Monday, July 18, 2016

Precedential No. 21: Marijuana Sale Illegal, TTAB Affirms HERBAL ACCESS Refusal for Retail Services

The Board affirmed a refusal to register the mark HERBAL ACCESS for "retail store services featuring herbs," on the ground that the mark is being used in connection with the sale of a substance (marijuana) that is illegal under federal law. The fact that the provision of a product within a given state may be lawful is irrelevant in connection with federal registration of a trademark or service mark. In re Morgan Brown, 119 USPQ2d 1350 (TTAB 2016) [precedential].

To qualify for federal registration, a mark must be in "lawful" use, and so any goods or services for which the mark is used must not be illegal under federal law. If provision of the product or service is unlawful under federal law, it is irrelevant that use under state law may be lawful.

The USPTO generally presumes that use of an applicant's mark is lawful under federal law. Registration will not be refused unless either:

(1) a violation of federal law is indicated by the application record or other evidence, such as when a court or a federal agency responsible for overseeing activity in which the applicant is involved, and which activity is relevant to its application, has issued a finding of noncompliance under the relevant statute or regulation; or

(2) when the applicant’s application-relevant activities involve a per se violation of a federal law.

Examining Attorney Jeffrey J. Look relied on an asserted per se violation of federal law, namely, the provision of marijuana.

Applicant's specimen of use featured two photographs of his retail store, depicting a green cross [a symbol of the organized medical marijuana industry] on the door and on the window. His website displayed a map with the wording "Marijuana for the Masses," and depicted a marijuana plant with the text: "Call or stop by today and find out why people consider our marijuana to be the best of the best!" This evidence supported the conclusion that applicant "is engaged in the provision of marijuana via the retail services provided at the facility shown in the specimen and advertised on the website." [Doh! - ed.].

Thus applicant's services include the provision of an illegal substance in violation of the federal Controlled Substances Act (CSA), 21 USC Sections 812, 841(a)(1), and 844(a), and constitute a per se violation of federal law. Use of applicant's mark therefore includes unlawful activity under the CSA.

Applicant Brown argued that he is seeking to register his mark for the sale of herbs, not for marijuana, and that the sale of herbs is not illegal. The Board, however, observed that "[t]he mere fact that lawful use is also contemplated by the identification does not aid Applicant's cause." According to the Board, "it was entirely proper for the Trademark Examining Attorney to look to evidence such as the Applicant's specimen of use and website to ascertain that the word 'herbs' in the description of services encompasses marijuana."

Applicant Brown did not address or directly rebut the evidence that marijuana is an herb or that he sells marijuana, but he instead feebly argued that the evidence did not show the use of the mark specifically in connection with one particular herb: marijuana. However, the CAFC has rejected attempts to avoid a refusal "where a particular good or service falls within the generalized identification and the evidence shows that applicant's actual usage involves the specific good or service that is the subject of the refusal."

The Board concluded that, because the subject mark is being used in connection with the sale of a specific substance that falls within both the recitation of services and the prohibitions of the CSA, Applicant Brown's services include the sale of a good that is illegal under federal law, and therefore encompasses a use that is unlawful.

And so the Board affirmed the refusal.

Read comments and post your comment here.

TTABlog comment: Is this a WYHA? Matthew Swyers represented applicant.

Text Copyright John L. Welch 2016.


At 9:58 AM, Anonymous Anonymous said...

Set aside the issues of whether marijuana legalization is a good idea or a bad idea I simply do not understand what the basis is for the federal government to ignore the federal laws on marijuana? I don't get how they can just decide not to enforce a law.

At 10:15 AM, Anonymous Anonymous said...

Maybe the applicant will appeal on the ground that the refusal is unconstitutional restriction of the applicant's freedom of speech. As crazy as this sounds, the argument worked once already in front of the Federal Circuit.

At 10:34 AM, Anonymous Anonymous said...

So then a lot of 1(a) apps hitting TEAS when the Feds pass legislation legalizing marijuana use.

At 12:47 PM, Anonymous Anonymous said...

Anyone have thoughts on how this might have played out if the applicant's services were something like providing information about herbs? Would applicant still not be entitled to registration because it engages in a federally unlawful use -- the retail sale of medical marijuana -- even if the actual services identified in the application were not unlawful?

At 1:19 PM, Anonymous Anonymous said...

If the USPTO is going to be consistent then they need to do apply the same rule to Alcohol too.

It is illegal to sell Alcohol unless you meet label approval requirements, but the USPTO approves specimens of use that have never been approved even when it is has been shown that the sale was not legal.

See Churchill Cellars, Inc. v. Brian Graham, Opposition No. 91193930 (October 19, 2012) [not precedential].

TTABlog here:

At 1:51 PM, Anonymous Anonymous said...

Any count on how many precedential decisions Mr. Swyers has been responsible for?

At 2:13 PM, Anonymous Anonymous said...

Well, this is a better justification for applying for state trademark protection than many others I have seen. Banking isn't the only field where the disparity between federal and state laws on marijuana are causing difficulties for the state-approved marijuana industry.

At 4:32 PM, Anonymous Anonymous said...

This seems like a legitimate "test" case that many trademark attorneys would bring. Yes, I think the TTAB decision that was issued had to be expected. And the way the Fed. Circ. has been more liberal and looser than the 9th Circ. in some of its interpretations these days, I could see it forcing the issue for Congress to deal with this persistent conflict between certain states' laws and the federal law.

At 5:23 PM, Anonymous Anonymous said...

Better question is.. how many WYHAs has MS been responsible for?

At 5:18 PM, Blogger Chris McElwain said...

If this was just a specimen rejection, I would have less sympathy for the applicant or his attorney, since it doesn't look like the specimens actually showed use in commerce in connection with legal herbs.

But this decision wasn't inevitable based on Section 1 and 45, even if you accept the Board's idiosyncratic interpretation of the Lanham Act and Federal Court precedent (Gray v. Daffy Dan's does not stand for the proposition Examiners consistently pretend it does). Yes, we've known for a while that the Board would affirm refusals to register any mark in connection with cannabis or retail cannabis services. However, the statement in this opinion that " any goods or services for which the mark is used must not be illegal under federal law" is startling.

That has never been the law. In re Midwest Tennis doesn't say that. Clorox v. Armour-dial doesn't say that. All we knew previously was that registration had to be supported by "use in commerce [that also complies with all federal laws]." This decision affirmatively tasks USPTO Examiners with denying trademark rights to any applicant they believe might be doing something illegal, whether or not they are also using the mark legally in commerce, which strikes me as a crazy expansion of the department's statutory mandate.


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