Intellectual property law firm offers protection tips to cannabis businesses
While cannabis is still an illegal substance at the federal level—and the policy of the United States Patent and Trademark Office (USPTO) is to prohibit the registration of trademarks that identify the source of illegal substances—state-legal cannabis business owners can still take several steps to protect their brand until laws at the federal level change. Intellectual property attorney Zachary Grant of Fishman Stewart offers best practices for cannabis brand owners who are frustrated by competitors using their brand or repurposing long-established recipes with impunity.
“The foundation of trademark law is still rooted in how brands are recognized by the public,” Grant said. “Regardless of whether it is registered, simply using your trademark properly can afford you rights and set you up for a strong federal trademark application when registration for cannabis trademarks with the USPTO becomes possible.”
Trademark Selection: A trademark can be a word, image, sound, or even smell, so long as it functions to identify the source of a good or service. Importantly for cannabis growers, the company’s trademark should be distinct and separate from the name given to plant strains.
“For instance, Advil® pain medicine is a brand name for the generic drug ‘ibuprofen.’ Likewise, growers should give a new plant strain a name that is distinct from the trademark under which it is sold; otherwise, the strain name runs the risk of being considered ‘generic’ and unprotectable for the plant and derivative products,” Grant said.
Trademark Clearance: Identify marks owned by others that may conflict with your brand. Search federal and state trademark databases for registered marks and conduct general internet searches for unregistered marks. Also look for marks that may be perceived as similar in sight, sound, and meaning.
“Likewise, consider the availability of domain names and social media handles for brand cohesion,” Grant said. “If you find something identical or highly similar, consider a new mark or contact legal counsel to further evaluate risks.”
Proper Trademark Use: The trademark must be clear and distinct from the generic name and used as an adjective, not a noun, in marketing. Place a TM next to trademarks, SM next to service marks, and ® symbol for registered marks. Enforce your trademark to safeguard its strength by making sure other businesses do not create similar trademarks and contacting legal services to explore enforcement options if necessary.
State Level Protection: Currently, a state trademark registration is the best tool for cannabis businesses, creating a useful record of trademark use and placing other businesses within the state on notice of the trademark.
“Although not as powerful as a federal trademark registration, state-level registration makes it easier to enforce your trademark within the state,” Grant said. “Brand owners may not be able to enforce their trademark in other states, but they may be able to rely on common law rights in some circumstances.”
Don’t Forget Trade Secrets! To maintain a trade secret, reasonable efforts must be taken to prevent its public disclosure. Cannabis owners who have developed secret recipes or techniques must ensure the information is kept with very few people and protected from public view. Failure to do so significantly weakens any efforts made in court to validate that a trade secret has been stolen or used improperly.
Federal Registration for Legal Adjacent Products: Cannabis businesses can seek a federal trademark registration for legal products sold under the same mark. Products associated with the cannabis industry whose marks may be federally registered include the following:
• Consumable products such as tobacco, nicotine vape liquid, non-laced food, etc.
• Paraphernalia such as pipes, rolling papers, grinders, etc.
• Merchandise such as hats, bags, shirts, flags, etc.
“Businesses must provide proof of use that registered products are regularly sold with the applicant’s trademark. If the business ceases to sell those goods, the registration may be considered abandoned,” Grant said. “With shirts and apparel, the tags of the clothing should bear the trademark, and not only appear as stylized graphics on the outside.”
Preparing for Federal Law Changes: Be ready to submit a federal trademark application if cannabis-based substances are legalized at the federal level. The United States is a “first to file” nation giving priority to applicants who file first. Although there are avenues for senior brands to overcome junior brands who file first, avoiding such potential challenges increases the likelihood of registration while simultaneously promoting efficient prosecution.
In preparation for future federal trademark application filings, keep complete business records of everything sold, including how the product was sold, who it was sold to, and where and when it was sold. Federal registration requires that sales occur in “interstate commerce,” and there are several qualifying sales that are considered interstate commerce for federal registration.
It is important to note, however, that many experts suggest it is illegal for cannabis products to travel across state lines – even if transportation is between states with equal laws regarding cannabis – as federal law controls all travel among the states. Fortunately, there are other ways to demonstrate interstate commerce without transporting cannabis across state lines, including:
• In-state sales to out-of-state travelers
• Catalogs shipped to out-of-state customers
• Advertisements in more than one state, especially in paper publications or billboards
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