You are currently viewing Increase in Trademark Disputes Within the Cannabis Industry

Increase in Trademark Disputes Within the Cannabis Industry

Loading

Last Updated on June 11, 2024 by Swetha LLM

Trademarks are valuable resources for business organisations. It safeguards their brands and sets their goods or services apart from rivals. It fosters the growth of customer trust. Trademarks are important in the rapidly growing cannabis business. As the cannabis sector grows and draws more firms, trademark issues have become more frequent. Conflicts have increased as a result of the fierce competition among entrepreneurs to create distinctive brand identities in this rapidly growing industry.

It is motivated by particular difficulties and complicated legal issues. The establishment of unified industry norms to guarantee cannabis companies’ long-term survival in this dynamic industry. The opening up of new markets, legalisation efforts, and changing public opinions are its main drivers.

What Trademarks are Related to Cannabis?

As a means of preventing unauthorised use or duplication of a protected trademark, trademark registration ensures the protection of rights arising from a protected wordmark, logo, or device pertaining to a variety of goods and services. So, it’s a way for the owner to protect their intellectual property. After gaining a solid reputation and goodwill in the market, it might also aim to indicate the standard of excellence expected of that proprietor.

Similarly, the goal of cannabis-related trademarks, sometimes known as “cannabis or marijuana marks,” is to give the cannabis sector a similar level of protection. For the following reasons, a cannabis company should think about trademark protection:

  • It makes trademark protection possible in the cutthroat and rapidly expanding industry of today.
  • Because of the earlier registration, it facilitates a quicker and more affordable resolution of conflicts.
  • Retaining customers promotes goodwill and market engagement.
  • It helps to build a valuable asset that may be profitably assigned, transferred, or licensed.
  • It grants both the exclusive right to use and the capacity to sue third parties for infringement.

Depending on whether the products or services are legitimate, basic protection is provided. Although the commercialisation of such commodities for recreational purposes is unlawful on a federal level, it is decriminalised or not enforced in certain states. Hence, the legal requirements between the United States of America and the European Union are not the same. Additionally, most US and EU jurisdictions allow and approve restricted medicinal use. It is known as “legal mosaicism” in relation to the cannabis business, which is why it is difficult and ambiguous to question whether a mark for such products or services is eligible for trademark protection. Cannabis remains categorised as a restricted substance in India. Trademarks related to cannabis are not governed by any specific laws or rules.

Why does the Cannabis Industry have a Problem with Trademark Infringement?

Due to the absence of national legislation, trademark infringement is an important problem in the cannabis sector. Unlike other sectors, there is no federal law governing trademarks in cannabis, leading to a fragmented legal landscape. Counterfeit goods can quickly enter the market, given limited State resources for enforcement of trade mark laws. Customers who rely on trademarks to ensure the authenticity and quality of products are put at risk by this.

The Effect of the Rise in Trademark Conflicts

In the cannabis industry, some common causes of trademark issues include the following:

  • Trademarks that are Comparable or Identical: Cannabis companies frequently select trademarks that are similar to one another. Conflicts about who gets to use them arise as a result. This is especially typical in the cannabis sector, where items are difficult to adequately define in words or phrases.
  • Geographical Areas: Businesses that deal with cannabis that operate in certain regions. Over trademark rights may result in disagreements. In one state, a company could use its trademark. Use of it in a different state is prohibited. Disagreements between companies that operate in different places could result.
  • Violation of Intellectual Property: By utilising identical or strikingly similar trademarks or brand names, cannabis firms run the risk of infringing upon the ownership rights of other businesses. Conflicts about intellectual property violations arise from it.

Controlling Trademark Conflicts in the Cannabis Sector

For cannabis companies, trademark battles may be expensive and time-consuming. However, there are ways to stop and avoid these arguments:

1. Perform an Extensive Trademark Search

Businesses should make sure the trademark is available by doing a thorough search before submitting an application for one. By doing this, issues involving similar or identical trademarks may be avoided.

2. Obtain Registrations for Trademarks

Companies ought to register their trademarks for their Logos, brands, and additional intellectual property. Ownership rights may be established in this way. It can stop other people from stealing their creative works.

3. Take Into Account Alternative Dispute Settlement Procedures

Trademark issues are frequently settled by means of alternative dispute resolution procedures, like arbitration and mediation. These techniques might be faster. It doesn’t cost as much as litigation.

4. As a Final Option, Litigation

Litigation can assist in resolving the problem if alternative dispute resolution techniques are unsuccessful. However, this should be the final stage since it may cost and take up a lot of time.

Which Trademark Protection Options are Open to CBD Or Cannabis Brands?

Different forms of trademark protection are available to brands that deal with CBD or cannabis:

  • Common Law Trademarks: These offer restricted protection for trademarks within the use area. However, because of its narrow reach, enforcement can be difficult.
  • State Trademark Office: Businesses operating in places where cannabis is allowed can benefit from state trademark registration. It does not apply to other states, but it aids in protecting brands inside the borders of the state.
  • Federal Trademark Registration: If CBD brands’ products meet the 2018 Farm Bill’s definition of “industrial hemp” and have a THC content of less than 0.3%, they are eligible to register their trademarks federally. However, FDA restrictions may provide difficulties for CBD products that are edible or make medicinal claims.

Trademark application strategies must be tailored to the distinct commercial needs of every CBD brand, accounting for claims of medicinal advantages as well as FDA compliance for edible goods.

Why are Cannabis and CBD Businesses in Need of Trademark Protection?

Businesses involved in CBD should seek federal trademark registration for a number of reasons, such as:

  • Exclusive Use: In the CBD or cannabis sector, trademark protection gives the owner the only authority to use their brand in commercial transactions. Trademark protection keeps a brand protected from rivals in the same industry by averting confusion and possible legal conflicts.
  • Dispute Resolution: Name, logo, and product packaging conflicts are resolved more easily when trademarks are involved.
  • Differentiation: Using trademarks to create distinctive branding is essential for differentiating the cannabis market, as is product packaging.
  • Customer Loyalty: Trademarks promote favorable brand perception, customer loyalty, and less consumer confusion.
  • Brand Experience: By including names, logos, and packaging, trademarks help to create a unique brand experience.
  • Property Value: Upon registration, a trademark becomes a tangible asset with marketable qualities that can be either fixed or sold.
  • Legal Action: To stop trademark infringement, trademark owners may file a lawsuit in federal court.
  • Refusal: When a company has a registered trademark, rivals and imitators are deterred from capitalising on its favorable image.
  • Global Growth: With a registered trademark, you can grow your company globally while maintaining the integrity of your brand.

In India, is it Legal to Trademark a Cannabis Business?

India has witnessed the entry of numerous promising cannabis start-ups into the market over the years. These start-ups typically concentrate on foods, cosmetics, textiles, accessories, and medicine. Despite its legal and industrial background, cannabis is still misunderstood in India. Any sort of cannabis use or sale is prohibited by the Narcotic Drugs and Psychotropic Substances Act of 1985, with offenders facing a maximum 20-year prison sentence. The state government is the sole entity with full responsibility for cannabis industry research and production. This is evident in the areas of Uttar Pradesh and Uttarakhand, where the states have licenses for hemp production. This suggests that a cannabis company operating in India cannot obtain a trademark there. In India, the cannabis business is totally prohibited and illegal, with the government controlling every aspect of it.

Trademarks’ Future in the Cannabis Sector

Trademarks in the cannabis sector are subject to the following factors as it develops:

  • Regulatory Changes: As more areas legalise cannabis, ongoing changes in the laws governing the substance may have an impact on trademark considerations and call for modifications.
  • Brand Development: As the industry matures, cannabis companies will place a higher priority on building their brands, with a focus on trademark registration and safeguarding unique market identities.
  • Difficulties with Federal Registration: Because of regulatory restrictions, the cannabis business faces difficulties registering federal trademarks. These restrictions could change if federal laws change.
  • International Considerations: Global expansion will require cannabis companies to navigate international trademark laws, understand diverse regulations and seek protection in multiple jurisdictions.
  • Emergence of Niche Brands: As the industry diversifies, niche or specialised cannabis brands may rise, emphasising the importance of trademarks in establishing unique value propositions.

Conclusion

To summarise, the safeguarding of trademarks for products related to cannabis can function as a dual-edged weapon adorned with a shield. It can be used in conjunction with intellectual creativity to produce a powerful, tangible asset. There will be disputes over who is allowed to use particular brand names and logos as more and more people cultivate and sell cannabis. Workers in the cannabis sector should be aware of trademark laws. In order to avoid and settle trademark conflicts, proactive measures should be implemented.

Concerning trademark matters, Kanakkupillai may assist companies in the cannabis sector. The team of skilled attorneys at Kanakkupillai offers knowledgeable advice on the legal environment surrounding cannabis trademarks. We assist companies in navigating tricky trademark situations. Speak with us right now.

FAQs

1. Why are trademark conflicts in the cannabis sector becoming more frequent?

Products related to cannabis are becoming legal and growing quickly, which is why there is an increase in trademark conflicts in the business. As more companies enter the market and battle for market share, disputes over product names, logos or labels have become an increasing problem.

2. What typical causes exist in the cannabis sector for trademark disputes?

The common cause of trademark problems in the cannabis sector is the similarity between product packaging, brand names or logos. In addition, in order to profit from the popularity of these brands, companies could intentionally or accidentally infringe existing patents.

3. With regard to trademark disputes, are there any issues unique to the cannabis industry?

Indeed, there are particular difficulties facing the cannabis sector in relation to trademark issues. These challenges include competing state and federal regulations, a lack of banking choices, and limitations on marketing and advertising strategies.

Swetha LLM

Swetha, LLM, a lawyer with skills in writing legal content, is passionate about simplifying complex legal concepts and engaging readers with her insights of nuanced legal ideas. She is able to preserve the accuracy of legal material while adjusting the tone and style to fit the audience.