By Michael S. Dorsi
This morning, the U.S. Supreme Court announced its decision in Icanu v. Brunetti, holding that the First Amendment compels invalidation of the provision of the Lanham Act that instructed the United States Patent and Trademark Office to deny registration of any “immoral” or “scandalous” marks. As a result, Brunetti can register his trademark: FUCT. This was not a surprise. When the U.S. Supreme Court grants certiorari on a free speech question, the speaker usually wins, and the government usually loses. Two terms ago, the Court struck down a similar provision of the Lanham Act concerning disparaging marks, compelling the PTO to register the mark for the applicant’s band’s name, THE SLANTS. During oral argument for that case, multiple justices were critical of the PTO’s inconsistent application of the rule against immoral or scandalous trademarks.
If the PTO must register the mark for the name of a rock band despite a potentially disparaging name and a potentially vulgar mark suggestive of a sex act, must it also issue marks for federally illegal drugs? I wondered if that would be the next case. But Justice Kagan, perhaps thinking a step ahead, explained the following in the Opinion of the Court:
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- The PTO rejected marks conveying approval of drug use (YOU CAN’T SPELL HEALTHCARE WITHOUT THC for pain-relief medication, MARIJUANA COLA and KO KANE for beverages) because it is scandalous to “inappropriately glamoriz[e] drug abuse.” [citations]. But at the same time, the PTO registered marks with such sayings as D.A.R.E. TO RESIST DRUGS AND VIOLENCE and SAY NO TO DRUGS—REALITY IS THE BEST TRIP IN LIFE. [citations]. Similarly, the PTO disapproved registration for the mark BONG HITS 4 JESUS because it “suggests that people should engage in an illegal activity [in connection with]worship” and because “Christians would be morally out-raged by a statement that connects Jesus Christ with illegal drug use.” [citation].
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Iancu v. Brunetti, No. 18-302 (U.S. Jun. 24, 2019), Slip. Op. at pp. 6–7.
That’s cute, but it avoids commenting on the more pressing question for drug-related trademarks: can the PTO deny registration because the applicant’s use in commerce was not lawful. This is not just a question for underground market sales. Many cannabis industry businesses are eager to know the answer. Marijuana and cannabinoids are legal, at least for medical use, in 33 states, 4 of the 5 populated U.S. territories, and the District of Columbia. Although the Controlled Substances Act still lists marijuana and cannabinoids as Schedule I drugs, the Rohrabacher–Farr amendment prohibits the Justice Department from spending appropriated funds prosecuting medical marijuana activity consistent with state law.
Presently, this industry cannot obtain trademarks because the PTO follows a rule refusing to register marks when the use in commerce is unlawful. See, e.g., In Re Pharmacann LLC, 123 U.S.P.Q.2d 1122 (T.T.A.B. 2017 (rejecting application for retail cannabis store), In Re JJ206, LLC, DBA Juju Joints, 120 U.S.P.Q.2d 1568 (T.T.A.B. 2016) (rejecting application for single-use cannabis vape devices), In Re Morgan Brown, 119 U.S.P.Q.2d 1350, *4 (T.T.A.B. 2016 (rejecting application when applicant contemplated selling marijuana and other herbs); see also General Mills, Inc. v. Health Valley Foods, 24 U.S.P.Q.2d 1270, 1274 (T.T.A.B. 1992 (“some unlawful uses are of such a nature (e.g., use of a mark in connection with an illegal drug) that it would be unthinkable to register a mark”).
With the PTO reversed twice in its last two trips to the Supreme Court, one might wonder if success for applicants seeking disparaging or scandalous marks is a good sign for applicants seeking trademark registrations related to the sale of cannabis. As a matter of doctrine, Tam and Brunetti do not lend much support. But two broader trends in Federal Circuit and U.S. Supreme Court cases may help cannabis business applicants.
First, as was evident in the oral argument and written opinion in Brunetti, the Justices are not happy with the PTO’s inconsistent application of restrictions on trademarks. Even if the case turns on a different question of law, skepticism toward the government is an advantage for the challenger.
Second, the trend in statutory interpretation over the past few decades has been to focus on text over purpose, and the PTO’s position is vulnerable to a challenge based on the text of the statute. The relevant section of the Lanham Act permits registration of marks based on “use in commerce,” which the PTO interprets to mean “lawful use in commerce.” But the term lawful does not appear in that section, and other sections do specifically include and refer to “lawful use in commerce.” If Congress meant to constrain registrations to lawful use in commerce, it could have done so. Instead it referred just to use in commerce. The relevant statute, 15 U.S.C. § 1127 says that “commerce” means what may lawfully be regulated by Congress. There is no doubt that Congress can regulate marijuana. Gonzales v. Raich, 545 U.S. 1 (2005) (concluding that marijuana is subject to federal regulation).
Wait — could Congress have really meant for the Lanham Act to allow registration for marks used unlawfully in commerce like illegal drugs? If that sounds like a tough sell, then it might be time for a challenger to look for a better vehicle. How about a more ordinary legal drug or dietary supplement?
That case came before the Ninth Circuit Court of Appeals in the case of CreAgri, Inc. v. USANA Health Sciences, Inc., 474 F.3d 626 (9th Cir. 2007). The District Court had cancelled CreAgri’s mark OLIVENOL on the grounds that because of improper labeling of the dietary supplement, CreAgri had not used the mark lawfully in commerce. The Ninth Circuit affirmed, and CredAgri did not seek review by the Supreme Court. Perhaps it should have. The result seems harsh: cancellation of a trademark based on a labeling violation requiring no wrongful intent.
Taking a commercial cannabis trademark case to the Supreme Court may seem unreasonably risky. But finding a case like CreAgri and making it into a test case — that might give the Supreme Court the opportunity to reverse the PTO for a third time after THE SLANTS and FUCT, checking the boxes for all three of sex, drugs, and rock ‘n’ roll.