This would be a good time to review the branding protection avenues available to cannabis business owners, and to discuss celebrity branding.
There are three main ways a brand owner can establish trademark rights:
- By using the mark in connection with their goods or services (legally) in commerce;
- By registering the mark with the United States Patent and Trademark Office (USPTO); and
- By registering the mark with an appropriate state trademark registry.
Trademark rights are provided on a “first in time” and “highest in right” basis. Anyone using a word, symbol, or device to associate a source of a goods or services in commerce have the beginnings of potentially robust and protectable trademark rights. We call the rights granted from usage, and without any sort of registration, “common law” trademarks.
Common law trademark rights
Any cannabis brand that is using a mark in commerce to sell their cannabis products likely has common law trademark rights in and to the mark in the geographical regions in which they are selling their products. The good thing about this, is trademark law protects a brand’s trademark from the date of first use in commerce– even without a registration. The drawback is that this protection extends only to the areas in which you have actually used your mark. So if you only sell your product within Washington state, a common law trademark would not prohibit someone from using an identical mark to sell their cannabis brand in Oregon. This can create potential confusion, and limit the growth and expansion of your brand to multiple states should your name become popular elsewhere before you expand and reach that new market.
Registered trademark rights
Generally speaking, registering a trademark on the federal level with the USPTO is the best way to protect one’s mark nationally, even in areas in which you have not yet sold your product. However, because cannabis is still illegal under federal law, and because one requirement for registering a federal trademark is that the applicant has made “legal use” of the mark in commerce, the USPTO has continually refused to register marks for use on cannabis and any other goods and services that violate the Controlled Substances Act (CSA) or the Food Drug and Cosmetic Act (FDCA). Under these federal regulations, it is unlawful to sell, offer for sale those products containing cannabinoids that are unlawful controlled substances under the CSA, and under the FDCA– even food products such as gummies that contain CBD.
How cannabis businesses work around trademark registration embargo
So how do cannabis businesses go about protecting their brands nationally, when federal trademark protection is unavailable to marks used on federally illegal goods and services?
Registrations over non-prohibited products
Previously, many cannabis lawyers recommended obtaining registration for ancillary goods or services that do not violate the CSA or FDCA, or for those classifications that are technically legal even though their products could be used illegally. For example, if you manufacture a cannabis-infused beverage AND you produce and sell a non-infused version of that beverage, it may be possible to secure a federal trademark registration to cover your non-infused beverages. Or likewise, if you sell products with legal cannabinoids, it may be possible to obtain a federal trademark registration for those non-prohibited products.
However, recently, the USPTO has examined all uses of the mark in commerce, including those that are not specified in the trademark application, by looking at extrinsic evidence. This examination includes looking at how your products are sold, what products are sold with your mark, and what the true intention of your products are. If the examining attorneys at the USPTO find your mark on unlawful goods, or they find evidence that your goods are actually intended for unlawful purposes, they are likely to refuse registration. An example of this, is smoking e-juice dab devices that are claimed to be tobacco products but are actually used for dabbing cannabis infusions. Recently, the USPTO has used extrinsic evidence to determine the true intent of the product to refuse registration. The USPTO will also examine you website and promotional material to determine if you are using the mark on unlawful products. This all means that obtaining a federal trademark registration has become a difficult feat, and while you can claim a lawful use in the application, the USPTO will look to find if you also have unlawful uses with the mark.
Multiple state registrations
Another strategy we advise for our cannabis clients is state trademark registrations in as many states as possible– that is, wherever the mark is being used.
Though the protection afforded by a state trademark is geographically limited to the state of the registration, they still provide more extensive geographic protection and legal remedies than common law rights. Because common law rights can be limited to the smaller geographic areas in which you are using the mark, meaning that if you only do business in Seattle, your common law trademark rights could only protect you within the city of Seattle, a state based trademark registration does provide you wider state wide protection. And if you want to avail yourself of the potential statutory remedies available to trademark owners in infringement cases, you will need to register your mark.
Rights of publicity as an alternative approach
Another form of brand protection, aside from trademark, is available to celebrities under concepts of “rights of publicity” in their name and likeness. This right of publicity gives individuals the right to control the commercial use of their identities. Companies cannot exploit a celebrity’s name or likeness without the celebrity’s consent and celebrities are free to use or license their identities as they choose.
A number of celebrities have jumped on the cannabis branding bandwagon, including the Marley estate, Snoop Dogg, Willy Nelson, Whoopi Goldberg and Melissa Etheridge, along with many lesser known celebrities who have used their name to promote ancillary cannabis products. See: Trademark Considerations for Your Celebrity Cannabis Licensing Deals. Though trademark registrations are at play for many of these brands, the rights of publicity of the celebrities are at the center of each of these branding deals. Because state law and not federal law regulates the right of publicity, it is not subject to the same restrictions based on legality of use as federal trademarks. This makes enforcement in the event of infringement much easier for celebrities under right of publicity principles.
Of course, even without the hurdles of federal trademark registration, using one’s name and likeness to sell cannabis is not without some conceptual risk– because these are still federally illegal products. However, given the proliferation of celebrity-branded cannabis, however, this appears to be a risk that many celebrities are willing to take to become early entrants into the cannabis market.
Celebrity endorsement can be a real leg up in an industry where federal law has made brand protection such a complex legal issue. Celebrities are nationally known figures, with the ability to enforce their rights of publicity in every state providing for such rights. Hitching your brand to a household name, provides the kind of national protection and recognition that comes close to a federal registration.
