EDITORS NOTE – Chad Anderson writes a guest blog for us this week, detailing the legality of cannabis trademarks, and how to expand your branding via current legal options.
Cannabis trademarks could become critical in branding your state legal cannabis industry business.
How important are your brand names? Jeff Bezos is quoted as saying, “A brand for a company is like a reputation for a person”, and he is right. Your reputation is the reason other people choose to associate with you or do business with you, and your brand is the reason customers choose your products over the competition. The same holds true for cannabis trademarks and branding.
When a customer walks into a store and sees a familiar brand, even if it isn’t a product she has used before, she already has an opinion as to the quality and dependability. The name, logo, colors and packaging work together to create a familiarity that draws consumers to the product. Branding builds loyalty and familiarity so that consumers pick your product over the other products on the shelf.
You can spend many years and many dollars building your brand and reputation to earn that consumer confidence, so when a product hits the shelves with a name similar to yours, wearing packaging that looks like yours, on a product like yours, you want to put a stop to it.
Lookalikes hurt you twice – first, when the consumer mistakenly buys the counterfeit instead of your genuine product, and second, when that consumer is unhappy with the counterfeit and mistakenly blames you! You not only lose that sale, you can lose that customer, so good businesses need to protect their brands against imposters.
Cannabis trademark protection is currently unavailable at the federal level.
A small but very important step in brand protection is registering it with the US Trademark Office, a yearlong process that gives the trademark owner a real hammer that can be used to prevent others from producing copycats and infringing on a good reputation.
However, cannabis products cannot be trademarked. The US Patent and Trademark Office, which issues trademarks, is a federal entity, and cannabis is illegal under the Controlled Substances Act, so the Trademark Office will refuse to register any trademark for a cannabis product and they will keep every dime in application fees after sending you a form rejection letter.
The Trademark Office does not care how long you have been in business, how many years you have sold your products under your brand name, how much money you have spent on building your brand, or how well you comply with local laws or the fact that recreational marijuana is legal in your state. Until the CSA is amended and cannabis is no longer illegal under federal law, the Trademark Office will not issue a trademark for any cannabis product, or product used in the consumption of cannabis. Period.
The Examiner will check out your website, and if she sees your product is cannabis, a cannabis derivative, or used in the consumption of cannabis, your application will be rejected.
This puts cannabis businesses in a difficult spot.
You want to build a brand, connect with consumers, and protect your reputation, but you cannot get a federal trademark. Anyone that tells you otherwise is lying, but there are some stop-gap options and it is still possible to protect your brands.
First, if you do business in states that register state trademarks, like Colorado, file trademark registrations in those states. State trademark registrations do not have the same force as a federal trademark, but they do provide some help in brand protection.
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Next, keep records of money spent on branding, like advertising, package development, and fees paid to logo designers. Keep a copy of every review and every article that mentions your brand, every time you sponsored an event, bought a booth at a show, or were featured on Cannabis Radio. If you need to take an imposter to court, the more you can show you have spent serious time, money and effort developing your brand, the better.
I have successfully established common law trademark rights without a federal trademark using evidence of extensive marketing and branding efforts, but it required gathering a lot of evidence to show a history of brand development. It is easier to keep a file of your branding efforts over time than try build that file from scratch looking backward.
Non cannabis trademarks can give you a potential foothold into better branding.
Finally, consult with a trademark attorney about possible non-cannabis lines that could be trademarked to establish a foothold for when the CSA is amended and cannabis is no longer federally illegal. A line of t-shirts under the brand “Cannabis” could qualify for a trademark registration while the same brand would be rejected for a line of rolling papers, however, you would need to show you really have a line of “Cannabis” brand t-shirts for sale, not just some t-shirts that have “Cannabis” on the front.
The trademark office knows the difference between a brand of clothing and clothing that is used for advertising; if it really is a line called “Cannabis”, it will have the brand shown on the tags, not just emblazoned across the front of a Hanes brand t-shirt. A skilled trademark lawyer can explain the nuances and successfully register your brand without wasting your money.
Trademarks are tricky in the cannabis industry but branding and brand protection is a necessary part of building your business, business reputation, and loyal customer base. As part of your comprehensive marketing plan, seek out a trademark attorney who understands your business and protect what you build.
Disclaimer: The information in this article is for general information purposes only and is not to be considered legal advice, nor is it intended to be a substitute for legal counsel. You are advised to seek out competent legal advice from a licensed attorney who can advise you on your particular legal circumstances.