Businesses rely upon their trademarks to distinguish their goods and services from their competitors. Whether a consumer is looking to buy a hamburger, purchase a pair of shoes, or just order their favorite brand of beer, they quickly and easily identify what they want by the brand’s trademark. This concept naturally extends to the cannabis industry as well. Today consumers regularly distinguish between legal dispensaries, cultivators, vaporizers, rolling papers, and even mobile apps based upon providers’ respective trademarks. As such, in the multi-billion dollar U.S. market, cannabis-related businesses have a growing need to protect their trademarks to ensure that consumers can identify and purchase their particular goods and services and not those provided by a competitor.
Types of Trademark Protection
Trademark owners can establish their trademark rights in the following three ways:
- Use: By using the trademark in connection with a good or service in commerce. This creates what is known as common-law rights.
- Federal Registration: By registering the trademark with the United States Patent and Trademark Office (“USPTO”) when the trademark affects ‘interstate’ commerce. This is known as a federal trademark.
- State Registration: By registering the trademark with a state trademark registry creating a state trademark.
Registering a trademark with the USPTO creates the broadest rights as it provides your trademark protection in all 50 U.S. states and territories. However, because marijuana is a Schedule I controlled substance under federal law and because the USPTO will not register a trademark if the applicant cannot show lawful use of the trademark in commerce, it is difficult, if not impossible, to secure federal registration for a marijuana-related mark.
Done correctly, however, you can obtain registration for ancillary products that do not contain or facilitate the use of controlled substances. For example, if you produce marijuana-infused soaps and you produce soaps that do not contain marijuana you can secure a trademark registration that will pertain to the non-infused soaps to give you some protection for your trademark on highly related goods.
Perhaps the best way to protect your trademarks for cannabis-related goods is to register trademarks in the states that have legalized marijuana. Most states that have legalized marijuana now permit state trademarks to be registered for cannabis products. Although protection is limited to the state in which the registration applies, state registration nevertheless gives you the exclusive right to use that trademark in the state in which it is registered and, specifically, in connection with your actual cannabis goods or services. As such, if you can’t secure a federal trademark that protects your brand in all 50 states don’t worry, just go directly to the states and secure your trademarks there.
State registered trademarks offer more protection to brand owners than common law, and marijuana brand owners would be wise to register for state trademarks after doing a trademark search in the state to ensure that their brand will not infringe on any other trademark already in use. The threshold for state trademark registration is low and scrutiny light, if it’s there at all. Note, however, that each state is different and some states, for example Nevada, have enacted legislation or guidelines that govern the marketing and branding of marijuana products and services. As such, before filing a state trademark application to register a marijuana trademark it is important to make sure the trademark complies with other state regulations and guidelines. Additionally, almost all states require that for registration the trademark is being actively used in their state.
Of note, state registration in California is currently in limbo. A quark in California’s registration system ties the acceptable goods an applicant can use for their trademark to the list produced by the USPTO. This, in turn, impedes state trademarks from being registered as there are no cannabis-related goods on the federal registration list. Don’t worry. Help is on the way. California Assembly Bill 64 (A.B. 64), the Control, Regulate and Tax Cannabis Act of 2016, looks to change this and allow a certificate of registration that is issued on or after January 1, 2018 for trademarks related to medical and non-medical cannabis goods and services that are lawfully in commerce under state law in California.
Marijuana trademarks can be protected. Protections are available through the federal and state registration systems as well as at common law. With the potential for a $40 billion market by 2025 marijuana brands will gain extraordinary value and a decisive competitive advantage for their owners provided they are properly protected. As such, cannabis entrepreneurs should immediately begin steps to register their trademarks. Given the current and rapidly changing regulatory landscape here is a great plan to begin securing those lucrative trademark rights:
Step 1: Conduct a Comprehensive Trademark Clearance Search: Have an experienced company perform a comprehensive trademark clearance search for your trademarks. Because of the state of trademark protection and the law, the search should include (A) the USPTO federal database for any ancillary goods (i.e., goods you may wish to register for your brand that do not contain cannabis [See “soap” above]), (B) the state trademark databases as they may contain trademarks already registered for cannabis products, and (C) common law databases to determine whether use by another is occurring but has simply yet to be applied-for at any state or federal level. To learn more about comprehensive trademark searches to check your marijuana brands’ availability Click Here.
Step 2: File for State Trademarks: File to protect your cannabis brands as state trademarks in those states (A) that have legalized marijuana and (B) in which you are using the same. This is arguably the strongest protection you can secure for your actual cannabis brands given the current legal landscape and a critical component in your long-term brand protection strategy. To contact us about filing for State Trademarks for your marijuana brands Click Here.
Step 3: File for Federal Trademarks: File to protect your related goods that you use your trademark on or that you could reasonably intend to use them on in the future. For instance, if you use your trademark both for cannabis-infused soaps but also just plain soaps file for protection in connection with soaps. Or, another example would be to file to protect your marijuana’s brand name for use in connection with clothing should you ever intend to use the same in connection with t-shirts or otherwise in the future. Again, this will give you some indirect protection of the brand potentially giving you a leg up in securing the full rights at the federal level should marijuana ever been legalized on a federal level. To learn more about filing for a federal trademark Click Here.
Step 4: Monitor and Enforce your Trademarks: Monitoring and enforcement is critical in an industry in which discerning marijuana users actively seek specific name brands for their consumption. Properly monitored, you will be notified if anyone begins use of your trademarks without your consent on competing products so that you can force them to stop through enforcement efforts. Left unchecked, trademark infringement in this industry could lead to consumers thinking they are purchasing your marijuana product only to actually be purchasing a competitor’s knock off. When it is not as good, they will stop buying the brand all together. So not only does this hurt you in the loss of initial sales but it will also destroy future sales by damaging the reputation of the product. Monitoring and enforcement stops this from happening and keeps the value of your trademarked brands intact. To learn more about monitoring your trademarks Click Here.
As always, if you have any questions regarding this or any related topics Contact Us at TTC Business Solutions.