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California Cannabis Trademarks May Be Capable of Being Registered By January 1, 2018

April 3, 2017News & Recent Developments

California cannabis trademarks in 2018?

On November 8, 2016, California voters approved Proposition 64, the Adult Use of Marijuana Act ("AUMA"). And on December 12, 2016, Assembly Bill No. 64 ("AB 64") was introduced in the California Legislature. Although the AB 64 is still in its early stages and has a ways to go before being passed by the California Legislature and approved by the Governor, it has some important consequences for recreational and medical marijuana businesses who want to protect their trademarks.

AB 64 Amends California's Model State Trademark Law To Permit Registration of Cannabis Trademarks

California's Model State Trademark Law is contained in California's Business and Professions Code §§ 14200 et seq. At present, it does not provide for the registration of either recreational or medical cannabis trademarks. But AB 64, if passed, would add the following section to the Model State Trademark Law as § 14235.5:

14235.5. (a) Notwithstanding Section 14235, for purposes of marks for which a certificate of registration is issued on or after January 1, 2018, the following classifications may be used for marks related to medical cannabis and nonmedical cannabis goods and services that are lawfully in commerce under state law in the State of California:

(1) 500 for goods that are medical cannabis, medical cannabis products, nonmedical cannabis, or nonmedical cannabis products.

(2) 501 for services related to medical cannabis, medical cannabis products, nonmedical cannabis, or nonmedical cannabis products.

(b) For purposes of this section, the following terms have the following meanings:

(1) “Medical cannabis” and “medical cannabis products” have the meanings provided in Section 19300.5.

(2) “Nonmedical cannabis” and “nonmedical cannabis products” have the meanings provided for “marijuana” and “marijuana products,” respectively, in Section 26001.

As indicated above, AB 64 would take effect January 1, 2018.

AB 64 Is Important Because Federal Law Does Not Permit Cannabis Trademarks

AB 64's amendment to California's Model State Trademark Law is important because, without it, California individuals and companies involved in the cannabis industry would be unable to otherwise protect and enforce their trademark rights. Marijuana—whether medical or recreational—is illegal under federal law, namely, the Controlled Substances Act ("CSA"). 21 U.S.C. §§ 802(16), 812, 841(a)(1), 844(a).

And the Lanham Act and U.S. Patent and Trademark Office ("USPTO") are clear that the use of a trademark must be lawful in order to register a mark or qualify for protection under the Lanham Act. 15 U.S.C. § 1127 (defining commerce); 37 C.F.R. § 2.69; TMEP § 907. In fact, there have been several well-publicized recent Trademark Trial and Appeal Board ("TTAB") cases affirming the refusal to register cannabis related trademarks by the USPTO. In addition to not being able to obtain a federal trademark registration, such trademark owners also can't sue for trademark infringement under 15 U.S.C. § 1114 (infringement of registered marks) or 15 U.S.C. § 1125 (infringement of unregistered trademarks) in federal district court.

Therefore, until federal trademark law changes (and that doesn't appear likely anytime soon under the Trump administration), at least California cannabis trademark owners can obtain a California state trademark registration and sue for trademark infringement under § 14245 of the California Business & Professions Code in California state court.

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