LOS ANGELES — Hi is a cannabis brand. Its logo — “hi” in white letters inside an orange circle — can be found above the front door of a Portland marijuana shop and on a handful of cannabis products, including massage oil and Hi Releaf pain-relief balm.
But you wouldn’t guess any of that from Hi’s trademark filings. In 2015, the brand’s parent company, Cannabis Sativa Inc., filed a trademark application — not for any of Hi’s core products, but for hats, T-shirts and a wide array of other apparel.
If the U.S. Patent and Trademark Office signs off on the application, Cannabis Sativa would be able to stop other companies from using the Hi brand on clothing, but it might not be able to stop rivals from setting up Hi-brand marijuana shops or selling knockoff Hi-brand products.
This is the odd state of affairs for trademark protection in the cannabis industry, one of the many byproducts of the gap between state and federal marijuana laws.
Though cannabis is legal for recreational or medicinal use in 28 states, it remains illegal under federal law. As a result, the U.S. Patent and Trademark Office will not register trademarks for marijuana retailers or for products that contain cannabis.
“You want to protect what you’re doing with the brand name,” said David Tobias, president of publicly traded Cannabis Sativa, “but you have to dance around it.”
One popular strategy for cannabis companies that can’t trademark their core products is to seek protection for a host of ancillary products and services.
“I call it the ‘circle the wagons’ approach,” said Todd Winter, an attorney outside Los Angeles who works with marijuana companies. “We get everything trademarked that we can, tangential to the actual cannabis product itself.”
The idea, one that is largely untested so far, is that if a cannabis company registers its trademark for other products, that will scare off would-be copycats and allow the company to be first in line if the federal government eases its stance on pot.
Cannabis Sativa applied for an apparel trademark and hopes to put its Hi brand on other products, including lozenges for smokers.
Stoner comedian Tommy Chong’s brand, Chong’s Choice, which sells a line of pre-rolled marijuana cigarettes, has applied for a trademark for vaporizers and “tobacco” jars.
Altai, a brand of cannabis chocolates, is seeking trademark protection for its name brand as a provider of information about medical cannabis.
Mary Shapiro, a San Francisco attorney, said the goal is to get something federally trademarked — and the more closely related to marijuana, the better. She is working with Salinas firm Indus Holdings, Altai’s parent company, on its trademark application.
Once a company has even applied to register a trademark, it’s noted in a federal database. When companies set out to submit trademark applications of their own, they search that database to see if their brand name is already in use — and if so, how it’s being used.
The goal of trademark law is to prevent consumer confusion, and different companies can use the same name for products as long as their products are in different categories and wouldn’t cause confusion.
The Patent and Trademark Office would likely reject a trademark application for a soap brand with a name similar to Unilever’s Dove, for instance, but it didn’t stop candy company Mars from trademarking Dove-brand chocolate.
The same rules apply in the cannabis industry, but it’s tricky. Unilever can make clear in its trademark application that Dove makes soap, which lets other companies know they shouldn’t try applying for a similar trademark for soap-related products.
Cannabis companies, however, have to be more circumspect, hoping that a trademark for rolling papers or providing cannabis information will be enough of a hint that a company has laid claim to a cannabis-related trademark.
“It raises a red flag that there’s a company already operating in the space,” Shapiro said. “Basically, it’s a warning sign that someone else has claimed rights to the name in connection to cannabis.”
Along with scaring off potential competitors, there’s another potential benefit: If the Patent and Trademark Office were to start approving trademarks for cannabis products, companies with cannabis-related marks could be first in line.
Going back to that notion of preventing confusion, trademark protection can apply not only to products a company makes now, but to products that a company might reasonably be expected to make later on — what trademark lawyers call the zone of natural expansion.
Even before Unilever started making Dove-brand shampoo, it would have been hard for another firm to trademark that name, as consumers might reasonably expect Dove soap and shampoo to come from the same company.
That’s why Winter is helping one of his clients, Arizona cannabis candy company Baked Bros, apply for a trademark on syrups and gummy candies that contain CBD, a hemp extract that’s available nationwide. The Patent and Trademark office has approved trademarks for other products containing CBD.
Winter said CBD is about as close to marijuana as the trademark office will go. If the office approves Bake Bros’ application, Winter said he believes marijuana products would be within the company’s zone of expansion.
“From a legal standpoint, if you have a hemp-based product under your brand, no one will be able to get a cannabis-related trademark for a similar brand,” he said.
Still, the “circle the wagons” strategy isn’t foolproof, and it comes with challenges of its own. To get and keep a trademark, companies actually have to use it.
To maintain its “hi” clothing trademark, Cannabis Sativa will actually have to sell some clothes. They’re not widely available for now, though Hal Lewis, the company’s national sales manager, said he plans to launch an online store this year. Chong’s Choice will have to keep selling jars and vaporizers, which are available online and at marijuana shops in a few states.
That represents a threat for cannabis brands. If customers love a company’s weed but not its other products, the company could lose its trademark altogether, said Alison Malsbury, another attorney who specializes in cannabis trademarks.
“The Patent and Trademark Office is looking for more than just token sales,” she said. “If you’re not continually using the trademark, it can be canceled and you can lose everything.”
What’s more, she and other attorneys note that the strategy cannabis companies are using remains untested. Unless and until the federal government decides to allow cannabis trademarks, companies can’t be sure their cannabis-adjacent trademarks will be able to carry over to pot products. And so far, there’s been little legal squabbling between cannabis companies, meaning there’s not much precedent for companies to rely on.
“We don’t really have any test cases,” Malsbury said.
But that could change as the cannabis industry continues to grow. Winter suspects disputes between cannabis companies have been rare in part because the industry is tightknit.
As money floods in and competition heats up, he expects companies to develop sharper elbows.
“There’s a fair amount of peer pressure within the industry to not use someone else’s brand,” he said. “But that’s changing a little with the dynamic of multimillionaires and billionaires investing in the industry.”
Published at Wed, 18 Jan 2017 14:00:42 +0000