trademark

This past June, in Icanu v. Brunetti, the U.S. Supreme Court held that the First Amendment requires the U.S. Patent and Trademark Office (“PTO”) to accept registration of “immoral” or “scandalous” trademarks. As a result, Erick Brunetti may now register the trademark for his clothing line: FUCT. The Brunetti decision came only two terms after the Supreme Court ruled in Matal v. Tam that a “disparaging” trademark, THE SLANTS, be registered on behalf of the Portland-based band of the same name. For companies, these rulings telegraph a fairly open stance by the Court to grant protectable intellectual property rights for trademarks comprised of word(s) with a high potential to offend a slice of the general public. But there is one big exception: cannabis.

Inconsistent application of the ban on immoral, scandalous and disparaging marks by the PTO had long been tricky for trademark applicants and a major roadblock to marketing products with avant garde names. During oral arguments in both Brunetti and Tam, multiple Justices were critical of the PTO’s inconsistent application of the rules against registration of disfavored trademarks. Now, the headaches suffered by nearly all businesses whose brands might be too edgy should be a thing of the past. And those who are denied by a trademark examiner because the mark is immoral, or disparaging should be able to win a reversal in court.

However, the Court’s two recent decisions raise the question: if the PTO must register a trademark for the name of a rock band despite the name being potentially disparaging of ethnic Asians, and if the PTO must register a potentially vulgar trademark suggestive of a sex act, then must the PTO also issue trademarks for federally illegal drugs that trademark examiners seem to think are immoral? Which brings us back to cannabis.

For nearly every other type of American business except cannabis, trademarks may be easily registered, and intellectual property rights secured. But for the cannabis industry, the PTO has automatically denied registration of applicants’ marks because the product is illegal under federal law. Some companies successfully registered their marks by registering for “herbs” or “botanical medicine” without being truthful about what type of “herb” or “botanical medicine” they are selling. Others registered their marks for ancillary products, like shirts and hats displaying the name and logo of a dispensary. Both options are less than ideal; they leave the business with voidable or weak intellectual property rights.

Here is the fundamental question: has the Supreme Court opened the door to cannabis-related trademarks via its recent decisions in Brunetti and Tam?

A few pages into the Brunetti opinion, Justice Kagan hints that cannabis may be the next set of marks addressed by the Court:

The PTO rejected marks conveying approval of drug use (YOU CAN’T SPELL HEALTHCARE WITHOUT THC for pain-relief medication, MARIJUANA COLA and KO KANE for beverages) because it is scandalous to “inappropriately glamoriz[e] drug abuse.” [citations]. But at the same time, the PTO registered marks with such sayings as D.A.R.E. TO RESIST DRUGS AND VIOLENCE and SAY NO TO DRUGS—REALITY IS THE BEST TRIP IN LIFE. [citations]. Similarly, the PTO disapproved registration for the mark BONG HITS 4 JESUS because it “suggests that people should engage in an illegal activity [in connection with]worship” and because “Christians would be morally out-raged by a statement that connects Jesus Christ with illegal drug use.” [citation].

Iancu v. Brunetti, No. 18-302 (U.S. Jun. 24, 2019), Slip. Op. at pp. 6–7.

Though helpfully setting the stage for an enterprising trademark attorney to establish that cannabis related trademarks are neither “immoral” or “scandalous,” Justice Kagan successfully evaded comment on the more pressing question for drug industry businesses: may the PTO deny registration of applicants for drug-related trademarks because the applicant’s use of the mark in commerce is not lawful under federal law? Someone should try to find out, but not with cannabis. The Justices — some of whom are old enough to remember President Kennedy — may not be receptive to such a blunt approach.

An ordinary legal drug or dietary supplement may serve as a “Trojan horse” of sorts, opening up mark protection for cannabis businesses. A case about supplements, CreAgri, Inc. v. USANA Health Sciences, went to a federal appeals court in California in 2007. It resulted in the cancellation of CreAgri’s mark OLIVENOL because its improper labeling meant that CreAgri had not used the mark lawfully in commerce. The result seemed harsh: cancellation of a trademark based on a labeling violation. If revisited and reversed, such a decision would be impactful for the cannabis space, where the same issue applies.

Importantly, Neither Tam nor Brunetti addressed the ordinary reason for why the PTO usually denies trademark applications. Most trademark applications denied by a PTO Examiner are denied because the mark was descriptive or similar to another mark, not because it runs afoul of a public policy goal of the government like preventing immoral or illegal products and companies from obtaining valuable monopolistic intellectual property rights. Don’t expect that to change — if an applicant’s mark is not a good mark – potentially scandalous or not – the PTO won’t register it, period.

It may be that after the decisions in Tam and Brunetti, the PTO will be less interested in denying registrations on public policy grounds. If they do, courts may be skeptical of the PTO’s analysis and may instead choose to award the applicant with federal registration of their trademark.

The Justices’ open skepticism of the PTO’s ability to consistently apply the laws governing free speech will help applicants who challenge denials of their trademark applications by the PTO in court. While most court cases never reach the Supreme Court, the Court sets the national tone for any industry affected by its decisions. Branding is no exception. If the PTO says no to your trademark, now is a good time to bring a challenge. Of course, consult your lawyer first.

However, taking a commercial cannabis trademark case to the Supreme Court may still be too risky. A test case like CreAgri, on the other hand, might give the Supreme Court the opportunity to reverse the PTO for a third time after THE SLANTS and FUCT, checking the boxes for all three of sex, drugs, and rock ‘n’ roll.

*Mr. Dorsi also wrote a legal analysis of the same issue, with citations to the prior court decisions a lawyer could use. See https://www.astralegal.com/sex-drugs-and-rock-n-roll-at-the-trademark-office/

Michael Dorsi and Hannah Stitt are attorneys with the San Francisco-based law firm Ad Astra Law Group, LLP representing individuals and companies in business and commercial litigation. Dorsi can be reached at mDorsi@astralegal.com, and Stitt can be reached at hstitt@astralegal.com.

Trademark stock photo by Wolfilser/Shutterstock