New CA Cannabis Trademark Registrations Could Give Lawmakers Headaches

A bill was recently introduced in the California legislature that among other things would create classifications of trademark registrations for cannabis goods and services, but these additions may cause problems for legislators due to conflicts with existing state trademark registration rules.

Assembly Bill No. 64 (AB 64) was introduced on December 12, 2016 to harmonize existing California medical marijuana laws with a voter-enacted initiative legalizing recreational use and commercial sale of marijuana, the “Control, Regulate and Tax Adult Use of Marijuana Act” (AUMA). The proposed bill would create two new classifications for registering trademarks and service marks taking effect on January 1, 2018. “Class 500” would apply to medical and nonmedical cannabis or related products, and “Class 501” would cover medical and nonmedical cannabis-related services. However, these new classifications may contradict the stated intent of California’s existing trademark regime.

Trademarks and trade secrets, unlike copyrights and patents, are not preempted by federal law, which has led to all 50 states enacting some form of state-based trademark registration system. Unlike most other states, California’s Model State Trademark Law specifically calls for “…a system of state trademark registration and protection substantially consistent with the federal system of trademark registration and protection under the Trademark Act of 1946...” The law also says “the classification of goods and services shall conform to the classifications adopted by the United States Patent and Trademark Office.”

The USPTO briefly flirted with registering medical marijuana−related trademarks back in 2010, going as far as adding new descriptions in its Acceptable Identification of Goods and Services Manual for “processed plant matter for medicinal purposes, namely medical marijuana,” and “consumable products infused with medical marijuana.” However, examiners quickly reverted to the traditional stance of denying such registrations based on TTAB precedent that use of a mark in commerce must be “lawful,” and that despite lawfulness under state law, marijuana’s inclusion in the Controlled Substances Act (CSA) makes it illegal under federal law.

The new proposed California law not only fails to amend existing law that requires California’s trademark law to be “substantially consistent with the federal system,” but also does not follow the path of classification used by the USPTO’s short-lived regime and other legalization states where marijuana goods and services were allowed in existing classes rather than newly-created ones. On this point, AB 64 would create a new Business & Professions code section (§14235.5) which will add the two new cannabis classifications “notwithstanding Section 14235.” AB 64’s author, Assemblyman Rob Bonta (D-Alameda), said that owning legal trademarks will bring marijuana vendors “out of the shadows,” but at least one Republican lawmaker cautioned that while she doesn’t have a position on the bill yet, “it’s always precarious for a state to take on the federal government and make laws that are in conflict.” The debate on the trademark issue and the bill in its entirety will likely continue through this year.

Photo by Rotational [Public domain], via Wikimedia Commons.

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