As the cannabis industry grows and evolves, building a recognizable brand will become increasingly important. Strong and well-respected brand identities will help cannabis companies distinguish themselves from their competitors. Because of this, trademarks (the intellectual property constituting a brand and its related goodwill) will undoubtedly become some of the most valuable assets owned by successful cannabis companies.
As trademarks gain value, it is inevitable that copycats will emerge and attempt to profit off of the hard work of others. So, what is the legal process available when a business discovers a competitor or other type of infringer is copying an established cannabis brand?
A trademark owner who believes its mark is being infringed may file a civil action (i.e., lawsuit) in either state court or federal court for trademark infringement. The USPTO describes “Trademark Infringement” as “the unauthorized use of a trademark or service mark on or in connection with goods and/or services in a manner that is likely to cause confusion, deception, or mistake about the source of the goods and/or services.” Put another way, trademark infringement occurs when one party,– “infringer”–uses a trademark which is identical or confusingly similar to a trademark owned by another party, in relation to products or services which are identical or similar to the products or services covered by the pre-existing trademark.
To support a trademark infringement claim in court, a cannabis brand-owner must prove that:
- it owns a valid trademark;
- it has priority (it used the mark in commerce before the defendant); and
- the alleged infringer’s mark is likely to cause confusion in the minds of consumers about the source or sponsorship of the goods or services offered under the parties’ marks.
Given that ownership and priority are often not at issue, the test for trademark infringement usually hinges on the final element — likelihood of confusion. In determining whether a likelihood of confusion between brands exists, courts typically balance numerous issues. Federal courts consider eight non-exhaustive factors, known as the Sleekcraft factors, to determine whether a trademark use gives rise to a likelihood of confusion:
- strength of the mark(s);
- proximity or relatedness of the goods;
- similarity of the marks;
- evidence of actual confusion;
- marketing channels;
- degree of consumer care;
- the defendants’ intent; and
- likelihood of expansion.
AMF Inc. v. Sleekcraft Boats, 599 F.2d 341, 348–49 (9th Cir. 1979)
A plaintiff must often utilize one of three methods to prove likelihood of confusion exists:
- Survey evidence;
- Evidence of actual confusion; and/or
- Argument based on a clear inference arising from a comparison of the conflicting marks and the context of their use.
If the trademark owner is able to prove infringement, available remedies may include the following:
- a court order (injunction) that the defendant stop using the accused mark;
- an order requiring the destruction or forfeiture of infringing articles;
- monetary relief, including defendant’s profits, any damages sustained by the plaintiff, and the costs of the action; and
- an order that the defendant, in certain cases, pay the plaintiffs’ attorneys’ fees.
Brand protection is very important in the increasingly competitive cannabis industry. Cannabis companies should remain vigilant in policing their trademarks against potential infringers. The intellectual property attorneys at Rogoway Law Group possess extensive experience advising clients on ways to insulate brands from the risk of infringement and to enforce rights after potential infringement arises. Please feel free to reach out with any questions.
