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 With an outdated federal regulatory regime and constantly changing state landscape, retailers, distributors, cultivators, manufacturers, and service providers must be aware of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, and maintenance, as well as international trademark protection
- Brand Licensing: Prepare a variety of agreements and licenses, including brand licenses, non-disclosure agreements, vendor/supplier contracts, and consulting agreements
- Packaging & Labeling Compliance: Review and counsel on product packaging and labeling for compliance with applicable state, local, and federal laws
- Trade Secret: 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. Click here to 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, but California is a clear exception, as the Secretary of State’s Office voluntarily follows the federal trademark guidelines.
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.
Packaging & Labeling Compliance: 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 packaging, labeling, and website review services to ensure packaging compliance 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.
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.
Evoke Law has been at the forefront of cannabis trademarking ever since the beginning. Navigating the intricacies of state and federal cannabis IP protection is not easy and requires a focus that few firms can offer. We choose Mary and her team for the depth of knowledge they bring to the table and for the creative solutions to trademarking they make possible.Scott Palmer
Evoke law has been a tremendous ally in our work to change cannabis laws around the U.S. The firm offers a big advantage to MPP not simply because of its expertise in IP law, but because it understands the unique challenges cannabis organizations face. To work with a firm that speaks the language, understands the craft, and helps get ahead of challenges is a huge advantage. Mary and her team have been invaluable, and there is no IP firm I’d rather have at our backs.Chris Lindsay
Mary Shapiro’s knowledge of trademark law is equally matched with her expertise with the cannabis industry. As enthusiastic [as] she is about this new industry, Mary is well aware of the challenges and opportunities that you will face.
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.Ed Rosenthal
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