Ask a Cannabis Trademark Lawyer: What About Trade Dress?

Posted by Margolin & Lawrence on November 2, 2017

If you have been looking into protecting your cannabusiness' intellectual property, you may have heard the term “trade dress” tossed around. Trade dress is a legal term for the visual components, design/shape, and packaging of a product. It encompasses the “bells & whistles,” so to speak, and is generally intended to protect the overall visual appearance of a product, minus any elements that are functional. The name comes from its historical origins, i.e., how a product is “dressed up.” And even though trade dress is a commonly forgotten right, it is actually quite important when it comes to cannabis law.

Trade dress protection has been extended to everything from restaurant “atmospheres” (Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763 (1992); Fuddruckers, Inc. v. Doc’s B.R. Others, Inc., 826 F.2d 837, 843 (1987)) to the unique setting of a golf course’s “signature hole.” (Pebble Beach Co. v. Tour 18 I, Ltd., 942 F.Supp. 1513 (S.D.Tex. 1996)). The gist of it is the “dressing” must be distinctive enough that consumers identify the source of your product by looking at its total appearance and packaging.

So can cannabusiness owners get trade dress protection? As with many questions in marijuana law, the answer is yes and no.

Just as with a trademark, you have common law rights to your trade dress that you can assert in bringing a lawsuit against infringers that pass off their products as yours. The basis is section 43(a) of the Lanham Act, which establishes civil liability for false designations of origin. However, trade dress owners asserting common law rights in court have the additional burden of showing that the “dressing” serves a non-functional purpose. For this reason (as well as the statutory damages established in the Lanham Act) it is preferable to obtain trade dress registration beforehand wherever possible.

Here we run into the same issues as with trademark: CSA-based rejections. The USPTO has caught on to the emerging cannabis industry, and currently has four trademark examining attorneys that that look at all of the cannabis-based applications coming in. There are many ways around a CSA refusal, and many of the strategies we have discussed for trademarks apply here as well.  

If you are thinking of trade dress protection already, then good news – you’re already ahead of the game. Speak with our cannabis law attorneys when you’re ready to take the next step!

How Can I Advertise My Cannabis Business?

Posted by Margolin & Lawrence on August 24, 2017

One of the most frequent questions our cannabis lawyers get from savvy business owners is: How can I legally market my cannabis products? As with many branches of marijuana law, cannabis business advertising regulations are complex because they fall under an overlapping set of legal regimes, some of which are in conflict with each other. When considering advertising cannabis four bodies of law apply: Federal, State, Local, and Internet TOS (the terms of service and operating contracts that govern your relationships with digital advertising hosts). Cannabis marketers must navigate all four sets of regulations here.

Federal Law places an absolute ban on cannabis advertising under the Controlled Substances Act of 1970. The Act stipulates: “It shall be unlawful for any person to place in any newspaper, magazine, handbill, or other publications, any written advertisement knowing that it has the purpose of seeking or offering illegally to receive, buy, or distribute a Schedule 1 controlled substance.” Further, “It shall be unlawful for any person to knowingly or intentionally use the Internet, or cause the Internet to be used, to advertise the sale of, or to offer to sell, distribute, or dispense, a controlled substance where such sale, distribution, or dispensing is not authorized by this subchapter or by the Controlled Substances Import and Export Act.” In other words, as far as federal law is concerned, there's no such thing as a legal marijuana advertisement.

California has recently placed regulations on marketing under the MAUCRSA (aka SB-94). This means that, if the regulations are followed, an advertisement can be in compliance with California law. Among its requirements are that advertisements must identify the license number of the advertiser, must not be targeted at individuals younger than 21, and must not contain false or misleading information about the products advertised. While these standards are relatively straightforward, figuring out how to advertise within the existing marijuana laws can be tricky even for California-based businesses. Local laws may differ from the state regulations, and a host of pending legislation like AB-175 (Marijuana: county of origin: marketing and advertising) and AB-76 (Adult-use marijuana: marketing) may change the state’s standards even further.

On top of that, the terms of service of online sites which host advertisements, such as Google and Facebook, often ban any mention of marijuana, on the basis that federal law still forbids it – since, of course, any online advertisement can be seen outside of California. This rapidly evolving area of law will be discussed at the State of Marijuana Conference this weekend in downtown Los Angeles, where attorney Allison Margolin will be leading a panel on Next-Gen Cannabusiness Marketing. For more information, check our guide to California cannabis business law or contact us at info@margolinlawrence.com to speak with one of our Los Angeles cannabis lawyers.

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This blog is not intended as legal advice and should not be taken as such. The possession, use, and/or sale of marijuana is illegal under federal law.