POT-DELIVERY MAN HITS SPEED BUMPS

A new state regulation decriminalizing pot possession, combined with
California's almost 15-year-old medical-marijuana law, means weed is
almost legal in the state.

That doesn't necessarily make it easier to run a pot-related
business, as Mario Abad has learned over the past six months.

Mr. Abad, 48 years old, is the proprietor of the Canny Bus, a
nonprofit pot delivery service based in San Francisco that delivers
marijuana to the homes of patients whose doctors recommend it for
medical reasons. Since last spring, Mr. Abad has tried to make his
pot business more like a traditional company-but has repeatedly run
into legal obstacles.

His difficulties partly spring from the differing rules around pot at
a state and federal level. Despite California's leniency-the state
this month put into effect a regulation that no longer considers it a
criminal offense to possess small amounts of marijuana-any pot sales
remain illegal under federal law. The Justice Department has signaled
that it generally won't prosecute people who are in compliance with
state marijuana laws.

But as a result of the federal regulations, Mr. Abad was recently
turned down by the U.S. Patent and Trade Office in an attempt to
trademark his Canny Bus logo. He also paid a lawyer to spar with auto
maker Volkswagen Group of America Inc.-which didn't like the logo
because it looked like their trademarked "Microbus"-but caved in last
month after the patent office rejected him.

"You do everything you're supposed to do under state law, and then
the feds pop up," says Mr. Abad, a former tech industry worker who
says he is barely making a living with his small delivery operation.
Volkswagen, he adds, "wanted me to destroy pretty much everything" in
his marketing materials that looked like a Volkswagen van.

A lawyer for the Volkswagen AG unit declined to comment. A
spokeswoman added that while it is common for the company to spot
other businesses that it believes are infringing on its trademarks,
most of them don't sell marijuana. A spokeswoman for the patent
office referred to documents in the case denying the trademark application.

Mr. Abad's problems began last year when he started delivering pot to
about eight patients around the Bay Area, selling different varieties
of weed like Purple Kush and 3X Crazy for $45 or $50 for one-eighth
of an ounce.

Before he began operating last spring, Mr. Abad tried to make the
Canny Bus more like a legitimate enterprise and less like an
illicit-drug operation to cut down his own legal risk and make
clients feel comfortable.

So last year, Mr. Abad launched a website with professionally
photographed models exhorting people to "break free with the benefits
of medical marijuana!" and touting the advantages of using his
delivery service. The site explains the differences between various
marijuana strains and lists the company's bylaws.

Mr. Abad also bought a carcass of an old Volkswagen microbus-the
stereotypical stoner vehicle-to use in marketing promotions, and
hired an artist to craft a logo depicting a vehicle similar to the
bus with a cannabis leaf prominently displayed on the front. He filed
paperwork last February with the patent office to trademark the image.

Mr. Abad was initially hopeful: Two months after filing his trademark
application, the patent office created a new category for "processed
plant matter for medicinal purposes, namely medical marijuana."

In July, the Canny Bus logo appeared with a page one article in The
Wall Street Journal about the patent-office's pot category. The
patent office said the marijuana-business classification was a
mistake, since pot is illegal under federal law. Then, Volkswagen's
law firm sent a letter to Mr. Abad.

Volkswagen has a trademark for the microbus, wrote Jason Eves, a
lawyer with Howard, Phillips & Andersen in Salt Lake City. "It has
come to VW's attention that you are using the VW Marks to advertise
your goods and services without VW's authorization," he continued.
The letter asked Mr. Abad to sign an agreement to cease using the logo.

Mr. Abad balked. "I don't have to agree with VW's decision to come
after a nonprofit that helps the terminally ill. Redoing the logo
cost me $1,000. This should have gone to a cancer patent," he wrote
in an emailed response to Volkswagen's law firm. The logo, Mr. Abad
continued, "was a good thing for VW as it brings back the memories of the 60s."

Mr. Abad's lawyer, Lara Peason of Incline Village, Nev., says
Volkswagen was being unfair in arguing that the pot business was
infringing on the car company's trademarks.

Volkswagen didn't back down, and continued to say it would pursue
legal action against Mr. Abad unless he signed an agreement to stop infringing.

He resisted until last month, when Ms. Pearson got a disappointing
note from the patent office. "Refusal," the letter said. The
trademark is "not in lawful use in commerce" because it was for
"marijuana-related services."

Now, Mr. Abad says, he is using a logo that looks more "like a
Greyhound bus." But not too much-his artist made an effort to give it
a generic look.