Pubdate: Sat, 07 Jan 2017
Source: Los Angeles Times (CA)
Copyright: 2017 Los Angeles Times
Author: Brian van der Brug, Los Angeles Times


Hi is a cannabis brand. Its logo -- "hi" in white letters inside an
orange circle -- can be found above the front door of a Portland,
Ore., marijuana shop and on a handful of cannabis products, including
massage oil and Hi Releaf pain-relief balm.

But you wouldn't guess any of that from Hi's trademark filings. In
2015, the brand's parent company, Cannabis Sativa Inc., filed a
trademark application -- not for any of Hi's core products, but for
hats, T-shirts and a wide array of other apparel.

If the U.S. Patent and Trademark Office signs off on the application,
Cannabis Sativa would be able to stop other companies from using the
Hi brand on clothing, but it might not be able to stop rivals from
setting up Hi-brand marijuana shops or selling knockoff Hi-brand products.

This is the odd state of affairs for trademark protection in the
cannabis industry, one of the many byproducts of the gap between state
and federal marijuana laws.

Though cannabis is legal for recreational or medicinal use in 28
states, it remains illegal under federal law. As a result, the U.S.
Patent and Trademark Office will not register trademarks for marijuana
retailers or for products that contain cannabis.

"You want to protect what you're doing with the brand name," said
David Tobias, president of publicly traded Cannabis Sativa, "but you
have to dance around it."

One popular strategy for cannabis companies that can't trademark their
core products is to seek protection for a host of ancillary products
and services.

As marijuana shops sprout in states that have legalized the drug, they
face a crucial stumbling block -- lack of access to the kind of
routine banking services other businesses take for granted.

U.S. Sen. Elizabeth Warren, a Massachusetts Democrat, is leading an
effort to make sure vendors working...

As marijuana shops sprout in states that have legalized the drug, they
face a crucial stumbling block -- lack of access to the kind of
routine banking services other businesses take for granted.

U.S. Sen. Elizabeth Warren, a Massachusetts Democrat, is leading an
effort to make sure vendors working... (Associated Press)

"I call it the ‘circle the wagons' approach," said Todd Winter,
a Costa Mesa attorney who works with marijuana companies. "We get
everything trademarked that we can, tangential to the actual cannabis
product itself."

The idea, one that is largely untested so far, is that if a cannabis
company registers its trademark for other products it will scare off
would-be copycats and allow the company to be first in line if the
federal government eases its stance on pot.

Cannabis Sativa applied for an apparel trademark and hopes to put its
Hi brand on other products, including lozenges for smokers.

Stoner comedian Tommy Chong's brand, Chong's Choice, which sells a
line of pre-rolled marijuana cigarettes, has applied for a trademark
for vaporizers and "tobacco" jars.

Altai, a brand of cannabis chocolates, is seeking trademark protection
for its name brand as a provider of information about medical cannabis.

Mary Shapiro, a San Francisco attorney, said the goal is to get
something federally trademarked -- and the more closely related to
marijuana, the better. She is working with Salinas firm Indus
Holdings, Altai's parent company, on its trademark

Once a company has even applied to register a trademark, it's noted in
a federal database. When companies set out to submit trademark
applications of their own, they search that database to see if their
brand name is already in use -- and if so, how it's being used.

The goal of trademark law is to prevent consumer confusion, and
different companies can use the same name for products as long as
their products are in different categories and wouldn't cause confusion.

The Patent and Trademark Office would likely reject a trademark
application for a soap brand with a name similar to Unilever's Dove,
but it didn't stop candy company Mars from trademarking Dove-brand

The same rules apply in the cannabis industry, but it's tricky.
Unilever can make clear in its trademark application that Dove makes
soap, which lets other companies know they shouldn't try applying for
a similar trademark for soap-related products.

Cannabis companies, however, have to be more circumspect, hoping that
a trademark for rolling papers or providing cannabis information will
be enough of a hint that a company has laid claim to a
cannabis-related trademark.

"It raises a red flag that there's a company already operating in the
space," Shapiro said. "Basically, it's a warning sign that someone
else has claimed rights to the name in connection to cannabis."

Along with scaring off potential competitors, there's another
potential benefit: If the Patent and Trademark Office were to start
approving trademarks for cannabis products, companies with
cannabis-related marks could be first in line.

Going back to that notion of preventing confusion, trademark
protection can apply not only to products a company makes now, but to
products that a company might reasonably be expected to make later on
- -- what trademark lawyers call the zone of natural expansion.

Even before Unilever started making Dove-brand shampoo, it would have
been hard for another firm to trademark that name, as consumers might
reasonably expect Dove soap and shampoo to come from the same company.

That's why Winter is helping one of his clients, Arizona cannabis
candy company Baked Bros, apply for a trademark on syrups and gummy
candies that contain CBD, a hemp extract that's available nationwide.
The Patent and Trademark office has approved trademarks for other
products containing CBD.

Winter said CBD is about as close to marijuana as the trademark office
will go. If the office approves Bake Bros' application, Winter said he
believes marijuana products would be within the company's zone of expansion.

"From a legal standpoint, if you have a hemp-based product under your
brand, no one will be able to get a cannabis-related trademark for a
similar brand," he said.

Still, the"circle the wagons" strategy isn't foolproof, and it comes
with challenges of its own. To get and keep a trademark, companies
actually have to use it.

To maintain its "hi" clothing trademark, Cannabis Sativa will actually
have to sell some clothes. They're not widely available for now,
though Hal Lewis, the company's national sales manager, said he plans
to launch an online store this year. Chong's Choice will have to keep
selling jars and vaporizers, which are available online and at
marijuana shops in a few states.

That represents a threat for cannabis brands. If customers love a
company's weed but not its other products, the company could lose its
trademark altogether, said Alison Malsbury, another attorney who
specializes in cannabis trademarks.

"The Patent and Trademark Office is looking for more than just token
sales," she said. "If you're not continually using the trademark, it
can be canceled and you can lose everything."

What's more, she and other attorneys note that the strategy cannabis
companies are using remains untested. Unless and until the federal
government decides to allow cannabis trademarks, companies can't be
sure their cannabis-adjacent trademarks will be able to carry over to
pot products. And so far, there's been little legal squabbling between
cannabis companies, meaning there's not much precedent for companies
to rely on.

"We don't really have any test cases," Malsbury said.

But that could change as the cannabis industry continues to grow.
Winter suspects disputes between cannabis companies have been rare in
part because the industry is tightknit.

As money floods in and competition heats up, he expects companies to
develop sharper elbows.

"There's a fair amount of peer pressure within the industry to not use
someone else's brand," he said. "But that's changing a little with the
dynamic of multimillionaires and billionaires investing in the industry."
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