Stoner Candy Buzz Kill

Sweet Cannabis Trademark Infringement

Almost everyone in the cannabis space understands that they can’t get federal trademark protection for goods or services that violate federal law. However, that does not mean that naming a dispensary “Starbuds” or packaging goods to look like Skittles is fair game. 

Mars Inc. recently filed lawsuits against five marijuana manufacturers for selling edibles that look a lot like Skittles, Starburst, and Life Savers. As reported by the New York Times, the candy makers are not amused.  What is unclear is how the defendant(s) developed their “strategy” and if they thought about getting legal counsel to build and protect their brands.

Perhaps they assumed that since trademarks are not obtainable for THC products (or other things illegal under federal law) these were fair game. This is not true. Mars Inc. holds valid federal trademarks for these brands, which are valuable given the massive global sales volume behind those products. Additionally, Mars Inc. is a public company so the officers and directors have a fiduciary duty to protect their marks as assets of the company. 

Trademarks are a form of “IP” and the P stands for property. A property right means that the owner can keep someone else off their lawn, out of their building, or from using a confusingly similar name or logo. Cannabis entrepreneurs need to understand that intentionally making a cannabis product look, feel, and sound like another brand (especially a big one) is begging for a fight they can’t win and cannot afford to lose (a defendant infringing a federally registered trademark can be liable for statutory damages and attorneys fees).  As a general rule choosing a name or logo because it brings to mind another brand is generally a bad idea. 

In addition to the potential brand confusion, it is reckless and irresponsible to package a cannabis product in such a way that children can easily mistake it for the legal junk food that is too big a part of the American diet. As the cannabis industry continues to mature, manufacturers need to demonstrate that they are not wantonly flouting the law and putting kids in peril. If further acceptance and legalization efforts are to be successful it is foolish to give the opposition ammunition like the examples above. 

The smart way to brand a cannabis product is to choose something distinctive so consumers will associate the brand with your company and not as a rip-off of someone else’s success. Remember, a brand does not make a business more valuable.  It’s the other way around. As a business achieves some recognition (for quality, consistency, or other metrics) its brand becomes valuable because consumers associate the brand with those qualities. So start with a unique brand, that does not describe your product, and sets you apart from the other players in the industry. If the business becomes successful you will forever be grateful that you spent the time to do it well.