Florida Medical Marijuana CLE in June

I’ll be giving a short presentation on the intellectual property issues relevant to medical marijuana businesses – whether it’s a dispensary, farm, “lifestyle” brand, or any other company with an interest in medical (or legal recreational) marijuana.

The CLE is in Miami on June 29 and 30.

I encourage you to take a look at the agenda for this CLE.  Not only is John Morgan speaking at the event, but some highly-respected and experienced attorneys will also be speaking, such as folks from Harris Bricken LLP.  I’m looking forward to this CLE not only for the chance to speak but also for the chance to hear and learn from these industry veterans.

Here’s a link to the program, and these are the main topics:

  • Amendment 2 Rules Update
  • Federal vs. State Conflict
  • Taxes and the Treatment of Cannabis Income
  • Real Estate and Land Use
  • Intellectual Property
  • Marijuana Banking
  • Investing in the Cannabis Industry
  • Ethical Considerations and Legalized Marijuana
  • Medical Experience in Other States
  • Contracting with Marijuana Related Businesses
  • Insurance in the Cannabis Industry

Medical Marijuana – The Wild, Wild, East(coast)

Entrepreneurs are flooding Florida as the state’s citizens prepare to vote on legalizing marijuana for medicinal purposes this November. The initiative is on the ballot, and signs are pointing toward enough support to pass the amendment to the Florida Constitution.

As with any new industry, the rush to make a buck has been swift and fierce. Medical marijuana schools are being advertised, seminars are being held at hotels, and law firms are ramping up to guide entrepreneurs through the state regulations. Of course, there are no state regulations yet, but the early bird gets the weed, and it makes sense to start consulting with your attorney of choice regarding what may happen in early 2015.

Clearly, medical marijuana is going to be a “Florida IP Trend” if it isn’t already.

But, the majority of intellectual property practice is based on federal law – the Lanham Act, the Copyright Act, and the Patent Act all arise out of either the Article I, Section 8, Clause 8 of the U.S. Constitution (copyrights and patents) or the Commerce Clause of the Constitution (granting the federal government the right to regulate interstate commerce, including interstate trademark use).

As you may have heard, marijuana remains illegal at the federal level, and trademark applications before the United States Patent and Trademark Office are being routinely rejected with essentially the same boilerplate language:

SECTIONS 1 AND 45 REFUSAL – NOT IN LAWFUL USE IN COMMERCE

Registration is refused because the applied-for mark, as used in connection with the goods and/or services identified in the application, is not in lawful use in commerce.  Trademark Act Sections 1 and 45, 15 U.S.C. §§1051, 1127.

To qualify for federal trademark/service mark registration, the use of a mark in commerce must be lawful.  Gray v. Daffy Dan’s Bargaintown, 823 F.2d 522, 526, 3 USPQ2d 1306, 1308 (Fed. Cir. 1987) (stating that “[a] valid application cannot be filed at all for registration of a mark without ‘lawful use in commerce'”); TMEP §907; see In re Stellar Int’l, Inc., 159 USPQ 48, 50-51 (TTAB 1968); CreAgri, Inc. v. USANA Health Scis., Inc., 474 F.3d 626, 630, 81 USPQ2d 1592, 1595 (9th Cir. 2007).  Thus, any goods or services to which the mark is applied must comply with all applicable federal laws.  See In re Midwest Tennis & Track Co., 29 USPQ2d 1386, 1386 n.2 (TTAB 1993) (noting that “[i]t is settled that the Trademark Act’s requirement of ‘”use in commerce,” means a “lawful use in commerce,” and [that the sale or] the shipment of goods in violation of [a] federal statute . . . may not be recognized as the basis for establishing trademark rights'” (quoting Clorox Co. v. Armour-Dial, Inc., 214 USPQ 850, 851 (TTAB 1982))); In re Pepcom Indus., Inc., 192 USPQ 400, 401 (TTAB 1976); TMEP §907.

The Controlled Substances Act (CSA) prohibits, among other things, manufacturing, distributing, dispensing, or possessing certain controlled substances, including marijuana and marijuana-based preparations.  21 U.S.C. §§812, 841(a)(1), 844(a); see also 21 U.S.C. §802(16) (defining “[marijuana]”).  In addition, the CSA makes it unlawful to sell, offer for sale, or use any facility of interstate commerce to transport drug paraphernalia, i.e., “any equipment, product, or material of any kind which is primarily intended or designed for use in manufacturing, compounding, converting, concealing, producing, processing, preparing, injecting, ingesting, inhaling, or otherwise introducing into the human body a controlled substance, possession of which is unlawful under [the CSA].”  21 U.S.C. §863.

In the present case, the application identifies applicant’s goods and/or services as follows: “Providing a web site that features informal instruction on the cultivation of medical marijuana.”

The evidence submitted with applicant’s response to the previous Office action plainly indicates that applicant’s identified services include activities that are prohibited by the CSA, namely, instruction on how to grow, cultivate, harvest and produce marijuana.

Because these goods and/or services are prohibited by the CSA, the applied-for mark, as used in connection with such goods and/or services, is not in lawful use in commerce.

 

There are currently 327 applications and/or registrations in the USPTO’s database which contain the word “marijuana” in the description of goods or services.  Of those 327, only 45 are (or were) actually registered.  While many of those 327 applications were rejected with language similar to that cited above, the few that squeaked by are either anomalies and/or the work of skilled trademark practitioners who know how to carefully craft a description of services.  (To be fair, many of the ones that have not been registered were allowed to be registered, but the applicants did not follow up with certain filing requirements, such as specimens of use.)

As an example of the division between allowable and not allowable, consider that a popular website located at http://www.leafly.com received a registration for LEAFLY for use with, among other things:

“Providing consumer information in the field of medical marijuana dispensary inventories and locations; providing links to web sites of others featuring consumer information on medical marijuana inventories and locations; providing a web site featuring the ratings, reviews and recommendations on products and services for commercial purposes posted by users; providing consumer information regarding medical marijuana dispensaries, inventories and locations”

and

“Providing health information in the field of medical marijuana, and regarding indications and effects of particular cannabis strains, and regarding medical marijuana dispensaries, inventories and locations”

Yet, an application for MARY N’ JANE for use with “Providing a web site that features informal instruction on the cultivation of medical marijuana” was rejected per the above language.  The difference is apparently that using the trademark in connection with marijuana cultivation instruction is not ok, but using the mark for general information about marijuana dispensaries is ok.  This logic is further supported by questions that USPTO Examining Attorneys are routinely asking of applicants with marijuana-based goods or services, namely:

Do the applicant’s classes, seminars, and/or workshops involve the provision of, instruction on how to grow, and/or instruction on how to obtain marijuana, marijuana-based preparations, or marijuana extracts or derivatives?

Are the applicant’s services lawful pursuant to the Controlled Substances Act?

If the answer to the first question is Yes, no registration for you.

So, what is the Florida-based medical marijuana entrepreneur to do?  State trademark registrations are an option, but Florida does not recognize “intent to use” applications like the USPTO does.  This means that even if you are planning to open a dispensary, nursery, or other marijuana-related establishment once the regulations are drafted and licenses are issued, you cannot apply for the state trademark registration now because you cannot yet legally run a medical marijuana facility in Florida.  The flood of state applications that will occur on Day 1 will be astounding, and anyone who has used Florida’s state registration system knows that this impending flood just might break the system.

Another interesting aspect of medical marijuana in Florida is that just last year our lawmakers passed the so-called Bong Ban Bill, making it illegal to sell virtually anything that can be used to smoke marijuana…but only if the seller intended for the item to be used in violation of the drug paraphernalia laws.  So, if you do not intend for people to use your hand-crafted glass pipe to smoke illegal substances, presumably you do not violate the law.  (As with everything on this blog, the preceding is not legal advice.  If you intend to sell pipes, you should consult an attorney.)  Once Amendment 2 passes and medical marijuana is legalized in Florida, I’m guessing that the “Bong Ban” will need some renovation.