Given the onslaught of media pieces lately on celebrity cannabis brands, this would be a good time to enumerate branding issues faced by cannabis business owners, and to discuss how celebrity branding is different.
There are three main ways a brand owner can establish trademark rights:
Registering a trademark with the USPTO is the best way to protect one’s mark, but because cannabis is still illegal under federal law, and because one requirement for registering a federal trademark is that the applicant has made “legal use” of the mark in commerce, the USPTO has continually refused to register marks for use on cannabis and any other goods and services that violate the Controlled Substances Act (CSA). Under the CSA, it is unlawful to sell, offer for sale, or use any facility of interstate commerce to transport drug paraphernalia, i.e., “any equipment, product, or material of any kind which is primarily intended or designed for use in manufacturing, compounding, converting, concealing, producing, processing, preparing, injecting, ingesting, inhaling, or otherwise introducing into the human body a controlled substance, possession of which is unlawful under the CSA.”
So how do cannabis businesses go about protecting their brands when federal trademark protection is unavailable to marks used on federally illegal goods and services? One way is to obtain registration for ancillary goods or services that do not violate the CSA. For example, if you manufacture a cannabis-infused beverage AND you produce and sell a non-infused version of that beverage, it may be possible to secure a federal trademark registration to cover your non-infused beverages. The strategy here is to then assert a “likelihood of confusion” argument against any would-be infringers to prevent them from using your mark.
Another strategy we advise for our cannabis clients is state trademark registrations. Though the protection afforded by a state trademark is geographically limited to the state of the registration, they still provide more extensive geographic protection and legal remedies than common law rights. Common law rights can be limited to the geographic area in which you are using the mark, meaning that if you only do business in Seattle, your common law trademark rights could only protect you within the city of Seattle. And if you want to avail yourself of the statutory remedies available to trademark owners in infringement cases, you will need to register your mark.
But a fourth form of brand protection aside from trademark is available to celebrities, who possess “rights of publicity” in their name and likeness. This right of publicity gives individuals the right to control the commercial use of their identities. Companies cannot exploit a celebrity’s name or likeness without the celebrity’s consent and celebrities are free to use or license their identities as they choose.
We’re already seeing a number of celebrities jump on the cannabis branding bandwagon, including the Marley estate, Snoop Dogg, Willy Nelson, Whoopi Goldberg and Melissa Etheridge, along with many lesser known celebrities who have used their name to promote ancillary cannabis products. Though trademark registrations are at play for many of these brands, the rights of publicity of the celebrities are at the center of each of these branding deals. Because state law and not federal law regulates the right of publicity, it is not subject to the same restrictions based on legality of use as federal trademarks. This makes enforcement in the event of infringement much easier for celebrities.
Of course, even without the hurdles of federal trademark registration, using one’s name and likeness to sell cannabis is not without risk. Even ancillary companies face the risks posed by federal illegality, since these companies and their financial backers could be subject to charges of aiding and abetting or conspiring to violate the Controlled Substances Act for providing goods and services to cannabis businesses. Given the proliferation of celebrity-branded cannabis, however, this appears to be a risk that many celebrities are willing to take to become early entrants into the cannabis market.
Whether these celebrity endorsements will have staying power as the cannabis market expands remains to be seen, but for now, rights of publicity have provided celebrities with a powerful tool for establishing and protecting their cannabis brands. This is a real leg up in an industry where federal law has made brand protection such a complex legal issue.