Cannabis
Cannabis businesses face unique challenges when it comes to protecting their brand. With an outdated federal regulatory regime and constantly changing state landscape, retailers, distributors, cultivators, manufacturers, and service providers must be aware of the legal limitations that affect creating, developing, leveraging, and enforcing intellectual property rights.
Evoke Law’s range of services for cannabis business:
- Trademarks & Brand Management: All aspects—selection, clearance, registration, enforcement, disputes, and maintenance, as well as international trademark protection
- Brand & Technology Licensing: Prepare, review and negotiate agreements and licenses, including brand and technology licenses, non-disclosure agreements, vendor/supplier contracts, and consulting agreements
- Consumer Protection:
- Packaging & Labeling Compliance: Review and counsel on product packaging and labeling for compliance with applicable state, local, and federal laws
- Recall Plans: Providing a written action plan to protect public health and safety by promptly removing products that have been determined to be unsafe from the marketplace (required for all manufacturers in California)
- Advertising: Review and counsel on digital and print advertising language to ensure that no impermissible health claims are made
- Trade Secrets: Prepare and counsel on trade secret protection plans to protect your valuable confidential information
- Internet Policies: Draft and advise on terms of service and privacy policies
We are here to support the growth of your cannabis business.
Read our article debunking the common myths associated with trademark protection in the cannabis industry.
Trademarks & Brand Management
- Registration: Just because your business serves the cannabis industry does not necessarily disqualify your brand from federal or state trademark protection. In the United Sates, there are two ways to register a trademark: (1) State—if your products are only sold intrastate, e.g., within Colorado, and (2) Federal—if your products are sold in interstate commerce, that is outside of a single state. Federal applications are scrutinized closely and applications for cannabis products typically result in a “CSA Inquiry” from the United States Patent and Trademark Office (USPTO), where an applicant for a cannabis mark is required to submit statements that the applied-for goods and/or services do not violate the Controlled Substances Act (CSA). Most states where medicinal or recreational cannabis is legal provide state registration for cannabis-related marks.
- Selection: The key to building a strong cannabis brand starts with the selection. Your brand name is likely the first message that your customers and prospective customers receive about your product. Moreover, after repeated encounters, customers begin to connect a brand with the corresponding product values, whether that “value” is quality, style, price, features, location, ease of use, etc. Selecting the word or phrase that will be the shorthand for your brand presents a significant opportunity to start your brand off right.
- Clearance: After selecting a mark, clearance is essential to avoiding infringing another mark owned by someone with prior statutory or common law (unregistered) rights, or receiving a likelihood of confusion refusal to an application by the USPTO.
Likelihood of confusion—the standard for trademark infringement—occurs when a mark is considered confusingly similar (marks need not be identical) to another mark. A challenge to the use and/or registration of a proposed mark would inevitably be costly and, if successful, can result in forcing you to change your name and potentially lose any goodwill associated with the mark, along with the costs of selecting, clearing, and adopting a new mark, and costs of re-launching the product with a new name. In some infringement matters, product recalls may be required, adding to the expense and further loss of goodwill. - Enforcement & Dispute Resolution: It is the duty of a mark owner to enforce exclusive rights in a mark, or jeopardize the enforceability of the mark in the future. Unchallenged third party uses of a trademark weakens the strength of your company’s mark as a source identifier. Proactive enforcement efforts can provide peace of mind that the value of your company’s trademarks is being preserved.
On the other hand, if you receive a demand or cease & desist letter, you may need to defend against challenges of infringement. Evoke Law can assist by first assessing the relative rights in the marks at issue and formulating a strategy for your defense. - International: Evoke Law offers a worldwide network of specialized trademark attorneys to provide customized global registration strategies. For cannabis businesses, we generally recommend considering filing international applications in countries where the cannabis is decriminalized, legal for at least medical purposes, or likely to be legalized in the foreseeable future, such as Australia, Canada, European Community (parts of), Israel, Uruguay, etc. Besides increasing the value of your brand portfolio, international trademarks can be critical assets in enforcing trademark rights, since, unlike the U.S., many countries recognize rights based on the first-to-file, rather than the first-to-use.
Brand Licensing
If there are brand licensing opportunities, within the U.S. or internationally, Evoke Law can assist with due diligence on the prospective Licensee/Licensor and guide you through the negotiation process. We would first inventory the company’s intellectual property assets to confirm that they are protectable, and if so, whether they are adequately protected.
In any license concerning trademarks, quality control is extremely important from a legal perspective, therefore, it is essential to have adequate provisions to properly protect and preserve your trademark rights. Conversely, you don’t want to specify too much operational control such that the agreement establishes an “inadvertent” franchise, which can give rise to civil and criminal penalties.
Consumer Protection
Cannabis packaging and labeling requirements are designed to protect consumers. Non-compliance can result in a range of penalties, including fines, license suspension, and/or license revocation. Further, “health claims” on product packaging or website promotional pages could trigger scrutiny by the FDA and, members of the public may file a civil suit based on an injury due to a product labeling error or a failure to include a required warning. Violations may result in financial and reputational costs, including instituting a product recall. Reputation, credibility, and brand goodwill are the keys to sustainable business success. Having compliant packaging signals consumers that you operate a serious business, value consumer safety, and are devoted to long-term growth. Evoke Law provides a variety of services aimed at consumer protection including packaging, labeling, website review, and recall planning services to ensure adherence with state cannabis laws, as well as ensuring compliance with applicable federal regulations.
Trade Secret
Businesses should establish a trade secret protection plan as an official company policy, detailing internal procedures for safeguarding the organization’s trade secrets. By definition, a trade secret can be almost anything that has economic value and provides a competitive advantage. Each state has its own laws for protecting trade secrets, but all require that an owner take “reasonable steps” to safeguard the secrecy and confidentiality of the trade secret information; otherwise, the legal protections under trade secret law are lost. Additionally, the Defend Trade Secrets Act of 2016 (DTSA) is a federal law that allows a trade secret owner to bring an action in federal court.
Internet Policies
Evoke Law can assist in drafting Internet policies such as terms of service and privacy policies. A terms of service agreement is a set of regulations which users must agree to follow in order to use or access a website or mobile app. Having comprehensive terms of service is especially important for cannabis businesses, as these terms should include, among other things, a clear provision affirming that all users of a cannabis product website are over the age of 21. Additionally, terms of service typically include important provisions regarding the protection of intellectual property assets found on the website. A Privacy Policy is a statement about a website’s policy on collecting and releasing information it collects about a visitor. This policy should also explain if data may be left on a visitor’s computer, such as cookies.
Evoke Law is committed to helping the cannabis industry thrive and has years of experience successfully working with cannabis businesses to protect intellectual property assets.
We were fortunate to have grown with Mary through her corporate years and now with the formation of her own firm, Evoke Law. We recommend Evoke Law to colleagues because Mary Shapiro wants her clients to succeed.
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