From Prohibition To Protection: Could Marijuana's Reclassification Unleash A Surge In Trademark Filings?

The recent proposal by U.S. Attorney General Merrick Garland to reschedule marijuana from Schedule I to Schedule III under the Controlled Substances Act (CSA) could significantly impact cannabis trademark law.

A report by Jacob J. Golan, Jonathan Hyman and Jonathan Menkes, attorneys at Knobbe Martens explains that if implemented this shift would move marijuana from its current classification alongside heroin and LSD, potentially altering the landscape for cannabis-related trademarks.

Trademark Implications

The CSA’s scheduling system affects not only the legality of a substance's use but also its trademark registration.

Historically, the US Patent and Trademark Office (USPTO) has refused to register trademarks for cannabis goods or services due to the requirement for lawful use in commerce.

Despite legalization in several states, federal law under the CSA has prevented cannabis trademarks from being registered.

“The fact that 24 states have legalized recreational cannabis, and 38 states have legalized medicinal cannabis, does not impact the USPTO’s current trademark examination standards, which are derived from federal law,” the attorneys noted.

Potential Changes For Cannabis Trademarks

If cannabis is reclassified to Schedule III, the USPTO may reconsider its stance on cannabis trademarks. This could mean the removal of CSA considerations from the trademark examination process, potentially allowing a flood of cannabis-related trademark applications.

However, the USPTO might still use the Food, Drug and Cosmetic Act (FDCA) provisions as a barrier.

Impact On Businesses

Reclassification to Schedule III will not equate to full legalization. Companies will need to comply with DEA regulations, including secure storage, accurate records and proper disposal practices. This change might lead to conditional acceptance of trademarks based on regulatory compliance, providing flexibility for startups and expanding businesses.

According to the report, the fate of pending trademark applications remains uncertain. The USPTO could allow applicants to amend their filing dates to reflect the new legal framework, affecting trademark priority.

Proposed Rescheduling And Its Process

The DEA, in cooperation with the FDA, holds the authority to reschedule cannabis. Following the formal notice of proposed rulemaking issued by the DEA on May 21, 2024, comments are open until July 22, 2024. The subsequent process, including administrative hearings and reviews, could take months to years and might face legal challenges.

Criteria For Rescheduling

The DEA’s proposed rulemaking outlines eight factors for deciding whether to control or reclassify a substance under the CSA:

• The substance’s potential for abuse
• Scientific evidence of its pharmacological effect
• Current scientific knowledge about the substance
• History and current pattern of abuse
• Scope, duration, and significance of abuse
• Risk to public health
• Psychic or physiological dependence liability
• Whether the substance is a precursor to a controlled substance

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