The Growing Importance of State Trademarks

A trademark is a type of intellectual property consisting of a word, phrase, logo, sound, or smell that identifies the source of ownership of goods and/or services. Obtaining a federal trademark provides the trademark owner the exclusive right to use the trademark nationwide and allows the owner to pursue an infringement action against others for using an identical or confusingly similar mark. Obtaining a state trademark affords an owner a similar form of limited protection; however, the owner only has the exclusive right to use the trademark within the state she registers.

Why Seek Registration of a State Trademark?

Individuals or businesses often seek registration of a state trademark when they do not plan on engaging in interstate commerce and plan on only doing business within their state and have no intentions of expanding beyond their state’s borders. It is important to note that some state-based operations can still engage in interstate commerce, depending on the particular goods and services and how they are offered. Additionally, the filing fee and complexity in applying for a state trademark are generally significantly lower than applying for a federal trademark, with state trademark filing fees typically ranging from $50 to $75 per class of goods or services, as opposed to federal trademark filing fees ranging from $250 to $350 per class.

Certain individuals or businesses may also seek registration of a state trademark if the goods or services identified are considered illegal at the federal level, but legal at the state level: a prime example being cannabis. According to the federal Controlled Substances Act (“CSA”), “marihuana” is federally illegal and defined as “all parts of the plant Cannabis sativa L., whether growing or not; the seeds thereof; the resin extracted from any part of such plant; and every compound, manufacture, salt, derivative, mixture, or preparation of such plant, its seeds or resin.” 21 U.S.C. § 802(16) (definition of “marihuana” – commonly referred to as “marijuana”). Thus, the United States Patent and Trademark Office (“USPTO”) currently prohibits registration of federal trademarks for cannabis goods or services. Ancillary services that support the cannabis industry but that do not have any interaction with the plant, or ancillary goods that have alternative uses (such as a lighter), remain eligible. 

In contrast, numerous states that have legalized adult-use and/or medical cannabis, allow for individuals and businesses to register their state trademarks for cannabis-related goods or services with their respective state offices.

How to Register a State Trademark?

Individuals or businesses seeking to register a state trademark most often do so with their respective Secretary of State. The USPTO offers a comprehensive, state-by-state list of state trademark information links for applicants seeking registration at the state level. 

For example, if an individual or business is seeking to register a trademark for cannabis-related goods or services in California (note: adult-use and medical marijuana are legal in California), this applicant can follow the state trademark information link provided by the USPTO or simply access the California Secretary of State’s bizfile California portal. Once the applicant accesses said portal, the applicant can electronically file and submit her trademark application for a filing fee of $70.00 per class of goods or services; however, it is strongly recommended to perform a preliminary clearance search to help determine whether a bar to registration from a similar mark may apply. Trademark searches prior to adoption of a trademark are critically important because commencing use on an identical, or confusingly similar trademark, could lead to getting sued for trademark infringement, a lawsuit that, on average, costs about $375,000.00 to defend. 

When filing for the trademark with the California Secretary of State, the applicant must provide certain information including, but not limited to, the following: 

  • the applicant’s name and address;
  • the applicant’s business structure;
  • authorized representative information or a “declaration of ownership” of the trademark; 
  • the exact words for a word-mark or a briefly written description for a design mark; 
  • a “drawing page” that shows a visual representation of the applied-for trademark;
  • the dates of the trademark’s first use (date the trademark was first used anywhere, and date the trademark was first used in California); 
  • a listing of the goods and/or services the applicant provides, along with the number of the corresponding classification codes for a fee of $70 per classification; 
  • whether the applied-for trademark has been filed with the USPTO; 
  • the manner in which the applied-for trademark is used in California commerce, along with corresponding specimens showing the trademark in such use; 
  • the applicant’s declaration of accuracy and signature regarding the application for registration; and 
  • the applicant’s payment information.

If the applicant’s registration meets California’s statutory compliance, the filing date will be considered the date of submission. This is significant as the filing date will carry weight in court should the applicant have to defend her trademark against accusations that she has infringed on someone else’s trademark or to stop others from using her trademark or a confusingly similar trademark. Additionally, registration serves as a notification that the registrant owns and uses the trademark, which becomes a matter of public record, searchable by others. 

Unlike a federally registered trademark, if the applicant successfully registers her state trademark, the registration does not convey the right to use the ® symbol. Instead, the registration of the state trademark only conveys the right to use the ™ symbol. State trademark owners may pursue state law claims of trademark infringement, unfair competition, or other permissible state law claims, but will not be able to pursue a claim of federal trademark infringement under the Lanham Act. 

Conclusion

Registering a state trademark can afford the trademark owner protection against potential intrastate infringers and can provide a basis for preventing junior users of the same or a confusingly similar mark within state boundaries. Moreover, filing for a state trademark is typically much less expensive than filing for a federal trademark, and filing for a state trademark is a beneficial approach under certain circumstances, such as when an individual or business intends on conducting only intrastate business and/or seeks registration covering goods or services that are federally illegal, but are legal at the state level. 

Paul Stevenson is an associate attorney with Ritter Spencer PLLC who practices trademark law and represents clients in all facets of the cannabis and hemp industries, including dispensaries, growers, processors, manufacturers, retailers, and more.

Blog Disclaimer: This blog is for informational purposes only, and we are not providing legal guidance, so please consult with an attorney for specific legal advice

Ritter Spencer, PLLCThe Growing Importance of State Trademarks

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