February 24, 2014

Guest Column: Brand Names Key to Priming a Marijuana Business for National Expansion

MaryShapiro
By Mary L. Shapiro

As momentum for marijuana legalization grows across the country, the national commercialization of cannabis is no longer a pipe dream. In fact, it could become a reality sooner rather than later, providing companies with the opportunity to build an enduring brand from coast to coast.

To do this, however, entrepreneurs must give considerable thought to branding, and specifically to the names they choose for their businesses and products.

From both a marketing and legal standpoint, it’s important to develop brand names that are both distinctive and memorable. Incorporating overused terms can lead to brand confusion, and it certainly won’t make your product or company stand out.

The industry, for example, is already overrun with “canna” names: Cannacare, Cannabis Culture, Cannabis Now, Cannabis Career Institute, Cannabis Times, Canna Gardening…the list goes on. Similarly, brands with “420” or “green” as the dominant component are prevalent – and they can be hard to protect.

Keep in mind that United States trademark law protects names for the benefit of consumers – a trademark, therefore, is not necessarily owned by the first to use it.

The legal standard for a protectable “name” is something that distinguishes your product from your competitors by communicating to the relevant consumer a unique source for the product at issue. It could be a word, symbol, slogan, design element, logo or even a non-traditional mark such as color, texture, sound or motion.

But the actual name is still important. From a marketing perspective, your brand should not only incorporate a name that a customer can remember and distinguish from competing companies and products, it should also make an emotional connection.

Here’s why: Though your brand is much more than a name, it is also shorthand for your identity in the marketplace. If your brand name sounds too much like another company’s, the goodwill you build up diffuses to anybody with a name like yours.

Let’s take “Green Cross” as an example. This is a common name across the industry.

On the dispensary side, there’s The Green Cross (San Francisco); Seattle Green Cross (Seattle); Green Cross of Cherry Creek (Denver); Green Cross Wellness (Rifle, Colorado); Encanto Green Cross (Phoenix) and Green Cross Dispensary (Torrance, California), to name a few. There’s also a host of other “green” cultivation and ancillary companies: Green Room Growers, Green Arbor Clothing, Green Bird Delivery, Green Dot Delivery, Green Shadow Collective, GreenJean’s Place, and so on.

Contrast those with brands like Volcano (vaporizer), Leafly (online strain reviews and dispensary listings), Hempelicious (edibles) and Walking Raven MMC (dispensary).  Those names stand out and are something that a customer will more easily recall.

It’s important to note that businesses in every industry niche – from testing labs and software firms to cannabis magazines and websites – should take branding seriously. This also applies to growers and seed suppliers, as they have the opportunity to become critical players as well.

Legally, the strongest trademarks you can select are made-up or real words/phrases used in an arbitrary fashion. Examples include Igzactly (dispensary), Nuvilex (biotechnology) and Ladybud (magazine). Or you can go for something completely different with an arbitrary trademark such as Vortex and DaVinci (vaporizers) or Steep Hill (testing).

But beware: This strategy can be expensive because you will have to build a connection between the brand and the prospective consumer.

Suggestive trademarks have a built-in emotional connection to the buyer. Gold Rush delivery services communicates speed and precious cargo. GrowLife offers the far-reaching promise of budding hydroponic life. Conscious Confections belies the risky dosage issues with edibles and provides at least the suggestion that you can remain mindful while medicated. (Keep in mind there can be a fine line between suggestive and merely descriptive marks.)

Once you settle on a name, you must make sure no one else – even companies in related industries – has already laid claim to the name before officially registering your trademark. The initial process, called clearance, is a robust search through commercial, business and government databases to determine whether someone else is building a reputation using the same name or a similar one.

After selecting, adopting and registering your brand, your initial work is done. The next step is to remain vigilant to ensure no one else starts using your precious brand.

You need to monitor and react to anyone who treads on your trademarked territory. Courts have consistently held that a trademark holder who fails to aggressively monitor and respond to such activity could lose the exclusive right to a trademark.

The first step is to engage a watch service to monitor new trademark applications and/or domain name registrations that are arguably similar to yours. As trademarks are reported, each reference must be considered and investigated to assess whether there is actionable infringement, such as the similarity of the trademarks, relatedness of the goods/services, the trademark’s strength, trade channels, likelihood of expansion and other factors, depending on the jurisdiction.

These essential trademark steps have developed over many products and many years. The government’s role in this matter is avoiding consumer confusion, not protecting your trademark. Maintaining that protection is your responsibility.

Unless you’re intimately familiar with this process – from clearance to registering a trademark to monitoring new applications – you’ll need to enlist outside help from a specialized attorney or consultant, as the laws are often counter-intuitive and there are many legal hoops to jump through. One misstep can your leave your business vulnerable, allowing another company to use your name and possibly even take you to court for the rights to what you think is your brand.

A novice might also initiate a trademark challenge that cannot be substantiated or inadvertently make a disadvantageous state, which might come back to haunt them.

Failing to conduct clearance, register a trademark and enforce your rights can have expensive consequences, and it could very well impede your ability to develop a truly national brand in this fast-growing industry.

Mary L. Shapiro is an attorney specializing in trademark, copyright and Internet issues.


5 Comments:

  1. Ross’ Gold!

  2. Mary has guided us well over the year with our trademarks and branding. The challenges are real. Work with a pro.

  3. Hello Mary, GREAT article!

    Branding should be #1 when considering your approach.

    I have tradeNAMED (not trademarked as from my understanding that is for logos) but I have tradeNAMED several things at my state level & have also secured all .com’s, .net’s & .org’s for related words.

    What can or should be done on a federal level, if anything in relation to a tradeNAME? (I do not have a logo as of yet, so the trademark isn’t the point of discussion here, I’m focused solely on capturing & securing all things in relation to the name itself)

    My tradename incorporates my states name into it, so I don’t know how effective anything on a federal level would be? But I want to cover all bases.

    Thank you!

  4. I agree Patrick, the Ross’ Gold company has a good ring to it, very memorable. Much more distintive than all the ‘green’ companies mentioned here.

  5. Great article, Mary. I have been told that since cannabis is still federally legal, a trademark is not possible. Is this true?

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