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5 Things You Must Know about Trademarks and the Cannabis Industry

Before understanding the importance of trademarks specific to the marijuana industry, it is critical to first gain a deeper understanding of trademarks in the general sense and how they impact consumer-purchasing decisions in the marketplace.  Please consider the following thought experiment carefully.

Imagine walking into your local convenience store after a long and gruesome workout. You are incredibly thirsty and nearly delirious from dehydration. All you can think about is grabbing that cool and delicious drink from the refrigerator.  As you make your way to the back of the store where the beverages are kept, you see two nearly identical sports drinks front and center in the cooler; both are in plastic bottles with white caps and contain blue liquid.  As you investigate further, you notice that both drinks even contain the same amount of sugar and are otherwise entirely equal in their nutritional value. The only material difference between the two is that one bottle says “Gatorade” on its label and the other bottle says “CVS sports drink.”

Which one will you choose?

Of course, depending on how pleasant your past experience was with Gatorade, you will either reflexively reach for the Gatorade bottle or select the CVS bottle. Nevertheless, for our purposes, it doesn’t ultimately matter which bottle you choose but rather why you might choose one over the other.  Remember, each bottle is identical in every way except for their identified brand names.

Thus, the interesting and important lesson from this thought experiment is that your choice will entirely be a function of your positive/negative feelings towards the Gatorade brand.  This choice represents the essence of trademark law.

1. What Exactly Is A Trademark?

Trademarks, on the most fundamental level, are source identifiers; when you see a trademark (possibly a company name, logo, or slogan) on a product, you identify that product as being sourced from the company who owns the mark.  A trademark then is more than merely a visual cue – it is the symbolic manifestation of an idea.  Trademarks represent a swirling and ever evolving set of beliefs and attitudes about the company who owns the trademark. Ultimately, trademarks are crucial because they can significantly influence the decision making process of the consumer.

2. Which Marks are eligible for trademark protection?

In order for a company to obtain trademark protection on its name or logo, the mark must first meet a series of requirements.  First and foremost, trademarks are only eligible if they are sufficiently distinct. To better understand this principle, it is worthwhile to understand how the United States Patent and Trademark Office (USPTO) uses the “spectrum of distinctiveness” to evaluate the uniqueness (and subsequent viability) of the mark.  Marks will typically be assigned to one of four categories of distinctiveness; fanciful or arbitrary, suggestive, descriptive or generic.

Fanciful marks are those marks, which are entirely made up or otherwise unrelated to the product (think Nike – a word that never existed before the Nike company came along).

Suggestive marks are marks that suggest the nature of the goods the mark is being assigned to (a leather furniture business calling its company “glossy goods”).

Descriptive marks actually describe the good the mark is being attached to (a lighting business calling its company “Bright Lights”).

Finally, generic marks are common marks that everyone has the right to use (a lumber business calling its company, “The Lumber Company.”).

Fanciful marks represent the most distinct category while generic marks represent the category of least distinctiveness.  A full discussion of each category is beyond the scope of this article but suffice it to say, the more distinct the mark, the greater the likelihood of trademark eligibility. This of course makes sense – it wouldn’t be fair for an individual to launch a new vaporizer business, call it “The Vaporizer Company” and stop all other vaporizer companies from using the word “vaporizer”.

Once it is determined that the desired trademark is sufficiently distinct, it must now satisfy the second key threshold issue; use in commerce.  Here, the mark must either actually be used in commerce or the owner of the trademark must possess the intent to use the mark in commerce in the future. This means that merely coming up with a company name or logo is not enough – it must actually be used in conjunction with the sale of a specific product in the marketplace!

3. Do I Need To Register My Trademark? If So, Where?

Typically, one can obtain trademark protection on a mark in one of three different ways:

  1. In the first instance, one does not need to actually register the trademark but rather automatically obtains what is called common law protection in the limited, geographical area where the mark is being used in commerce.
  2. Obtaining slightly more protection, one can register the trademark in a State registry, granting exclusive ownership of that mark within that state.
  3. Obtaining the greatest amount of trademark protection, one can register the trademark in the United States Patent and Trademark Office, granting exclusive ownership of that mark throughout the country.

4. Can My Cannabis Company Acquire Trademark Protection?

Finally, the part of the article that everyone has been waiting for!

Recall, trademarks are assigned to goods and services that can legally be sold in commerce.  For federal trademarks, which provide the most coverage and are therefore the most sought after, the problem should be evident; Cannabis is a Schedule 1 drug under the Controlled Substance Act (CSA) and therefore cannot be sold in commerce.   How then can a cannabis company obtain trademarks on its company name and logo?

Trademarks are assigned to marks used in conjunction with specific goods and services.  If the only product your company is selling is cannabis, you will with near certainty not be able to obtain federal trademark protection. Yes, this means that no matter how creative you think the name of your cannabis strain is, it is not available for Federal trademark protection.  However, if your cannabis company ALSO sells non-cannabis products, you may consider applying for a trademark on your company name by tethering it to the non-cannabis product.   For example, a cannabis company that sells cannabis-baked goods may also sell non-cannabis infused baked goods and register the name in relation to this vanilla product (at least in theory).

Finally, it is worth noting that in States that have legalized cannabis, marijuana companies are less likely to be refused when submitting State trademark applications. These applications are typically cheaper than Federal trademarks and while they do not provide as much protection, they are still a very good option.  Here, to gain the broadest scope of protection, the cannabis company should register the mark in every state that it is being used in conjunction with a good being sold in commerce.

5. Cannabis Trademarks: Your Branding Is How Consumers Know You Are Different

It should go without saying that a company that wants to succeed and surpass its competition must provide quality goods and services.   If the product is not good, the company will fail.  However, while excellence in goods is necessary, it is by no means sufficient.  A newly formed Cannabis company breaking into this emergent industry must strive to create powerful branding symbols that become inextricably linked to the products it is selling.  It’s not good enough to create the Gatorade equivalent of your Cannabis product – consumers need to see your logo and believe it is the Gatorade equivalent.

So, is your company name eligible for trademark protection? Well, contact us to find out.

This blog post is for informational purposes only. Nothing in this post should be construed as legal advice.

Howard Cohn

Howard Cohn is the chief Patent Attorney at THC Legal Group, a team of Marijuana Lawyers specializing in legal protection for the cannabis industry. For more information, please visit their website at http://www.THCLegalGroup.com

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