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Monday December 7, 2020

Cannabis Trademarks on the Rise

Posted in: Business Law

The recent United States elections added four more states to the list of US jurisdictions where cannabis has been legalized for recreational or medical use: New Jersey, Arizona, Montana and South Dakota. The first to do so was Colorado in 2012 and since then 19 others have made similar moves. It is expected that New York, Florida and Ohio will follow suit in 2021.

For Canadian cannabis producers, these large American states represent a huge emerging consumer market of well over 100 million people.

Unlike Canada’s federal Trademarks Act, the US federal trademark regime still considers cannabis to be an illegal substance for which trademark protection is not permitted by the US Patent & Trademarks Office (USPTO). Without federal brand protection, American cannabis producers must comply with a patchwork of individual state trademark laws with different application requirements and conflict resolution approaches. In addition, city and county governments can negatively affect cannabis producers’ brands, as a California court case revealed last week; even if it is lawful to sell and purchase it at the state level, local authorities can prohibit its home delivery to buyers within their geographical boundaries.

If (or when) the USPTO changes its policy to allow federal trademark registration, cannabis branding and related litigation south of the border will be significantly more efficient. In the meantime, Canadian producers have a big head start and a potential marketing advantage.

Since the coming into force of the Cannabis Act (Canada) on October 17, 2018, the Canadian Intellectual Property Office (CIPO) has registered 291 cannabis-related wordmarks and 128 design marks. There are over 5,000 cannabis-related trademark applications pending before the CIPO.

In 2019, to facilitate the processing of cannabis-related trademark applications, the CIPO added the following generic product descriptions to its Goods & Services Manual for use by trademark agents (when drafting applications) and examiners (when reviewing them for approval): cannabis grinders, dried cannabis, cannabis oil for cosmetic purposes, cannabis oil for electronic cigarettes, chocolate bars infused with cannabis, cannabis oil for the treatment of cancer, and live cannabis plants.

Moreover, Canada is leading the way internationally in this “growing” field of trademark law. Representatives from the CIPO and the Intellectual Property Institute of Canada (IPIC) recently persuaded the World Intellectual Property Organization committee responsible for worldwide goods and services classification (under the Nice Convention) to add to its official alphabetical list three cannabis-related goods and services. Part of the impetus was that Canadian applications are flooding trademark registries around the globe, even in countries where the product remains illegal.

The Canadian cannabis industry reported revenues of $3.6 billion in 2020 and is expected to hit $5.0 billion in 2021, when edibles become regulated and more widely available. As more producers achieve a Canadian market foothold and expand their sales geographically, they will inevitably develop distinctive and strong cannabis brands that certain less scrupulous competitors will want to imitate or copy.

Applying to register a cannabis-related trademark, whether a word, a logo or other identifier of source, will provide not only a protective shield from those who might innocently replicate the brand, but also a litigation sword to stop the rogues and copycats who tend to lazily imitate market leaders’ brands and ride their coattails.

For more information about protecting cannabis-related trademarks in Canada, please contact our Trademark Agent, Marc Belliveau.

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