Value of a marijuana trademark is more than just bag appeal

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In states with regulated marijuana markets, there exists an unsustainable pattern of similar – and sometimes even identical – trademarks being used to sell cannabis products.

This pattern exists because the U.S. Patent and Trademark Office (USPTO) bars federal trademark protection for marijuana products because they are federally illegal.

Without the ability to enforce trademark rights in federal court, there is often little to no recourse for cannabis companies seeking to stop trademark infringement from offenders in other states.

Preventing brand confusion

Trademark law exists to help consumers avoid confusion in the marketplace.

Every business selling a branded product or service has a trademark that helps consumers identify the origin of its goods and services.

However, because of marijuana’s Schedule 1 status, cannabis operators are limited in their ability to obtain federal trademark protection.

This has led to a unique challenge for the cannabis industry, where consumers can find themselves asking, “Is this edible or flower from Company X or Company Y?” when branding or packaging closely resembles those of other brands.

If a consumer asks this question, confusion has already occurred.

With each state that creates a regulated marijuana market, new brands emerge, increasing the risk of consumer confusion.

This makes choosing a strong trademark essential.

Cannabis trademarks

Cannabis companies typically choose a trademark for their business or product and assume, without a clearance search, that it is unique and unused by others.

Companies often believe they have secured trademark ownership by:

• Using the name.
• Owning the website domain.
• Registering social media handles.
• Registering the company with the secretary of state in their market.

Unfortunately, this belief can result in avoidable legal expenses.

Over the years, we’ve had numerous painful conversations with marijuana business owners who believed they were the first ones to use terms such as “420,” Canna, “Elevated,” “Emerald,” “Dank” and other terms associated with the cannabis plant or its culture.

Trademark protection

Until the federal law changes and the USPTO allows the registration of trademarks for plant-touching products, cannabis business owners will be treading water and waiting for trademark litigation that inevitably will occur.

Once the USPTO allows for the registration of marijuana products, it will be a double-edged sword that allows for trademark enforcement in federal court while paving the way for a deluge of new trademark applications.

In the meantime, marijuana business owners should seek alternative forms of protection for their trademarks.

On the federal level, trademarks are available for goods/services that don’t directly involve the plant, such as websites, social media, retail services, smoking accessories, non-infused goods and some hemp products and services.

On the state level, business owners can pursue trademark protection in markets where marijuana is regulated for their retail or cultivation services, flower, edibles, etc.

However, the scope of protection is limited.

Unlike federal trademark protection, which covers the entire country, state trademark protection is limited to the state of registration, offering only localized rights.

This can create challenges for multistate operators seeking broader protection.

It is also recommended to take advantage of other forms of intellectual property, such as copyright protection, patent protection and trade-secret protection, if applicable.

Defending your trademark

Cannabis companies can mistakenly believe that because they haven’t been sued for trademark issues, they won’t face lawsuits in the future.

For example, marijuana operators continue to create brands that infringe on non-cannabis trademarks.

In recent years, litigation around this issue has increased, and we anticipate a continued uptick in trademark enforcement and litigation from well-funded companies leveraging their resources to protect cannabis trademarks.

Bigger businesses often assume smaller businesses won’t have the resources to protect their trademarks.

When this enforcement occurs, companies will have two options: rebrand or litigate.

Choosing a strong trademark

Picking a strong trademark can be challenging, as what is considered a strong or “distinctive” trademark is not entirely intuitive.

Many business owners want their trademark to describe what they sell, but that’s not its purpose.

Instead, it’s better to highlight your company’s unique ethos, value proposition and the “why” behind your brand when choosing a trademark.

Selecting a unique and distinct trademark not only helps your brand stand out but also increases its long-term value and strength.

A unique trademark is easier to defend, making it more difficult for competitors to infringe on your brand and offering lasting protection and recognition.

Ignore trademarks at your peril

Operators who ignore trademark protections put their company, brand and reputation at great risk.

With the proposed reclassification of marijuana to Schedule 3 – and the shifting legal status of intoxicating cannabinoids – new entrepreneurs are likely to continue entering the cannabis industry, prompting an influx of new brands.

In the ever-evolving landscape of cannabis commerce, a strong trademark isn’t just a symbol, it’s a shield for protecting a business’ identity.

Now is the time to start thinking about protecting a trademark: securing one can be the difference between blazing a trail to success or getting stuck in the weeds.

Jessica Gonzalez is an attorney at the New York-headquartered Rudick Law Group. She can be reached at jgonzalez@rudicklawgroup.com. 

Luke Zimmerman is an attorney and owner of the San Francisco-based Law Office Of Luke S. Zimmerman. He can be reached at lzimmerman@cannbislaw.law.