This blog regularly features cannabis-related topics as branding and trademark protection are the most basic foundation for most businesses. Lately we have put a lot of emphasis on trademark litigation as as the industry matures, litigation has become inevitable. For your reference, here are some of the major trademark litigation of the past few years authored by our resident IP and trademark attorney, Alison Malsbury:
But it’s been a while since we revised the branding basics for cannabis companies and provided an overview of the updates on which products are protectable and which are not. In the past few years there have been some positive changes with the implementation of the 2018 Farm Bill – the USPTO published updated guidelines on how to register hemp brands last year, which can be found here.
I’ll give a brief overview of the cannabis branding landscape, but at this point it’s safe to say that almost every cannabis company has at least something that should be the foundation for obtaining brand protection. And now is exactly the right time to start developing your brand protection strategy.
Trademarks 101: A trademark is a word, phrase, symbol, and / or design that identifies and distinguishes the source of one party’s goods from those of another party. Usually a brand is recognized as a brand. The meaning of trademarks is twofold: On the one hand, owners of successful trademarks want to be sure that other parties cannot use and exploit their trademark without the trademark owner’s permission. On the other hand, perhaps more importantly, brands are vital from a consumer protection perspective. As a society, we want consumers to know where the goods and services they buy come from and make informed purchasing decisions based on factors such as quality and safety. The primary way that consumers can distinguish one company’s goods from another company’s goods is through branding.
There are three ways a trademark owner can establish trademark rights:
- By using the trademark in connection with their goods or services (legally) in trade;
- By registering the trademark with the US Patent and Trademark Office (USPTO); and
- By registering the trademark with an appropriate state trademark register.
Registering a trademark with the USPTO is the best way to protect your trademark. However, since cannabis is still illegal under federal law and a requirement for registering a federal trademark is that the applicant has “legally used” the trademark in trade, the USPTO has consistently refused to use trademarks for use on cannabis and other goods and Register services that violate the Controlled Substances Act (CSA).
The core of the analysis for a cannabis company’s eligibility under federal trademark law is whether the company sells goods or offers services that comply with federal law. To the extent that this is the case, these goods or services are likely to be trademarked.
To the extent that a company sells products that comply with both the Controlled Substances Act (CSA) and the Food, Drugs and Cosmetics Act (FDCA), those products are likely to be eligible as well. For example, while the FDA claims that CBD cannot be added to food without violating the FDCA, its position on CBD in topical products is very different. These products are likely to be eligible for trademark protection provided they comply with the 2018 Farm Bill. The key to current hemp CBD products is FDCA compliance, which is very dependent on how the products are marketed. For example, a current hemp CBD product that is marketed as a drug is not eligible for federal trademark protection. Certain hemp products are also generally recognized as safe (GRAS) by the FDA. These products, including hemp seed oil, are also eligible for federal trademark protection.
For products that do not meet the federal trademark protection threshold, there is a good chance that state protection is available. Although the protection offered by a state mark is geographically limited to the level of registration (and sometimes only to the area of use within that state), state marks typically offer broader geographic protection and remedies than common law rights. Common law rights are almost always limited to the geographic area in which you use the trademark. So if you only do business in San Francisco, your common law trademarks can only protect you within the city of San Francisco. And if you want to use the legal remedies available to trademark owners in the event of a breach, you need to register your trademark.
While trademark protection in the cannabis industry is still a challenge for entrepreneurs, the law is constantly changing and increasing opportunities are emerging. If you haven’t worked with your cannabis intellectual property attorney to develop a strategy to protect your trademarks now and in the future, now is the time to do it. Protecting your trademark early on is far easier and cheaper than pursuing a trademark infringement claim.