Marijuana Business Magazine July 2019

Jeff Smith covers legal and regulatory issues for Marijuana Business Magazine. You can reach him at jeffs@mjbizdaily.com . Marijuana Business Magazine | July 2019 100 The idea is to create a fence, so if someone else comes along, you have the (protection) on a related good.” —Frank Herrera Another potential bonus from legalization: A trademark for a hemp- derived product may be enforceable against marijuana products, Fortin said. “The threshold issue is customer confusion,” Fortin said. “If there’s a likelihood of customer confusion, then you can enforce your mark against competing products.” For example, say a company pops up in another state with a similar name and logo for a marijuana product. As a hemp business, you might be able to enforce your federal trademark against that company if there is likely or actual consumer confusion. A word of caution, though: When companies brand hemp and marijuana products similarly, the trademark also may confuse customs agents and other authorities, leading to potential regulatory and legal issues when your hemp product is confused with federally illegal marijuana. ‘CREATING A FENCE’ While companies may not be able to trademark plant-touching marijuana products, MJ companies are having some success trademarking their wordmarks and logos for non-plant items. For example, in 2017, California- based multistate operator MedMen Enterprises successfully trademarked its geometric marijuana leaf design for T-shirts, sweatshirts, hoodies and other apparel. San Francisco-based dispensary The Apothecarium has won a number of trademarks over the years for wordmarks and/or logos related to clothing, business consulting services and its website. “The idea is to create a fence, so if someone else comes along, you have the (protection) on a related good,” said Frank Herrera, managing attorney for H New Media Law in Miami. Herrera cautioned, however, that enforcement of a trademark against another company might be curtailed if that other company uses the Controlled Substances Act as a defense. Trademarks must be used in connection with goods or services that are in legal commerce, Herrera said. Since marijuana is still illegal federally, an accused infringer could argue that you have no legally enforceable trademark. A cannabis business also may be able to achieve limited protection for its non-plant-touching marijuana products on a state-by-state basis through state registration, Herrera said. A standard flat fee to hire an attorney to file a trademark application is about $2,000, Herrera said. One can pay as little as $50 for a website search performed by an outside company, but, “You get what you pay for,” Herrera warned. “They’re mills, so I would stay away from that 100%.” THE SEARCH PROCESS Trademark searches are deceivingly difficult. A simple Google search is not enough to determine whether your in- tended trademark is “clear” for use and/ or registration, Herrera said. Herrera said historically an individual or business would apply for a trademark and meet with examiners. “But no one does that anymore—it’s all email and phone.” And while Herrera said it does help to talk on the phone, some examiners may reject an application because of what you divulge during the call about your business. Applicants should expect the trademark office will visit their website to see how the trademark is being used, Herrera said. A simple claim that you are using your trademark for “herbal smoking devices” can easily result in a Controlled Substances Act rejection, for example, if you advertise that your device can be used for smoking marijuana. For a trademark application, Herrera said it can take about three months for an examiner to file the trademark office’s initial position on the application. An initial rejection is common because of the Controlled Substances Act. After that, there might be a good deal of back and forth, which could involve amending the application before the trademark office takes its final action. Ini- tial rejections are sometimes withdrawn. Finley’s personal story is that she suffered greatly from a rare autoimmune disease for years. Prescription drugs, she said, only made her pain worse. Then, about a decade ago, she found relief from medical marijuana. Finley, a clinical psychologist by trade who had become an entrepreneur, was fascinated by the science of cannabis, in- cluding the “entourage effect” of combin- ing cannabinoids such as THC and CBD. She was determined to develop effec- tive combinations from cannabis plant extracts for medical conditions including cancer, seizures and chronic pain. Protecting Constance Therapeutics’ intellectual property already has been a four-year journey, she said, but “the point of the story is that if you know you have something unique, don’t give it up.”