Canada’s Legalization of Recreational Marijuana and Overhaul of its Trademark Law is Fueling Cannabis Trademark Registrations
Canada’s legalization of recreational marijuana and overhaul of its trademark law is fueling cannabis trademark registrations. But is it time for U.S. companies to follow suit?
Cannabis remains a Schedule I substance in the U.S. under the federal Controlled Substances Act (CSA). Cannabis businesses therefore often face difficulties securing federal IP protections, particularly with respect to trademarks. The U.S. Patent and Trademark Office (USPTO) has consistently refused federal registration of medical marijuana and other cannabis-related trademarks.
In addition to citing the CSA, the USPTO’s denials also rely on 37 C.F.R. § 2.69, which states that “[w]hen the sale or transportation of any product for which registration of a trademark is sought is regulated under an Act of Congress, the Patent and Trademark Office may make appropriate inquiry as to compliance with such Act for the sole purpose of determining lawfulness of the commerce recited in the application.” The Lanham Act governs U.S. trademark law and is empowered by the Commerce Clause, and so at the federal level “lawfulness” is denied and trademarks in the cannabis space are federally ineligible.
Cannabis Trademarks in Canada
Under Canadian law, it is possible to register a trademark for cannabis-related products and services. There are nearly 2,000 trademarks listed on the Canadian trademark register, with goods or services containing the word “cannabis” or “marijuana,” the majority of which were filed within the past two years. The number is expected to grow now that Canada has legalized recreational marijuana and amended its Trademark Act.
Effective June 17, 2019, Canadian trademark applicants no longer have to demonstrate use of the mark in Canada as a requisite to registration. In contrast, under U.S. trademark law, except in certain limited filings based on foreign registrations, to secure a registration applicants must be using the mark in U.S. commerce.
The change in Canada makes it attractive for companies to file trademark applications before they are ready to enter the Canadian market. For the U.S. cannabis industry, it also allows companies to begin protecting their brands even though it’s not currently possible to do so under U.S. federal trademark law.
Canada’s Cannabis Act Restricts Marketing
While it may be relatively easy to secure trademark protection for cannabis products in Canada, you may not be able to use those marks like you planned. Any use of the trademark must also comply with the Cannabis Act’s marketing rules, which are stringent. Specifically, it is prohibited to promote cannabis or a cannabis accessory or any service related to cannabis, including:
By communicating information about its price or distribution;
By doing so in a manner that there are reasonable grounds to believe could be appealing to young persons;
By means of a testimonial or endorsement, however displayed or communicated;
By means of the depiction of a person, character or animal, whether real or fictional; or
By presenting it or any of its brand elements in a manner that associates it or the brand element with, or evokes a positive or negative emotion about or image of, a way of life such as one that includes glamour, recreation, excitement, vitality, risk or daring.
Canada’s cannabis regulations also include strict labeling requirements. Each product label must include a standardized cannabis symbol that meets certain size, appearance, and placement requirements. In addition, mandatory health warning messages and THC content are required on all cannabis packaging.
Despite the above restrictions, trademarks can still be beneficial to cannabis companies in Canada and the United States. The expected growth in both markets is also expected to increase the number of “trolls,” which seek to register intellectual property before the rightful owner and then later attempt to extort payment to transfer the rights.
If you have any questions or if you would like to discuss the matter further, please contact me, William R. Samuels, or the Scarinci Hollenbeck attorney with whom you work, at 201-806-3364.
Disclaimer: Possession, use, distribution, and/or sale of cannabis is a Federal crime and is subject to related Federal policy. Legal advice provided by Scarinci Hollenbeck, LLC is designed to counsel clients regarding the validity, scope, meaning, and application of existing and/or proposed cannabis law. Scarinci Hollenbeck, LLC will not provide assistance in circumventing Federal or state cannabis law or policy, and advice provided by our office should not be construed as such.
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