When cannabis business owners choose a name for their company and for their brand of products and services, they need to ensure that the business name and brand selected will not infringe the trademark rights of anyone else. Just because marks related to cannabis products and services cannot be federally registered, it does not mean than any name or mark can be used. Trademarks can be federally registered for other ancillary or related goods and services. Additionally, common law trademark rights are still enforceable.
Most people are aware that they cannot use the same mark on the same goods or services as someone who already owns that trademark. A quick internet or USPTO database search can usually turn up these types of “direct hit” (exact match) conflicts. But that is not enough. Did you know that there are also 50 state trademark registers as well? Since federal trademark protection is not available for cannabis industry products and services, state registrations take on greater importance as it is the primary brand protection strategy available to brand owners. Clearing a potential business or brand name requires a search of all 50 state registers. Unfortunately, not all are available for free searching on the internet.
And what about common law trademark rights for unregistered brands? Many businesses do not register their marks, but they still enjoy trademark protection under state unfair competition laws. These can be uncovered by searching state corporation records and domain name records. Most businesses will have formed a corporation or limited liability company, or registered a website domain name. This can help uncover potential business and brand names that may currently being used as unregistered marks.
But clearing a potential business name or mark for use can’t stop at “direct hit” (exact match) searches. Not only can you not use a mark that is the same as a registered trademark, you cannot use a mark that is confusingly similar to a registered trademark. Analyzing and comparing marks to determine if they are confusingly similar is often more subjective than objective. This is one of those areas where experience matters and helps to produce more accurate conclusions.
There are a number of factors to be considered in this analysis:
1. Strength of the mark (how unique it is and whether other businesses in the same industry use similar words, word roots or imagery);
2. Proximity of the goods (how related are the products and services – would a potential customer think they both came from the same source?);
3. Similarity of the marks (sound, look and commercial impression);
4. Evidence of actual confusion (is there proof customers actually confused the two businesses in the past?);
5. Marketing channels used (e.g. internet sales, brick and mortar stores, wholesale, etc.);
6. Type of goods and the degree of care likely to be exercised by the purchaser (is this something a consumer takes a long time investigating or is it an impulse purchase?);
7. Defendant’s intent in selecting the mark (bad faith; did the business do due diligence before adopting the mark to ensure it would not be infringing?); and
8. Likelihood of expansion of the product lines (do businesses in this industry tend to expand into the same products and services?).
It can be even a bit more difficult when it comes to searching and comparing stylized marks, logos and other graphic marks. Searching just the literal elements (letters and numbers) of a mark is only half of the searching that needs to be done to clear the mark for use if it includes any stylized elements, graphics, fonts or colors.
If you perform an initial DIY internet search and uncover some marks that could be potential barriers to your use of a proposed mark, consulting an experienced trademark attorney can help you evaluate the data and make informed decisions before adopting your new business name or brand. Undertaking this due diligence can avoid liability for trademark infringement and needless costs for rebranding. With all of the money you are investing in launching a new business, it is a good use of your resources to lay a solid foundation for your business and the name it could have for decades.