While a handful of companies have already begun national expansion, federal restrictions on trademarks have been a major roadblock to building brands within the cannabis industry.
Due to marijuana’s classification as a Schedule I narcotic, most businesses have been at an impasse with the United States Patent and Trademark Office (USPTO) regarding national protection of intellectual property.
Cannabis-related businesses have been barred from federal trademark protection not just for being manufacturers and retailers of a controlled substance, but also for having names and logos directly affiliated with the federally illegal plant. But there are signs that the U.S. government is relaxing its rigid stance on all things cannabis.
Industry Milestone
In August of 2015, the USPTO issued the first national trademark to a cannabis-related business. Cannabis Basics founder and CEO Aimee “Ah” Warner acquired a trademark for her company’s logo, which prominently features an unmistakable cannabis leaf overlaid on an oil droplet background.
The Seattle-based health and beauty aid company manufactures both marijuana- and hemp-based products. The trademark provides Cannabis Basics with the same valuable protection that is enjoyed by every household brand across the country.
In many ways, Warner’s victory represents the greater change in the public’s perception of cannabis, but it can also be looked at as a blueprint for how other companies can obtain the same protection.
“The USPTO did not grant me this trademark based on my marijuana line,” Warner says. “They granted it to me based on my hemp line.”
If Cannabis Basics didn’t have hemp-only products, the USPTO never would have granted Warner the trademark, she says. But because she has two distinct product lines, she’s able to protect her products with THC by default.
The Process
Warner started the process by turning to patent lawyer Andrew Olmsted, who acted as the liaison between Cannabis Basics and the USPTO examiner.
Olmsted’s biggest task was proving to the examiner that Cannabis Basics’ hemp-based products were not illegal under the Controlled Substances Act.
Warner says it was vital that the Cannabis Basics website stated clearly that its hemp-only products are sold anywhere, while the products made from cannabis flowers are only available in Washington state.
This distinction was important to relieve the anxiety of the USPTO examiner, Warner says.
As of this writing, the USPTO had not responded to requests for comment.
Olmsted says the unique composition of the Cannabis Basics product line presented new questions for the USPTO during the examination process.
“I was very fortunate our application was assigned to an examiner who was open to education and discussions about the nature of Cannabis Basics’ products,” Olmsted says.
However, it didn’t take long for the examiner to find the first thread to unravel the application. The examiner pointed out that the labels on the products contained the phrase “fertile hempseed oil.” To Warner, “fertile” simply meant that the seeds from which the oil was extracted were never sterilized. She suspects the examiner may have interpreted “fertile” to mean intoxicating.
“The long and short of it was that the USPTO actually upped my game and upped my branding because I took the word ‘fertile’ out and put the word ‘organic’ in,” Warner says. “My hempseed oil is actually organic certified from Canada.”
Warner says Olmsted wasn’t particularly well-versed in Cannabis Basics’ operations, “so it was about me educating him and him educating the examiner.”
For an 18-month stretch, Olmsted and the USPTO went back and forth; the examiner would ask a question, the attorney would provide an answer.
“After a number of discussions and responses to the examiner’s concerns, I was able to ultimately demonstrate that, while the products featured in Cannabis Basics’ application contain cannabis byproducts, they are not illegal under the CSA, and therefore eligible for trademark protection,” Olmsted says.
“I don’t think that there was anything that we could have done that would have made it any easier,” Warner says.
After a year and a half of questions and clarifications, the USPTO finally arrived at the much-anticipated decision.
“In this case they ruled in our favor,” Warner says.
Advice for entrepreneurs
The Cannabis Basics case was the exception to the USPTO’s history of handling somewhat controversial companies.
The important lesson Warner learned was that the trademarked logo wasn’t granted for her products containing THC — it was only by proxy that her THC-infused products were covered by the trademark protection.
“They haven’t given a single product a trademark that has THC,” Warner says.
Warner advises companies looking for similar protection to start by registering a state trademark. Some people initially told her not to bother with an in-state trademark, but Warner believes it sets a precedent that can be beneficial moving forward.
From there, the next step is to get an attorney. Warner says it’s important to find an attorney who specializes in intellectual property, rather than “just any cannabis lawyer.”
“You don’t hire a general doctor if you’ve got a specific issue,” she says. “It’s not general practice; it’s a specialty.”
Olmsted says the do-it-yourself route can be tedious for applicants trying to run a business simultaneously with the examination process. He says mistakes made on the initial application can sometimes be fatal to the chance of acquiring a trademark.
“At a minimum, I recommend people schedule an initial consultation with a trademark attorney before proceeding with the registration process,” he says. “If a potential client still wants to go the DIY route after a consultation, they will be better educated about the examination process and what they may face down the line. It’s a win-win situation.”
Warner’s final piece of advice for those seeking a national trademark is to ensure compliance with both regional cannabis laws and the fundamental business regulations all companies must abide by.
“You have to have your licenses. You have to pay your taxes, all of that stuff,” she says. “Honestly it has nothing specific to do with a cannabis state. It’s just general business. I think sometimes we forget that we’re nothing special. Really, what we’re trying to do is just normalize the cannabis industry. To do that we have to fit into the paradigms that are already in place.”
Groundbreaking legislation
The Cannabis Basics trademark wasn’t the first significant victory for Warner’s company. About two months before receiving the trademark for Cannabis Basics, Warner watched as Washington Governor Jay Inslee signed the Cannabis Health and Beauty Aids (CHABA) bill into law only six months after the legislation was introduced.
Warner co-authored the legislation, which removed non-intoxicating, topically applied products with less than .3% THC that are not meant for human or animal consumption from the state Controlled Substances Act. The law went into effect on July 1, 2015, and allows select Cannabis Basics products to be sold anywhere in Washington state.
It was a major breakthrough more than a decade in the making. A longtime proponent of cannabis-related health and beauty products, Warner started Cannabis Basics in 1995. When Initiative 502 legalized marijuana in Washington in 2012, Warner felt it was time for her more benign — and potentially beneficial — products to make the transition into mainstream stores.
“Our mission at Cannabis Basics is to bring cannabis health and beauty aids back to the hands of health-conscientious consumers,” Warner says. “These types of products have been around forever, and there is no reason why it should be an underground thing.”
Before she could start campaigning for what would later be known as CHABA, Warner says it was imperative to define non-intoxicating cannabis health and beauty aids. In mid-2013, with her definition established, Warner scheduled a meeting with state Sen. Jeanne Kohl-Welles.
“The best part of it was that I went in and she totally got it,” Warner says. “She understood and was more interested in the products than how we were actually going to make this legal. So with her encouragement, I asked Kari Boiter, who’s a cannabis activist and political analyst to help me co-author the legislation.”
The stand-alone bill was sponsored by Kohl-Welles, who brought in the support of Sen. Ann Rivers, giving the bill bipartisan support.
Warner traveled to the state capitol, Olympia, to hand-deliver samples of her products, fact sheets and the proposed legislation to the 152 offices that would ultimately decide if the bill passed or failed.
“This was a profound action, because for me, I really needed them to have the product in their hand, to make sure that they knew what they were going to be ruling on,” Warner says. “I needed them to see how benign it was, that it wasn’t threatening at all, that it was nothing but helpful and nothing but natural.”
Warner had made her rounds to about 30 of the intended offices before being asked by security to stop her lobbying effort, mistaking her actions as delivering marijuana door to door. Warner immediately notified Kohl-Welles about her encounter with security. The following day, she was allowed to resume her canvassing. Of the 152 offices she visited, only one person declined to receive Warner’s samples.
Although Warner and Boiter intended CHABA to be a stand-alone bill, it was eventually bundled together with a bill designed to fix some of the tax problems of I-502.
“I wasn’t happy at the time when they did that,” Warner says. “But it really was their brilliance because they knew that this bill was going to pass, therefore my piece of legislation passed right along with it.”
The CHABA bill successfully removed any non-intoxicating, non-consumable products with less than .3% THC from the state Controlled Substances Act and allowed Warner to transition select Cannabis Basics products into non-cannabis retail stores. Currently, more than half of Warner’s retail partners are mainstream shops, such as the herbalist apothecary Sugar Pill in Seattle.
“Reach out to your legislators and do it in a professional manner and they will listen to you,” Warner says. “They are not always going to agree with you, but they will at least listen to you. If they agree with you then magic happens.”
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