Trademark Infringement in Cannabis
Cannabis and Hemp CBD companies should be increasingly vigilant regarding the risks of potential trademark infringements of non-cannabis and hemp-related marks. There has been a long history of cannabis products in the unlicensed markets with similar or near-identical names, logos, or identifying artwork to well-known brands, products, companies, and in some instances, well-known persons. These include names of strains of cannabis as well as edible and other infused and manufactured products. Many of these names and product designs were developed whimsically and/or humorously and did not have any intentional commercial intent to infringe. However, as cannabis continues its transition in most states to a licensed, regulated market and especially as the industry moves inexorably to a likely future of at least some level of federal de-scheduling if not outright legalization such potential infringements will become far riskier and should be strongly avoided.
Recently, the candy maker Mars Wrigley has sued cannabis companies for marketing products with names and logos similar to Mars Wrigley’s Starburst and Skittles brands. In addition, there have been infringement suits filed over marks as diverse as those for hot sauce, a bank, and a professional hockey team. It is likely that lawsuits grow increasingly common as cannabis and hemp CBD become more prominent and established in the mainstream commercial marketplace and more robust legalization and regulations efforts continue on the local, state, and eventually federal levels.
Trademarks are registered with the U.S. Patent and Trademark Office (USPTO) which reviews and approves applications for trademarks. A trademark can be defined broadly and may be a word, phrase, logo, symbol, design, or artwork that represents a product, brand, and in some cases, even an individual person. Trademarks are regulated by both federal and state law, and some states offer trademark registrations as well. For example, California allows cannabis trademarks to be registered since these cannot be registered federally due to the existing federal prohibition (though many cannabis companies and products are able to register marks for alternate classes of goods and services. Trademarks may be registered for goods and services that already exist in the marketplace or for intent to use the marks commercially going forward.
Use of potentially infringing marks creates multiple levels of risk for cannabis and hemp companies. Such marks will be ineligible for their own trademark protection if they are deemed to be infringing upon an already existing mark. For example, even if and when the federal government allows cannabis trademarks to be registered, a mark for a candy similarly named and/or branded to an existing mark such as Skittles would be rejected. The policy grounds for trademarks are both to protect the commercial interests of the holder of the trademark and to avoid consumer confusion. A mark similar to another mark in a related market of product clearly violates both of these. As such, any cannabis or hemp company will only be able to avail itself of trademark protections by avoiding obvious or likely infringing marks.
In addition, as shown in the above instances in the article, existing trademark holders have legal recourses against potential infringers including infringement suits which could result both in injunctions to cease use of the mark immediately and significant monetary damages and penalties for violations. Such lawsuits and legal actions will only likely become more common as the cannabis and hemp markets grow and develop and the costs and risks of damages from such suits will also increase.
Finally, use of marks connected to consumers with non-cannabis products may violate state laws regarding the advertisement, marketing, packaging, and branding of cannabis products. Many states prohibit cannabis products whose name, design, packaging, or product type are likely to appeal to minors or create consumer confusion. Products similar in name, design, branding, and packaging to candies are specifically prohibited in California, for example. As such, producing and marketing such products carries the risk of regulatory violations, including fines, and penalties, and license and permit suspensions and forfeitures.
Given the risks of potential infringement of existing marks, and the likelihood that such risks will continue to increase going forward, it is best practice to error on the side of caution in developing brands, product names, logos, and designs that are potentially infringing. In addition, it is prudent to consult with an attorney familiar with cannabis regulations on the local, and state federal level in your jurisdiction, as well as advertising and trademark law, prior to developing a product or brand that carries the financial, legal, and regulatory risks of a potential infringement against an existing non-cannabis mark.