Earlier this month, the U.S. Patent and Trademark Office’s Trademark Trial and Appeal Board (TTAB) issued a decision that presents relevant considerations for those in the fast-growing marijuana industry. In the decision (In re Morgan Brown), the TTAB affirmed the rejection of a service mark application to register the below HERBAL ACCESS & Design mark in connection with “retail store services featuring herbs” because the TTAB found that the mark was actually being used in connection with the sale of marijuana.

Click here to view image.

The case is interesting because it illustrates some of the ongoing challenges marijuana industry proprietors face in seeking federal trademark and service mark registrations for marijuana-related goods and services.

It is common knowledge by now that U.S. trademark and service mark registrations cannot be obtained for marks used in connection with marijuana or any other marijuana-based products or services that violate the Controlled Substances Act (CSA). The USPTO has rejected a number of such applications. The grounds for these rejections is that registrations can only be obtained for marks used in lawful commerce, and marijuana-based products and many associated services are not lawful under federal law, because, although such products are legal in many states, they violate the CSA.

The CSA prohibits manufacturing, distributing, dispensing, or possessing marijuana and marijuana-based products, among other controlled substances. The CSA also prohibits selling, offering or using “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 Controlled Substances Act.”

Because direct trademark and service mark registrations are unavailable for marijuana products and services, many marijuana businesses have resorted to alternative approaches. One such approach is to file for registration of goods and services that are close or related, but are not themselves illegal. For example, the USPTO has approved applications covering the provision of informational websites on marijuana, publications about marijuana, computer software for aggregating marijuana news, consulting related to marijuana business, conducting marijuana-industry trade shows, entertainment services related to marijuana, and similar identifications.

In the Morgan Brown case, the applicant applied for registration of its mark in connection with “retail services featuring herbs.” These services are undoubtedly lawful, and the USPTO generally presumes that services are not unlawful. The USPTO examiner, however, examined the specimen of use filed by the applicant, found indicia of possible unlawful marijuana activity, conducted further research, and found conclusive evidence that the applicant was engaged in unlawful marijuana sales under the mark. Specifically, the specimen of use displayed a green cross — a symbol of the organized medical marijuana industry. The green cross triggered the examiner to take a closer look. Once so triggered, the examiner found on the applicant’s website various clear indicators that the applicant was engaged in the sale of marijuana. For example, the applicant’s website explicitly stated “Your Access Is Granted! Call or stop by today and find out why people consider our marijuana to be the best of the best!”

Following this discovery, it was not difficult for the examiner to reject the application, nor for the TTAB to affirm the rejection, despite the applicant’s argument that it did in fact sell other, lawful herbs besides just marijuana.

The takeaway from the decision is that marijuana businesses should not expect that creative efforts to obtain trademark registration will necessarily be successful. If the business is engaged in marijuana sales or other activity that is unlawful under the CSA, the application may still be rejected, notwithstanding the recitation of an otherwise lawful identification of goods or services. USPTO examiners are entitled to and will take a closer look if there is reason to suspect unlawful activity, and will reject associated applications accordingly. It certainly didn’t help that the applicant filed the green cross specimen, giving the examiner the suggestion of illegal activity at the outset.