As the prospect of federal rescheduling of cannabis looms, some in the industry are seemingly attempting to preserve their spot in line at the United States Patent and Trademark Office.  A recent Trademark Trial and Appeal Board (the “Board”) decision underscores a significant hurdle for cannabis related applications—use in interstate commerce.  In Allright Mind Enterprises Ltd. v. Creative Arts By Calloway, LLC, the Board dismissed a cannabis company’s opposition because the company lacked a bona fide intent to use its mark in commerce.  Opp. No. 91273573 (TTAB 2024).  The case could affect cannabis companies’ ability to obtain trademark rights at the federal level.

Creative Arts by Calloway, LLC (“Calloway”) applied to register the mark REEFER MAN for educational services and smoker’s articles.  Allright Mind Enterprises Ltd. (“Allright”) opposed the application alleging a likelihood of confusion with its applied for REEFERMAN GENETICS mark.  Allright relied on its two intent-to-use based applications, which covered plant nutrients and supplements for the production of cannabis as well as corresponding retail services.  One application also included retail services for goods unrelated to cannabis. 

One of the requirements for trademark registration is that the applied-for mark must have been used in U.S. commerce or that the applicant have a bona fide intent-to-use the mark in U.S. commerce.  The Controlled Substances Act, 21 U.S.C. §§ 801-971 (“CSA”), bans the sale of marijuana in the United States.  So, those providing cannabis related goods and services may not be able to provide their offerings in lawful commerce or have a bona fide intent to do so.

Calloway argued that the opposition should be dismissed because Allright lacked the requisite bona fide intent to use its mark in commerce.  Specifically, Calloway alleged that Allright had only used its mark in connection with cannabis products outside the United States and that such goods are banned under the CSA.  Calloway also noted that Allright provided no documentary or testimony evidence supporting Allright’s intent to use its mark for any non-cannabis goods or services.

Allright did not rebut the allegations.  Instead, Allright alleged that it would not ship to countries where its products are unlawful.  Further, Allright’s interrogatory responses noted that it was reviewing all the relevant and changing U.S. laws and regulations surrounding cannabis, and that Allright had sold clothing and herb grinders to U.S. consumers. 

The Board saw through the smoke of Allright’s allegations.  The Board noted that a party’s own interrogatory responses are generally considered weak evidence by themselves.  Without corroborating evidence, Allright’s statements in its interrogatory responses were provided little weight.  Further, the record did not establish that Allright has ever sold anything other than cannabis related goods or any of the facially lawful goods and services included in the applications (e.g., retail services for clothing) in its home country of Canada. 

The Board stated that the record established Allright’s “intent to reserve rights in its mark, so that it would remain at the front of the line to register if the U.S. government ever changes the CSA to permit sales of cannabis and other products that currently are unlawful under the CSA.”

Accordingly, the Board held that Allright lacked the necessary objective intent to use its mark in commerce.  Therefore, the Board deemed Allright’s applications invalid.  Without the applications, Allright could not establish priority and the opposition was dismissed.

Those in the cannabis industry often seek to register their marks for facially lawful goods and services.  These may include clothing, smoking articles not used with cannabis, retail services for providing such goods, and providing information in the field of cannabis.  Obtaining registrations for ancillary offerings may allow for a cannabis company to successfully shut down a competitor. 

However, this case casts doubt on a cannabis company’s ability to successfully register marks for ancillary offerings.  A bona fide intent to use a mark in lawful commerce may not be established if an applicant solely provides cannabis offerings prohibited by the CSA.  We will keep our eyes out for updates on this sticky issue.