Increased Likelihood of Significant Federal Cannabis Reform Could Clear The Smoke Clouding Trademark Registration for Recreational Marijuana Businesses
By: Jack Avery Gainer
Following what seems to be a common trend among the States, marijuana is now legal for recreational use in Illinois. According to the federal government, however, marijuana remains classified as a Schedule I Substance under the Controlled Substances Act. So what does this mean for new Illinois marijuana business owners seeking trademark protection? For those unfamiliar with trademark law, there exists three main categories of trademark protection: (1) Common law; (2) State Registration; and (3) Federal Registration.
First, common law trademark rights offer narrow protection limited to the geographic area where the mark is used in commerce. Second, state registration generally offers protection throughout an entire state. This level of protection trumps common law trademark rights; however, it does not defeat an assertion of rights associated with a federally registered trademark. Third, a trademark registered with the federal government serves as prima facie evidence of ownership of a mark and provides notice of said ownership to others effective upon registration.
For now, state registration is the highest level of trademark protection available to recreational marijuana business owners seeking protection of their intellectual property rights. To register for federal trademark protection, the United States Patent and Trademark Office (“USPTO”) requires trademarked products to have a legal use in commerce. Under current regulation, it is categorically impossible for recreational marijuana to have a legal use in commerce due to its designation as a Schedule I Substance under the Controlled Substances Act. Despite widespread cries in support of federal decriminalization of recreational marijuana among the States, the federal government has—until recently—failed to make any significant change to existing legislation.
The current federal regulation on trademark protection for recreational marijuana products offers a slew of potential problems such as branding, product identity, accountability, and product quality. One major issue is that marijuana business owners in Illinois, as well as those from other states which have legalized marijuana, are forced to register separately in each state where they want to do business. Going through multiple registration processes is arduous and not something many small business owners in the industry can afford to endure. Thus the industry remains a fraction of what it could be with nationwide decriminalization.
Though wavering, the federal government’s grip on the reigns of intellectual property (IP) rights for recreational marijuana is unnecessarily stunting the expansion of what would be a booming industry. Decriminalization would allow recreational marijuana products to become lawful commercial uses, therefore allowing mark owners the opportunity to register for federal trademark protection. With federal trademark protection, it is likely that the recreational marijuana industry will rapidly expand, stimulating the American economy through the addition of jobs and tax revenue.
Though not always controlling, common sense indicates that marijuana should be declassified as a controlled substance; and it appears that the U.S. Government is finally coming to terms with that. In November 2019, the House Judiciary Committee passed the Marijuana Opportunity Reinvestment and expungement Act of 2019 (“MORE Act”). The MORE Act would declassify cannabis as a federally regulated substance, and among other things, even go so far as to expunge federal marijuana convictions. Specifically, the passage of the MORE Act would result in the removal of cannabis from Schedule I of the Controlled Substances Act. The House of Representatives is set to vote on the MORE Act in September 2020.
The IP rights associated with recreational marijuana businesses deserve federal trademark registration, and it seems the government is beginning to agree. The passage of the MORE Act would be a positive step in the right direction. Until that point, however, IP rights for cannabis will remain in a holding pattern with mark owners limited to filing for state-level trademark protection wherever recreational marijuana use is legal.
 See 410 ILCS 705/10-5 (legalizing marijuana for recreational use effective January 1, 2020).
 21 U.S.C. § 812 (2020).
 See Karin D. Jones & James M. Shore, Marijuana Regulation § 11.02 (2018).
 Id. at § 2.05.
 15 U.S.C. § 1127 (2020) (defining “commerce”).
 15 U.S.C. § 1115(a) (2020).
 15 U.S.C. § 1127. Stating that “[t]he word “commerce” means all commerce which may lawfully be regulated by Congress.”
 Drug Scheduling, DEA, https://www.dea.gov/drug-scheduling (last visited Sept. 6, 2020).
 Virginia Wok Marino & Emily Kappers, USPTO Issues Examination Guide on Trademark Applications for Cannabis and Cannabis-Related Goods and Services, The National Law Review (June 11, 2019), https://www.natlawreview.com/article/uspto-issues-examination-guide-trademark-applications-cannabis-and-cannabis-related.
 Meredith Deliso, Bill to Decriminialize Marijuana At Federal Level Up For House Vote Next Month, ABC(Aug. 30, 2020, 3:49 PM), https://abcnews.go.com/Politics/bill-decriminalize-marijuana-federal-level-house-vote-month/story?id=72714766.