This is the sixth of 13 posts describing the impacts of marijuana’s rescheduling. An homage to Phish’s historic run at Madison Square Garden in the Summer of 2017, Budding Trends Baker’s Dozen will address how rescheduling affects various areas of the law and our daily lives. Enjoy the run.
When the acting attorney general moved state-licensed medical marijuana and FDA-approved marijuana-containing products from Schedule I to Schedule III, the headlines focused on banking, taxation, and what the change might mean for operators day to day. But one consequential — and underreported — area of impact is intellectual property. For cannabis businesses that have spent years locked out of the federal IP system, rescheduling opens some doors. The catch? Not all of them, not for everyone, and not without careful navigation. Here’s a practical breakdown of what the Schedule III change actually means for medical marijuana operators at the USPTO — and where the obstacles remain.
Trademarks
This is where the Schedule III change has the most immediate — but still limited — impact. The USPTO has historically refused federal trademark registration for marijuana-related goods and services on two grounds: (1) the mark would be used in connection with goods or services that are unlawful under federal law, and (2) the specimen of use shows the mark being used in commerce that — until just recently — violated the Controlled Substances Act.
Following rescheduling, the analysis shifts — but only partially. For state-licensed medical marijuana operators, the lawful use barrier arguably falls away. If your products are now Schedule III and you are operating under a valid state medical marijuana license with DEA registration, you have a strong argument that your use in commerce is federally lawful, satisfying the USPTO’s lawful use requirement.
However, adult use/recreational marijuana operators are still out of luck on this front. Their products remain Schedule I, and the USPTO’s lawful use requirement means federal trademark registration remains unavailable until further notice.
There are also important practical wrinkles even for medical marijuana operators. The USPTO examines applications based on the goods and services identified in the application. If your identification of goods references marijuana products in a way that could encompass recreational use, expect a refusal. Drafting around this will require careful thought and precision.
The Residual Problem: Interstate Commerce
Federal trademark registration requires use in interstate commerce. Marijuana businesses have historically had difficulty establishing lawful interstate commerce given the patchwork of state laws. Rescheduling helps at the federal level, but the state-by-state nature of medical marijuana licensing means that true interstate commerce in marijuana products remains practically complicated even post-rescheduling. We hope to have clearer guidance on the permissibility of interstate marijuana commerce soon, but at present there is not a strong consensus in the small, but growing, marijuana legal community.
Patents
Patents are perhaps the most interesting IP vehicle for cannabis operators post-rescheduling. The USPTO has never categorically refused patent protection for cannabis-related inventions the way it has for trademarks. The lawful use requirement that dogs trademark applicants doesn’t apply in the patent context. Patents protect inventions, not commercial use in commerce.
As a result, marijuana patents — covering things like cultivation methods, extraction processes, formulations, delivery mechanisms, and genetics — have been quietly issued for years, even while marijuana was Schedule I. Rescheduling doesn’t dramatically change the patent landscape, but it does make it easier for Schedule III operators to enforce those patents in federal court without running into the same illegality defenses that have complicated prior litigation.
Copyrights
Copyright protection arises automatically upon creation of an original work and doesn’t require federal registration or a lawful use analysis in the same way trademarks do. Marijuana businesses have always been able to protect their creative works — logos, website content, marketing materials, artistic works — through copyright. Rescheduling doesn’t change this much, though it may make federal copyright infringement litigation more straightforward for most of the same reasons as in the patent context.
Trade Secrets
Similarly, trade secret protection under the Defend Trade Secrets Act has always been theoretically available to marijuana businesses. Rescheduling may make federal court enforcement more accessible and less fraught with illegality arguments.
The Bigger Picture
What rescheduling really does for IP is remove one significant obstacle — the federal illegality bar for trademark registration — for a specific subset of operators. But it doesn’t create a seamless federal IP framework for the cannabis industry overnight. Several open questions remain.
The USPTO will need to update its examination guidelines to address Schedule III cannabis products. How examiners will treat applications that straddle medical and potentially recreational uses will require clarification. And the intersection of DEA registration requirements with trademark use in commerce will need to be worked out in practice.
For medical marijuana operators specifically, the smart move right now is to work with experienced IP counsel (including the very good ones at Bradley!) to get trademark applications on file as quickly as possible for goods and services that clearly fall within the Schedule III framework. The early filers will have priority dates that could prove extremely valuable as the legal landscape continues to evolve.
The IP opportunities created by rescheduling are real, but navigating them will still require careful, experienced guidance. We’ll keep watching this space on Budding Trends.