CANNAINVESTOR Magazine U.S. Privately Held April / May 2019 | Page 129

Trademarks are sometimes referred to as “brands” or "brand names."

Under U.S. law, one acquires a trademark simply by using it in connection with the sale or rendering of goods or services. These are called common law trademark rights. Trademarks need not be registered, but federal and/or state registration are recommended as additional rights and benefits may be acquired through such registration. Unlike in the U.S., in most foreign jurisdictions, including in the EU, China, and Mexico, and soon to be Canada, where even dried cannabis can be included in a trademark registration, trademark rights are acquired through registration, and in some cases use is not even required, thus allowing third parties to stockpile marks without commercial use. Also unlike in the U.S., in many such jurisdictions, a trademark registration acts as a defense to an infringement claim by a third party. So, it is good to obtain registrations of trademarks.

To obtain a federal trademark registration, the owner must "lawfully" use the trademark in connection with the sale of goods or services. If the sale or distribution of the trademark owners' goods or services is prohibited by federal law, the trademark use is not "lawful" for purpose of federal trademark registration. It follows that because the sale of cannabis-related products and services may not be lawful at the federal level, e.g., under the Controlled Substances Act as a Schedule I substance and The Food, Drug and Cosmetic Act, it may not be possible to obtain a federal trademark registration for such goods or services. For example, the Trademark Office continues to refuse federal trademark registration for edibles containing cannabidiol (CBD) under The Food, Drug and Cosmetic Act.

On the other hand, because of the recently enacted 2018 Farm Bill, extracts of hemp, such as cannabidiol, are excluded from Schedule I provided the extract contains less than 0.3 percent THC. Nevertheless, as of this writing, the Trademark Office may still reject federal trademark applications for hemp oil extracts.

State trademark registration, however, is available for cannabis related products and services in states where such products and services are legal. For example, LIVE™ is registered in the State of Colorado for cannabis and hemp extracts, oils and vape pens. In some states, such as California, trademark registration laws are in the process of being updated, e.g., though California Senate Bill 185 was just introduced.