3 December 2018

Trade mark protection for a growing cannabis market

The general public’s perception of cannabis as an illegal narcotic, whose use is likely to harm the mental and physical health and wellbeing of its consumers, is changing. Laws prohibiting or permitting cannabis use vary widely with Uruguay, some states in the US and recently Canada legalising recreational cannabis use and other countries such as Mexico, Germany and Denmark legalising medical use, with many other countries considering a change in stance.

Whilst the negative personal and societal effects of uncontrolled use of cannabis are still widely accepted, the use and production of cannabis products for medicinal purposes is also fast gaining acceptance and the (regulated) legalisation of cannabis for recreational use is also spreading. There is also growing investment and interest by consumer food and drink producers in how to use the non-psychoactive constituent parts of the cannabis plant to add flavours, aromas and wellbeing effects to their products. In this fast changing and potentially lucrative environment brand protection is becoming increasingly important. By looking at the position in the US, Canada and the UK/EU this article seeks to consider what protection is available through trade mark registration for cannabis marks and products.

In the US it is not possible to obtain a federal trade mark registration for any mark that covers actual cannabis products or directly related goods or services. United States federal trade mark registrations are based on “lawful use of a mark in commerce” and use of cannabis marks for cannabis products or services is prohibited by the Control of Substances Act (CSA) and is therefore not “lawful use in commerce”. Most recreational medicinal cannabis products and services violate the CSA and the USPTO’s current position is that trade marks for cannabis products are not entitled to registration. Even where trade mark applications are based on foreign applications or registrations in countries where such products or services may be legal the USPTO will refuse the application on the basis that its use in the US would violate the CSA. However, although federal registration is not available, a number of US states have legalised cannabis in some form and state trade mark registrations may therefore be available. Although state trade mark registrations do not offer the same protection as a federal registration, they are relatively cheap and easy to obtain and are a matter of public record.

Federal trade mark registrations may also be available for ancillary goods and services which are indirectly related to cannabis. These may cover retail, business or consultation services in class 35 or entertainment and educational services in class 41. The CSA prohibits the manufacture, distribution, dispensing and possessing of cannabis or related products. So services that, for example, provide a marketing platform or are purely informational in relation to cannabis products may well be registrable at a federal level. Therefore, an application for a mark with a carefully crafted specification of goods or services excluding cannabis and directly related cannabis goods/services could achieve registration and could be used to enforce the mark against later joining competitors.

Although federal trade mark protection for cannabis goods and services in the US poses a number of difficulties, across the border in Canada the position is very different. On 17th October 2018 Canada became the first G7 country to legalise the purchase and use of recreational cannabis, though subject to tight government regulation. Regulations were published on 11th July 2018 placing restrictions on certain types of marks, for example, prohibited under the Act are marks for cannabis products that consist of a person, character or animal, whether a fictional or real, marks that appeal to children, marks that glamourise the goods or include a testimonial or endorsement. Although Canada has opened the door to trade mark registration for cannabis products, care is still required in the selection and filing of trade marks since the government has clearly signalled that it does intend to control all aspects of promotion and sale of legalised cannabis products.

Since the proposed legalisation of recreational cannabis in Canada was announced, there has been a surge in investment and commercial activity across the market sector particularly in relation to licensed producers of cannabis in Canada. Canadian companies are also looking to extend into other countries overseas as cannabis and its related products have started to gain greater legitimacy and acceptance. This has resulted in a large increase in trade mark filings both in Canada and in the EU. There are currently 14 cannabis trade mark applications under examination/published at the EUIPO filed in the past 10 months, 5 of which have been filed by Canadian companies. In 2018, 12 cannabis marks have been accepted for registration by the EUIPO, 10 of which were filed by Canadian companies, Spectrum Cannabis Canada Ltd and 1977121 Ontario, Inc. and covering a wide range of cannabis related goods and services.

The position in the EU is that there is no harmonised EU law on cannabis, the responsibility being that of each EU member state. EU countries are however bound to control cannabis following their obligations under various United Nations drug control treaties.

Recreational use of cannabis remains illegal in all European Countries although the penalties for use related offences varies widely. Even in the Netherlands, cultivation supply and personal possession of cannabis are all criminal offences. A practice of tolerance has evolved in the concept of “coffee shops”, that is, cannabis sales outlets licenced by the municipality. However, two thirds of municipalities do not allow coffee shops and the remainder is subject to strict regulations.

Some authorised cannabis based medicines have been available in a number of European countries for some time. For example, Sativex, a treatment for multiple sclerosis, which contains extracts of cannabis has been authorised in 17 EU member states. In the UK, the availability of medicinal cannabis hit the headlines this summer when 12 year old Billy Caldwell had the medicinal cannabis oil, used to treat his severe epilepsy, confiscated from his mother at Heathrow airport. This has raised awareness of the availability and use of cannabis as a medicinal product. The government is looking at reclassifying cannabis derived medicines to allow UK doctors to prescribe them. Germany and Denmark have legalised cannabis for medical use whilst a number of European countries including the Netherlands, Italy, Czech Republic and Croatia have agencies governing the production and supply of medical cannabis and regulations as to its cultivation, production, possession and use. The efficacy of cannabis based products in the treatment of a number of medical conditions including multiple sclerosis, cancer, epilepsy and AIDS is now widely accepted and the need for their wider availability gaining momentum.

The EU is also not immune to the growing potential for investment in cannabis based products both in terms of medicinal cannabis and wider consumer products. Consumer products, particularly in the food, drink and wellness industries are now seen by many companies as natural extensions of the cannabis market. Food, drink and cosmetics companies are looking into how the non-psychoactive constituents of the cannabis plant producing relaxant and inflammation reduction effects can be used to enhance products such as sports drinks and skin preparations.

Neither the EUIPO nor UKIPO have a blanket ban on trade mark registrations for cannabis and cannabis related products as in the US nor do they allow easy access to trade mark registrations for cannabis products as in Canada. A trade mark application may receive an objection from the EUIPO or UKIPO on the basis that it is “contrary to public policy or to accepted principles of morality” (Article 7(1)(f) EUTMR and Section 3(3)(a) Trade Marks Act 1994).

“Public policy” is intended to deny protection to marks which could induce public disorder or the likelihood of criminal or other offensive behaviour. This will include marks which appear to have criminal connotations, such as being associated with illegal drugs. The notion of “principles of morality” is somewhat harder to define and of necessity more fluid in assessment but the EUIPO has said that it is something that “must be perceived by the relevant public, or a significant part of it, as going against the basic norms of society”.

Objections raised by the EUIPO or UKIPO under Article 7(1)(f) EUTMR or Section 3(3)(a) apply to the registrability of the marks themselves rather than the legality of the goods or services included in the specification. The question whether the goods or services for which protection is sought can or cannot be legally offered in a particular member state’s market is irrelevant for the question as to whether the sign itself falls foul of Article 7(1)(f) EUTMR (13/09/2005, T-140/02,”INTERTOPS”, Section 33). However, national legislation and practice will inform the assessment of relevant public perception of what is acceptable in terms of public policy and principles of morality.

Marks including the words cannabis, marijuana, weed, hash or other cannabis related or derived words or symbols will be specifically scrutinised. The EUIPO recently accepted applications for the marks “SPEKTRUM CANNABIS” and “SPECTRUM CANNABIS” for a wide variety of cannabis related goods in Classes 3, 5, 9, 16, 18, 25, 29, 30, 31, 32, 34, 35, 41, 42, 44 and 45 including medical cannabis, skin care preparations containing cannabis plant derivatives, food and beverage products containing cannabis, hemp seeds, pipes and vaporizers for administering medical cannabis and various educational, product development and medical, consulting and advisory services relating to cannabis. In relation to the goods accepted for registration, the Office stated that it had decided to partly waive its initial objections where it was satisfied that the goods related to “the legal and common use of cannabis, among others for use in cosmetic preparations, in foodstuff and for medical purposes, where the intention of use are not psychoactive”.

The goods and services to which the Office maintained its objection were live cannabis plants and seeds in class 31, smoking accessories, marijuana, cannabis and derivatives thereof, cannabis capsules and sprays, smoking accessories in class 34, sale of cannabis products and accessories and smoking accessories in class 35 and cultivation, breeding, processing and production of cannabis in class 44. The Office considered these goods contrary to the accepted principles of morality in that the goods and services for which the mark would have been used “would be seen as a reference to drugs of which consumption for recreational purposes is harmful to health and lives of the people (and prohibited in part of the EU)”.

The use of cannabis for recreational purposes continues to be illegal in all member states of the EU and there does not seem to be any strong move to change this. Therefore, for the foreseeable future, cannabis related marks for any goods or services relating primarily to recreational use are likely to be rejected. However, where use of cannabis is not for psychoactive recreational purposes, it seems that the EUIPO will accept arguments that such use in relation to a wide variety of products is not contrary to public policy or to accepted principles of morality. Although cultural attitudes in the UK and many EU countries may be viewed as behind the curve and not as beneficial as in countries such as Canada there is opportunity for companies wishing to trade in cannabis related goods in the EU to obtain substantial trade mark protection.