By: Erica Paige Fang
The current California Model State Trademark Law provides for the registration of trademarks and service marks with the California Secretary of State and requires the classification of goods and services conform to the classifications adopted by the United States Patent and Trademark Office (USPTO). This has created a roadblock for business owners in the cannabis industry because the USPTO will not register a mark where the goods and services are related to illegal drugs, and to date, cannabis is still classified as a Schedule 1 substance by the Drug Enforcement Agency and the Food and Drug Administration.
Section 2(a) of the Lanham Act bars registration of trademarks that consist of or comprise immoral, deceptive, or scandalous matter. 15 U.S.C. § 1052(a). The Examiners at the USPTO have rejected as scandalous and immoral several trademark applications related to illegal drugs, citing the adverse health effects of drug use and the classification as a Schedule 1 substance. California has refused state registration for cannabis related trademarks and service marks on the same basis. California Assembly Bill 64 looks to change this and allow a certificate of registration that is issued on or after January 1, 2018 for marks related to medical and nonmedical cannabis goods and services that are lawfully in commerce under state law in the State of California. The Bill proposes to add Section 14235.5 to the California Business and Professions Code, listing the following classifications that may be used for marks related to medical and nonmedical cannabis goods and services: (1) 500 for goods that are medical cannabis, medical cannabis products, nonmedical cannabis, or nonmedical cannabis products; (2) 501 for services related to medical cannabis, medical cannabis products, nonmedical cannabis, or nonmedical cannabis products.
Up until this point cannabis businesses have been at a disadvantage because they cannot protect their brand. This downfall has lead to trouble securing investors and growing the businesses. The other recreational states, Washington and Oregon, have passed similar legislation to offer trademark protection to cannabis businesses in their respective states. If AB-64 passes, cannabis businesses will want to have acceptable specimen of use ready and a way to date it back to the first use in commerce in order to make registration as smooth as possible.
AB-64 also looks to restrict the advertising of medical and non-medical cannabis and cannabis products. Proposition 64 that was passed in November 2016 included some advertising restrictions, prohibiting the placement of billboards advertising cannabis that are located on an interstate highway or state highway that crosses the boarder of any other state. AB-64 would expand this restriction to prohibit advertising on all interstate and state highways. So while AB-64 may allow the State to grant trademark protection, where companies use that mark to advertise will have to comply with the state’s restrictions.
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