‚ÄčLegalized Marijuana Business Denied Federal Trademark Registration

July 27, 2016 Intellectual Property Alert

Owners of medical marijuana* dispensaries cannot obtain federal trademark protection on marks used in connection with marijuana sales — even if their home state’s laws have legalized marijuana businesses — because marijuana is an illegal substance under federal law, and therefore encompasses a use that is unlawful, the Trademark Trial and Appeal Board has ruled.

In its July 14 decision in In re Morgan Brown, the TTAB upheld the decision of a trademark examiner at the U.S. Trademark Office who denied protection of a marijuana dispensary’s mark citing federal anti-drug laws.

The trademark applicant, Morgan Brown, resides in the state of Washington, where adults are permitted to possess certain quantities of marijuana in solid and liquid forms. Brown operates a retail store in Washington and an online dispensary at herbalaccess.com. He applied to the U.S. Trademark Office to register his use of the words “Herbal Access.”

The TTAB affirmed the examiner’s decision, reasoning that “the fact that the provision of a product or service may be lawful within a state is irrelevant to the question of federal registration when it is unlawful under federal law.”

The decision highlights the conflict that exists for businesses that comply with state law requirements but are unable to receive any federal legal protection, whether in terms of intellectual property rights or access to federal bankruptcy courts, among other things.

It is unlikely that TTAB’s decision will be overturned by any federal court anytime in the near future. A viable alternative for owners of medical marijuana dispensaries seeking protection of a mark associated with marijuana may be able to obtain state law protection. Although not as far-reaching, such protection can benefit the business on a statewide level.

Consult with an attorney to determine whether state law trademark protection is an option for you. For more information about this alert or if you have any questions or concerns, please contact Ashe Puri at 310.598.4154 or [email protected] or any member of Fox Rothschild’s Intellectual Property Department.

* Please be mindful that possessing, using, distributing and/or selling marijuana is a federal crime, and no legal advice we give is intended to provide any guidance or assistance in violating federal law nor will it provide any guidance or assistance in complying with federal law. Please also note that we are not advising you regarding the federal, state or local tax consequences of engaging in any business in this industry.