Effective October 1, 2020, the Maryland Secretary of State will include cannabis products and cannabis services among those entitled to Maryland trademark and service mark registration. The Maryland General Assembly passed legislation this year to create this expansion. Federal trademark protection under the Lanham Act is still prohibited for cannabis, so what does this mean for Maryland medical cannabis businesses?
Trademark registration is not required to enable a cannabis company to sue for trademark infringement under Maryland law. By using a mark, name, or design in commerce, the owner of the mark is entitled to pursue a claim for infringement against anyone who uses the mark after the original owner if it is likely to create confusion in consumers. The benefit of registration is that the mark holder has affirmative evidence of the date the mark was registered and used. In a common law trademark case, the plaintiff would need to establish that it was the initial user of the mark, which may be difficult, and result in expensive discovery. With the rapidly expanding medical cannabis industry in Maryland, new products and services hit the market every day. Being able to affirmatively prove that the mark holder was the first to use the mark in commerce gives the mark holder a distinct advantage.
To that same end, the holder of a state-registered trademark in Maryland would have easier recourse against another cannabis company in state. For example, if a dispensary in Garrett County were using the same trademark as a dispensary in Somerset County, the two might have a hard time establishing that there was any consumer confusion between the products that are on opposite ends of the state. However, a holder of a state-registered trademark would have grounds to enforce the trademark throughout the state to protect the integrity of the brand.
One of the major benefits of Lanham Act protection is that a mark holder can recover treble damages and attorney’s fees under the statute. 15 U.S.C. §1117. Maryland’s Trademark Act has no such provisions. Under the Maryland Trademark Act, (Md. Code Ann., Bus. Reg. §1-401 et seq.) a registrant is permitted to recover their lost profits and the profits from a defendant who used a registered mark with intent to confuse or deceive. Md. Code Ann., Bus. Reg. §1-414(b). Unfortunately, these damages are the extent of the added protections afforded to cannabis mark holders in Maryland.
A search of trade and service marks under Maryland’s Trademark Act reveals that several medical cannabis operators applied for registered trademark in Maryland as early as 2017. The affirmative inclusion of cannabis products and services provides medical cannabis operators the assurance that their marks will be afforded the same protections as any other product under the Trademark Act. With the inexpensive cost to register ($50 per mark), registration of cannabis trademarks and service marks is an affordable solution to protect Maryland cannabis businesses.
The author, Justin Tepe, represents medical cannabis licensees and ancillary businesses as outside general counsel ranging from regulatory guidance and employment law to commercial litigation. If you have questions on how to protect your intellectual property, contact Justin at jtepe@gdldlaw.com.
