September 13, 2017
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The value of a marijuana license increases significantly if the business using the license has invested in building a scalable brand. That means the business must have a brand that can be protected and exploited based on trademark laws.
This is particularly important as marijuana businesses expand across borders, and even more important if marijuana is legalized at the federal level eventually. That’s also why it’s so important to have a complete trademark strategy in place for your marijuana brand.
The only way to be 100% certain that a brand is free to scale is if it has been trademarked, but there is an important step that should be taken first – a comprehensive trademark search.
A comprehensive trademark search is typically conducted by an intellectual property attorney with knowledge of intellectual property laws. He or she pays for a trademark search service provider to search all potential conflicts with your chosen brand. This includes active, inactive, and pending trademarks as well as brands that have not been trademarked.
What makes a comprehensive trademark search different from a simple knockout search (aside from the price) is the depth of the search. A comprehensive search roots out potential conflicts that you can’t easily find online. It reveals conflicts that might come from similar brands even though those brands might not be in the same industry or the brand names don’t look alike or sound exactly the same.
Remember, trademark law was created to protect consumers, not businesses. Their purpose is to reduce consumer confusion, so two brands don’t have to be identical to cause potential confusion as to the source of goods among consumers.
The comprehensive trademark search reveals potential conflicts, but it’s up to the intellectual property attorney to interpret the results of the search report. For example, a conflict identified in a search report might not be a conflict at all depending on how you plan to use the mark. A skilled intellectual property attorney can help you choose a brand that you can use today and scale in the future to match your strategic business growth goals.
What happens if you develop your marijuana brand without doing a trademark search? Unfortunately, it’s a very real possibility that you’ll receive a cease and desist letter from another company one day. That’s a lesson Buds R Us learned the hard way when Toys R Us informed the company that it was infringing on its intellectual property.
The story of Buds R Us provides a perfect example of three important things most people don’t understand about trademark law:
Bottom-line, you should never start using a brand until you’re sure it won’t infringe on an existing mark. Even if another mark hasn’t been legally trademarked, the trademark is implied due to common law. Actually trademarking the mark at the state or federal level just gives the registrant additional benefits such as being able to collect damages in court (which can get very big).
A comprehensive trademark search is critical to keep you out of very expensive trouble later. Investing a few thousand dollars in a comprehensive search will end up costing you far less money than rebranding and fighting a lawsuit later will.
It will also save you money today because a knockout search won’t reveal all potential conflicts. You could invest in a brand design, get a clear knockout search report, and think everything is great. At that point, you might start using the brand in commerce for your marijuana business.
The problem is you can’t be 100% sure that your brand doesn’t conflict with another. One day, you might get a cease and desist letter because that knockout search didn’t find a common law conflicting mark or another kind of hard to find conflicting mark. As a result, you to have to rebrand everything you’ve built to date. It’s not pretty, and it’s not cheap.
A comprehensive trademark search adds value to your marijuana license. It shows potential investors that your intellectual property is positioned to grow in value and can be protected from dilution in the marketplace. It also shows the brand won’t face expensive trademark lawsuits or rebranding in the future.
Again, this is essential for brands that plan to cross borders and is even more important as part of a trademark strategy leading up to legalization of marijuana at the federal level.
