trademark registration

March Madness always brings about trademark enforcement-related news.  What we generally don’t see is news about a participating school submitting trademark applications while the basketball tournament takes place.  But according to numerous articles last week, including this one in the Baltimore Sun, the University of Maryland Baltimore County hadn’t sought trademark registrations prior to securing the first upset of a #16 seed over a #1 seed two weeks ago.  After that historic victory, however, the University asked attorneys to file trademark applications for the phrases “16 over 1,” “UMBC Retrievers,” and “Retriever Nation”—which the Baltimore Sun poignantly characterized as capitalizing on the University’s “skyrocketing commercial cachet.”  Given the immediate increase in university bookstore apparel sales, the University’s quick response to that newfound cachet is more than timely.

Contrast UMBC’s recent trademark enforcement efforts with those of Iowa State University, which we’ve previously covered on this blog.  As a reminder, Iowa State University had refused to continue to license university trademarks to two of its students and their chapter of the National Organization for the Reform of Marijuana Laws because the organization was using the university’s mark on pro-marijuana t-shirts.  That dispute raised issues of the interplay between trademark licensing principles for public universities and students’ First Amendment rights, the latter of which the federal court found was trump.  Last week, in addition to the $150,000 emotional distress damages and $193,000 in legal bills already awarded, the judge approved another $598,208 in attorneys’ fees and costs, bringing the total cost to state taxpayers to almost $1 million.

These quite varying anecdotes serve as a reminder that it isn’t just public and private companies that think and care about trademark enforcement—universities do too, even if they’re late to the party.

A trademark may give a business the right to stop others from using these marks to sell similar goods or services or using marks that may be confusingly similar. However, federal trademark protection is out of reach for hundreds of businesses across the country.

The recent announcement that the DOJ was rescinding the Cole Memo reminded us of the friction that exists between Federal and State laws, at least when it comes to Marijuana. The Cole Memo was seen, by some, to provide a sort of “safe harbor” for businesses in the 29 states and the District of Columbia where marijuana has been legalized in some form. Regardless of the Cole Memo, marijuana remains illegal under Federal law and therefore the USPTO will not register marijuana-related marks.

Consequently, an established marijuana dispensary might not be able to stop a competitor from setting up a shop with the same or similar brand name. Similarly, a grower who wins an award for a newly developed strain might not be able to stop others from selling marijuana under the same name. Inevitably, consumers will be confused. Such confusion may result in loss of goodwill or brand image associated with the name or trademark as well as lost sales.

In order to address this problem, some businesses have sought to obtain federal trademarks on non-marijuana-related goods and services. For example, businesses can still trademark their name or logo for use with clothing, accessories, and other merchandise. The more closely related the good or service is to marijuana sales or use the more likely the future protection if such activity becomes legal at the federal level. This is due to a doctrine known as the zone of natural expansion, which allows a company to use a trademark in a new geographical area or product line when the use in the newly expanded area is a natural extension of the prior use. That is, marijuana sales may naturally extend from the sales of rolling papers or vaporizers. However, such merchandise runs the risk of being considered illegal drug paraphernalia and thus similarly banned from trademark protection. Conversely, a business may obtain a trademark related to the sales of t-shirts or other merchandise but marijuana sales may not naturally extend from such products. Also, in order to maintain the trademark, the business must continually use the mark and have actual sales of such products. If such products are not popular, this could result in the loss of the trademark. Unfortunately, even with these steps, there may not be much protection from others using the trademark strictly for marijuana sales.

Another option is to register the mark for state registration. This may provide protection within a particular state but may not be effective throughout the country. For example, if a business registers a trademark in Oregon, it may not afford protection from the use of the same mark in Washington, California, or Nevada – three bordering states where recreational use is legal. A business could expand protection to those states, but this would require additional registrations and actual use of the mark in each state protection was sought.

The rescinding of the Cole Memo indicates this rift between Federal and State law is not going anywhere soon. As more and more states continue to legalize marijuana and the industry continues to grow, conflicts will arise. It is possible the marijuana industry will be as non-confrontational as its users are known to be, but my bet is the effectiveness of these strategies will soon be tested.

In direct response to the U.S. Supreme Court’s decision striking down the constitutionality of section 2(a) of the Lanham Act, which as enacted barred the registration of disparaging trademarks, there is reason to believe that offensive trademark registration applications are on the rise.

According to Reuters, there were at least nine new applications filed with the U.S. Patent and Trademark Office (“PTO”) between the June 19, 2017 Supreme Court ruling and the end of July 2017.  Such marks include versions of the N-word, a swastika symbol, and other offensive terms/phrases.  For example, Snowflake Enterprises LLC has filed multiple trademark applications for offensive marks, examples of which can be found on the PTO’s website (a version of the N-word can be seen here and a swastika symbol can be seen here). Prior to the Supreme Court’s ruling, it’s likely that the PTO would have outright rejected such filings as they had with similar filings in the past.  But the PTO is now under new guidance—that trademark applicants are protected by the free speech rights guaranteed under the First Amendment to the United States Constitution.  According to Reuters, the PTO told its staff a few days after the June 19 Supreme Court ruling that they could no longer use section 2(a) of the Lanham Act to reject a trademark application for a disparaging trademark.

The full effect of the June 19, 2017 Supreme Court ruling remains to be seen, but the evidence to date suggests that applications for offensive trademarks will increase and that the PTO will be forced to approve them if the marks otherwise qualify for trademark registration.  However, if the applicant does not establish actual use of the offensive mark or does not use the offensive mark as a source identifier, the PTO can still reject the application.  Thus, with the exception of the once-applied disparaging trademark ban, the PTO will continue to apply the same standards to trademark applications as it has in the past.

Prior Above the Fold blog posts explaining the Supreme Court’s June 19, 2017 ruling in more detail can be found here and here.