Novosibirsk, Russia – November 27, 2015: Classic Coca-Cola bottle on the black wooden background. Studio shoot.
What do Coca-Cola, McDonald’s, iPhone and Dos Equis all have in common? These are all brand names registered with the U.S. Patent and Trademark Office (which is why you often see the small “R” in a circle next to the names).
Much like every other industry, cannabis companies have products. These products often have brand names. These names may be designed to grow brand loyalty and distinguish them from other brands (BestCannaEver), to suggest some characteristics of the product (BestCannaForInsomnia) or to appeal to a particular target audience (BestCannaForSeniors). These names become part of your brand, which can be a very valuable asset for your cannabis business.
Protecting your name and your brands is an important step not only to ensure others can’t take your great ideas and use them for their own purposes, but also to ensure that you can continue to use them. Without taking the steps to protect your brand, you may be hit with a trademark infringement lawsuit and be ordered to cease using the names for your products.
There are three forms of trademark protection: federal trademark protection (which is what the ® signifies), state-level trademark protection and what is called “common law” trademark protection. These are listed in order of their relative power and level of protection, with federal trademark protection providing the strongest level of protection and common law trademark protection providing the weakest.
With federal trademark protection, your brand name is registered at the federal level and is protected in all 50 states, plus U.S. possessions and territories. This is done through an application submitted to the U.S. Patent and Trademark Office to register your brand. It puts everyone else on notice that you own a particular brand name or mark and gives you the exclusive right to use that brand name or mark for business purposes. However, the fact that cannabis is a Schedule I substance prohibited by federal law makes protecting cannabis brands at the federal level tricky. You will want to work with attorneys who are very skilled and knowledgeable not just in trademark law, but also in cannabis law.
However, make no mistake: It is possible to obtain meaningful federal trademark protection for brands that are used in association with cannabis products (and we will address federal trademark protection in the December issue of Leveraging the Law in Marijuana Venture).
State-level trademark protection is similar to federal trademark protection in many ways, but it is less powerful and generally more cumbersome as you will need to know the relevant trademark registration laws and procedures for each state in which you want to register the trademark. Plus, the trademark that you may be granted is only effective in that state. However, there are cases where you may want to pursue state-level trademark protection, such as when you are unable to get federal trademark protection.
The final level of trademark protection is common law. Unlike federal and state-level trademark protection, which are based on federal and state laws, common law trademark protection is basically the protection you get just by using a brand name or mark in business. There are many dangers and challenges related to this type of protection, not the least of which are the difficulty proving who really has rights to the brand name or mark, and the significant expenses and hassles you may need to go through to prove that you are the rightful owner of the brand name or mark.
There is no substitute for great products, but brand names and other marks to differentiate your products and your cannabis company will likely play a significant role in your long-term success. Customers want to know what they are buying, know if it’s the same product or the same quality as a product they have previously bought, and they want to be able to tell a friend about the products they have bought. Brand names are a big part of how this happens.
So if you are serious about your cannabis company, you should be serious about protecting one of the most valuable assets your company has: your brand.
Tom Zuber is the managing partner of Zuber Lawler & Del Duca LLP, a firm of 40 attorneys with offices in California, Illinois and New York. He holds a law degree from Columbia Law School, a master’s degree in public policy from Harvard University and a biomedical engineering degree from Rutgers University, where he graduated with highest honors. He can be reached at tzuber@zuberlaw.com.
Each month in Leveraging the Law, the attorneys at Zuber Lawler & Del Duca will tackle a new topic that is relevant to the marijuana industry, providing valuable information to help cannabis business owners build and grow their business. Zuber Lawler & Del Duca helps cannabis clients with mergers and acquisitions, intellectual property, regulatory compliance and litigation. The December issue of Marijuana Venture will go into greater detail about federal trademark protections.