17 Jul Trademark Protection for Marijuana Businesses
Any well-established company or business should have a recognizable and distinct brand that is designed both to distinguish its products from its competitors’ and also to foster brand loyalty. Generally, the best way to protect your brand is to register your trademark. Trademark protection is available on both state and national levels. However, because marijuana is illegal under federal law, marijuana and marijuana related products do not have access to the same levels of national brand protection as other industries.
What Is a Trademark?
A trademark, at its most basic level, is a mark that uses words, logos, slogans, symbols, unique colors, sounds, shapes, or designs – or a combination of these – to designate the source of particular goods or services. A mark should be distinctive from and not substantially similar to any other registered mark in the region that you are seeking protection.
For instance, in the marijuana industry, trademarks appear as logos such as Phat Panda’s distinctive sunglasses-wearing panda mascot, and also in just the words “Phat Panda” themselves. Even the slogan attached to Sprig’s marijuana-infused beverage from California, “Smile More,” could conceivably receive trademark protection. Colors can also be trademarked, but protections only attach in situations where similar colors could cause confusion between products. For example, Tiffany & Co.’s famous “Tiffany blue” trademark is only protected when used for jewelry and gift boxes and bags; not when the color is used in other situations where confusion would not likely result. That is, Tiffany & Co. cannot restrict you from painting a building the “Tiffany blue” color because their trademark protection does not extend that far since consumers are unlikely to be confused or tricked into believing that the source of that building is Tiffany & Co.
Which characteristics make a particular trademark “strong” in commerce and protectable under the law is a contentious issue in litigation, but a strong mark is almost always considered “distinctive.” Distinctiveness can mean that the mark employs words that are either arbitrary of fanciful, such as using the word APPLE to describe computers. Marks that are suggestive about the good or service being offered under the trademark, like COPPERTONE tanning lotion, can also be considered distinctive. However, such descriptive or suggestive characteristics do not make the trademark inherently distinctive, but these marks are capable of acquiring distinctiveness through use when they acquire a recognizable secondary meaning in the marketplace, like the example above. When creating or selecting your own mark, it is better to select a fanciful or arbitrary mark rather than one that is merely descriptive of the product, as the former category is generally considered inherently distinctive in the relevant market.
Additionally, geographically descriptive terms – a street name, city, state, or geographic landmark such as a river or mountain – are considered to be merely descriptive of the mark in question. Like suggestive marks, these geographic terms will likely not be eligible for trademark protection unless the applicant can show that the geographic descriptor has acquired a secondary meaning. Strong geographic descriptors have been found in protectable trademarks particularly when they are arbitrary or suggestive: for example, using the word ATLANTIC to describe a magazine, or ARIZONA for tea.
Protecting Your Mark or Brand
Ordinarily, there are two ways to obtain trademark rights enabling you to protect your brand: (i) establishing your mark, and (ii) registering your mark with state and federal agencies.
Establishing Your Mark
The process of establishing your mark occurs just by using your mark in commerce – that is, affixing your trademark to your product or offer for services and conducting business. However, under this method of obtaining trademark protection, your rights are limited to the geographic area where the mark has been used. For example, if you use your mark in commerce in Washington State, your rights to that mark will only exist in Washington.
In most cases, to establish use of a mark in commerce, the mark holder needs to show that the mark is on a product for sale to the public (either on the product or on packaging), or that the mark was used in advertising or marketing materials of a product or service available to the public. For instance, if you submitted an advertisement to a magazine displaying your trademark and the product it represented, that would constitute “use in commerce” for the purposes of establishing trademark protection.
Registering Your Mark
To register a mark, your company must file an application with either the United States Patent and Trademark Office (USPTO) or the Secretary of State in the state in which you want protection. The processes of registering your mark with the USPTO and the local Secretary of State are distinct; the protections they offer are different. Additionally, it is important to know that – because cannabis is illegal federally – there are federal restrictions with respect to trademark protection available to marijuana businesses, perhaps making state registration more effective for cannabis businesses under current law.
Registering a trademark provides a number of benefits over establishing your mark through use, including the right to file an infringement lawsuit to enjoin the unlawful use as well as to receive monetary damages from infringing parties (which may include large lump sums representing the infringer’s gained profits and recovery of your attorney’s fees). Registering your trademark also acts as a bar to subsequent registration of a confusingly similar mark by another person or company, which helps keep your brand unique and distinguishable and your trademark protections strong.
Registering your trademark with the state affords more benefits and protections for your mark than merely establishing your mark through use, but only in the state in which you register. Accordingly, your mark need only be distinct in that state, rather than nationally. It does not matter, for example, if someone else is using the same mark for the same products on the other side of the country. In states in which some form of cannabis is legal, marijuana businesses are likely to face less scrutiny when registering a state mark than in states where cannabis is presently illegal to possess or consume. While it is inconvenient for business owners to have to register the mark in each state in which protection is desired, it is important to ensure that your mark is available and protectable (i.e. the state does not already have a mark registered that is substantially similar to the one you plan to register) in all states in which you want to conduct business before adopting a particular mark for your business.
For example, if you operate a licensed cannabis business in Washington State and do not sell or advertise your products or services in any other state, registering your trademark with the Washington Secretary of State would provide the best protection of your mark within Washington. If, instead, you operate licensed businesses in both Washington and Colorado, you should register the same mark separately with both the Washington and Colorado Secretaries of State in order to obtain protection in both regions and help ensure the integrity of your brand.
Limited Federal Registration
In order to obtain federal trademark protection through registration with the USPTO, the goods or services to which a mark relates may not have an “unlawful use in commerce.” Indeed, as the Trademark Trial and Appeal Board (TTAB) reaffirmed in July of 2016, unlawful use in commerce can be the basis for denying protection to a cannabis retailer’s mark. In In Re Morgan Brown, Serial No. 86362968, the TTAB affirmed the USPTO’s refusal to register the trademark “HERBAL ACCESS,” because the mark was used in connection with retail services at a Washington state medical cannabis dispensary. Because the mark was to be used in conjunction with providing cannabis, an activity prohibited under federal law, the mark did not constitute a federally lawful use in commerce and, therefore, it was denied registration. If the business owners decided to nevertheless use the mark to represent their products, other individuals or entities could copy and reproduce this mark, offer different or lower quality goods, and represent that the first business was the origin of the product. The business owners would have no recourse under federal trademark law.
In Re Morgan Brown demonstrates the current problem with registering marks federally: the USPTO is not accepting trademarks for cannabis related products or services if the mark holder is engaged in the service of providing cannabis to customers or patients because the provision of marijuana is illegal under the federal Controlled Substances Act. This means that any medicinal or retail mark holders that are seeking trademark protection for products or services that the USPTO determines constitute the provision of cannabis are currently unable to obtain federal trademark protection.
Cannabis business owners are not without options for protecting their brand on a federal level. Mark holders may still obtain federal brand protection by registering their mark with respect to ancillary products or services, such as for t-shirts, CBD products, transportation services, or glassware. For example, the USPTO accepted the trademark “Medical Jane” for a website that provides information, news, and articles about health and wellness relating to medical marijuana, as well as access to “Dr. Ganja,” a medical marijuana referral service. The USPTO has denied some ancillary marks, however, if the name relates too closely to marijuana: for example, the trademark “Maui Waui” for a brand of marijuana products was denied.
It is not particularly difficult or expensive to register your mark with the Secretary of State or with the USPTO, which offer comprehensive protection for your mark and for your brand depending on the type of product for which, and region where, you need protection. If you have branding or logos that could qualify for trademark protection for ancillary products, registering your marks with the USPTO offers the most complete protection for your brand nationwide. Otherwise, registering your marks in the state or states that you do business will offer you the best protection available in that particular region.
Maintaining and protecting your brand is critical in any industry; as the cannabis industry finds itself better established locally and nationally, maintaining a strong and protected brand in your market could make a big difference for your business.