been the policy of the U.S. Patent and Trademark Office to reject any and all applications to register trademarks used for marijuana, sale of marijuana or any other goods or services thought to violate the federal Controlled Substances Act. Even trademarks for tangential and seemingly legal goods or services are likely to receive increased scrutiny from and may be rejected by the USPTO if the applicant appears to be in the weed business.
The reasoning for this policy is as follows: A federal trademark registration requires the applicant to use the mark in interstate commerce. Since distribution of marijuana is prohibited by federal law, any such commerce would be unlawful. Property rights cannot arise through unlawful acts. Therefore, cannabis-related trademarks are not “in use” and not entitled to registration.
[For a much more extensive discussion of the USPTO’s policy towards cannabis trademarks, check out Chris’s award-winning paper High Stakes: Marijuana Brands and the USPTO’s “[Lawful] Use” Registration Criterion, forthcoming from the Chicago-Kent Journal of Intellectual Property]
This fundamental problem persists even as state-level legalization of marijuana expands. However, the inability to effectively protect their trademarks hasn’t stopped cannabis businesses from trying to build national brands.
Two recent developments illustrate the importance of trademark protection to the cannabis industry.
Gorilla Glue v. GG Strains
Named for its sticky buds, the “Gorilla Glue” strain of marijuana rose to prominence around 2014-2015 thanks to a series of awards at high-profile growers’ competitions such as the High Times Cannabis Cup and favorable coverage in trade publications.
Gorilla Glue was bred by Don Peabody. As its popularity exploded, Peabody attempted to capitalize on his success by forming GG Strains, LLC to certify authentic Gorilla Glue strains. Without a federal trademark registration, however, this is a tricky business model. Enforcing exclusive rights to a marijuana strain is already problematic, since plant varietal names are by definition considered generic and not eligible for trademark protection. The intellectual property purgatory produced by the USPTO’s “lawful use” rule only clouds the issue further. Without a credible threat of legal enforcement, why would a grower or dispensary pay GG Strains for permission to call their bud “Gorilla Glue”?
Unfortunately, Peabody’s fragile licensing model was not the end of his trademark woes. Eventually, the endless mentions of #gorillaglue on social media caught the attention of the adhesives manufacturer to which the strain paid homage. Last March, Ohio-based The Gorilla Glue Co. sued GG Strains for infringing and diluting its long-standing GORILLA GLUE trademark.
The standard for trademark infringement is Likelihood of Confusion, which takes into account a variety of factual and legal factors. It’s something that effectively needs to be evaluated on a case-by-case basis. Just because the two marks are identical doesn’t mean Gorilla Glue Co.’s case is ironclad. GG Strains can certainly argue that, whatever other confusion might arise after a strong hit of Gorilla Glue #4, users are unlikely to believe that the bud they’re smoking is affiliated with the actual glue company. By the same token, though, the fact that GG Strains doesn’t sell adhesives doesn’t resolve the matter, since relatedness of the goods is only one aspect of Likelihood of Confusion. Meanwhile, Gorilla’s trademark dilution claim doesn’t require it to show Likelihood of Confusion at all, only that the GORILLA GLUE mark is sufficiently “famous.”
It’s not the first time a straight-laced brand has sued a cannabis business over an unauthorized trademark reference. In 2014, for example, Hershey sued Colorado edibles-maker Tincturebelle for selling THC-laced candy bars cheekily packaged as “Hashee’s” and “Ganja Joy.”
But this lawsuit must be especially frustrating for GG Strains. Under current interpretations of federal law, its commercial use of the GORILLA GLUE marijuana brand doesn’t entitle it to trademark protection, but that same commercial use can still infringe the trademarks of others. As discussed in High Stakes, it would seem that if a mark is not “in use” for purposes of registration, it cannot simultaneously be “in use” for purposes of infringement (thereby ascribing two different meanings to the same words within a single statute), but we do not expect counsel for GG Strains to urge this argument and are skeptical that it would be embraced by the court.
At last check, GG Strains has moved to dismiss the suit (which was filed in Gorilla Glue Co.’s home turf in Cincinnati) for lack of jurisdiction and improper venue. The case is ongoing.
California’s New Cannabis Trademark Bill
Like many cannabis businesses, GG Strains has attempted to fill the hole left by its lack of federal trademark rights by applying for state registrations.
This strategy has many shortcomings. State trademark registries don’t offer the same advantages as federal registration, such as national priority, subject-matter jurisdiction in the federal courts, presumption of validity in infringement actions, and use of the registered trademark symbol. Many state registrations are, in fact, of quite limited value. Colorado registrations, for example, don’t even come with a presumption of statewide priority to the mark or a cause of action for infringement.
More importantly, the value of state registrations extends, at best, to the state’s borders. This creates an inconsistent patchwork of rights that is bound to be problematic for businesses attempting to build their brands in an increasingly national marketplace. GG Strains obtained Colorado and Nevada registrations, neither of which are typically a problem for cannabis brands. California’s trademark law, however, explicitly incorporates federal standards for registration, and thus the state trademark registry for the nation’s largest economy has traditionally not permitted marks used in connection with marijuana.
That may change soon, though. In December, 2016, the California legislature introduced AB-64. The bill would amend the California Business and Professions Code to create two new classifications for cannbis-related trademarks, notwithstanding the prohibitions of federal law. AB-64 is still in committee as of the date of this article, but so far it appears to have encountered little opposition from lawmakers.
The ability to obtain a California registration is an important development as the epicenter of U.S. marijuana cultivation prepares to legalize sale of the drug for recreational use on January 1, 2018, but it won’t solve the intellectual property challenges faced by the cannabis industry. Until Congress takes up its own version of AB-64, the legal limbo for marijuana brands will continue.