The first and most important job of many startups is to define and protect business identity. To be honest, at the very beginning, there may be little more to the business than an idea and a name, maybe a catchy jingle. But protecting creative identity is what intellectual property law does, and the better the idea, the more protection the business will need.
What Intellectual Property Law Does
Federal patent law protects unique inventions or processes. Federal copyright law protects original creative works, such as literature, design, architecture and music, but may also apply to things like ad campaigns with an extended narrative line, such as the two-year old who says, “No,” much to Jimmy Fallon’s frustration. Trademark law comes from a variety of sources, including federal trademark registration and state law. It covers names, logos, hashtags, and the general appearance of a product or mascot — the bagginess of Ronald McDonald’s pant legs, for example (termed “trade dress”). Domain name and IP address registration may strengthen identity protection, especially if your business has or intends to have a significant online presence.
Advice for When It’s Not Risky Business
This is all part of the basic business groundwork that will also involve choosing a form of business, registering a business name, setting up a bank account and establishing business credit. A good business attorney, who is interested in your eventual business success, can put a package together, probably for a fixed price. A legitimate marijuana business needs this legal protection as much as any other business.
The standard advice is that federal law offers the best protection for interstate commerce. State trademark registration is next best, but limited geographically. Common law trademark protection based on use is problematic. None of these are worth anything without vigilance and a willingness to be litigious. IP law does not enforce itself. Let the dogs out. Your business identity is worth only what you are willing to do to defend it.
For now, though, chuck the standard advice, or some of it. Federal law offers very little protection to an industry still illegal under federal law. Marijuana businesses have to be legally creative.
What Federal Law Might Still Offer
If your unique hydroponic process will work for growing basil and cherry tomatoes as well as weed, or your new design for a vaporizer will work for tobacco, these may still be patentable. The patent process is slow and expensive, so be prepared to defend your work with common law service mark (SM) or trademark (TM) designations while the process grinds on. Ancillary businesses, in general, may be able to benefit from the protections of federal intellectual property law to a greater extent than retail businesses.
There are also some “parking” strategies. Some businesses, notably tobacco companies, have reportedly registered names and other items under federal trademark law for things other than marijuana, in anticipation of transferring those marks on eventual legalization. If there is money to spend, this looks like a good long term investment.
The story of federal protection would not be complete without touching on what seemed like a cruel joke in 2010. The U.S. Patent and Trademark Office opened and then very quickly closed a registration category that would have included medical marijuana. What that was about is anybody’s guess.
State Law Strategies
So, here we are, down in the weeds, talking about state statutory trademark protection in each of the 23 states where marijuana is legal today. Those rules will be different in each state and will have different court-developed case law interpretation. Although both New York and New Jersey have legalized medical marijuana, the degree to which IP law will protect product name, logo and unique color scheme may differ in these two states.
In Colorado, as in many other states, trademarks may be registered with the Department of State. In Colorado, registration is online and must be renewed every five years. State registration generally puts other businesses within the state on notice that a particular product name, logo or slogan belongs to you. If they use it, you may sue them. Registration may also keep you from inadvertently infringing on someone else’s trademark. It does not do anything with respect to use by a business in another state. That is probably enough for the moment. It will not be when marijuana is more widely legalized and interstate commerce is the goal.
State Common Law Protection
In theory, you can also protect the name of your product simply by using it. From a practical standpoint, however, if you do not register it with the state, other businesses outside of your immediate market have no way to know about your ownership rights. It is also risky. You may also discover that the goodwill you built because of your fine product or service has been deliberately used or ruined by an entirely unrelated enterprise. Many businesses that rely on common law protection, also subscribe to trademark watch services to detect potential infringements and assemble evidence in the event of a lawsuit. This may not be a bad idea even with registration.
The best approach to protecting the creative identity of your business and products is probably an all-of-the-above strategy. Use federal law whenever possible. Use state law when you have to, but remember that this is an aggressive business, and protecting your identity ultimately depends on your vigilance and willingness to defend it.