Why Cannabis Companies Should Properly Mark Their Intellectual Property


Cannabis

July 20, 2018

Cannabis

 

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Marking and Cannabis

Having operated for so long in the black and gray market, the cannabis industry lacks knowledge of certain business and marketing tools that other industries use to succeed, such as the proper marking of intellectual property. As the prospect of cannabis legalization at the federal level is becoming more probable, it is increasingly important for newly emerging cannabis companies to grasp the significance of properly marking their intellectual property.

Intellectual property marking deals with how to correctly use those ™,  © , and ® symbols, as well as the phrases “All rights reserved” and “Patent Pending.” We see these symbols all over, but often people misuse them, or do not use them at all. Just because you see one of these symbols does not mean that it is being used correctly.

Improper use of these types of marks and phrases can not only mislead the public, but may impact the amount of damages your canna-company may be entitled to recover in the event of an infringement dispute. Proper marking makes it easier to prove infringement and may allow your canna-company to collect the greatest amount of damages in an infringement dispute.

 

Trademarks “TM” 

™ stands for “trademark.” The legal definition of a trademark is any word, slogan, symbol, design, or combination thereof that identifies the source of your goods and services and distinguishes them from the goods and services of another party.

The ™ identifying mark is normally attached to the top or bottom corners of a brand name or logo.The main purpose of this type of marking is to alert the public that the word, slogan, symbol,or  design is in the process of being trademarked. In addition, the use of this symbol may impede possible infringers from stealing or copying your work (i.e., your canna-related business venture).

 

It is a common misconception that ™ signifies that the mark connected to that specific good or service has already been registered with the United States Patent and Trademark Office (USPTO), when in fact it is often not. After some searching, it appears that the ™ symbol is not codified in federal law. However, common practice is that the ™ symbol means that someone is pursuing trademark rights. As a best practice, canna-companies should wait until they have a pending application before using the ™ symbol.

 

Registered Trademark “(R)”

This brings us to the ® symbol. Once your trademark has finished being processed and is granted, then usage of the ® symbol is appropriate to alert the public that your work is now legally registered with the USPTO’s system.

The marks ™ and ® carry different legal weight. As you may have predicted, a registered trademark offers a much stronger right than a pending one. This is mainly because a registered mark gives the trademark owner the standing to bring an infringement lawsuit to court. While there are many benefits to having a trademark on your brand name or logo (LINK TO OTHER BLOG), the ® symbol signifies that you have gone through the proper legal channels and now have certain rights against infringers. It is also important to note that improper usage of the ® symbol for companies who have not registered their marks with the USPTO is a violation of federal law.

 

Copyright  “©”

The © symbol stands for the word “copyright” and is used to indicate that a copyright has been registered with the United States Copyright Office. Copyrights function to protect original works including movies, novels, sound recordings, and computer software.

People often insert the © symbol on the bottom of their website. While this is a solid practice to adopt to battle against potential infringers and social media recyclers, it is highly important to register your website, website code, or any other creative works on your site. If you do not properly do this, or simply just attach “©” at the bottom, you may find it more difficult down the road if someone does steal your work and repurposes it as their own.

 

“All Rights Reserved”

The phrase “all rights reserved” used to hold some legal weight for protecting rights of the copyright holder. However, this term actually serves little legal function. The phrase itself, though widely used amongst artists, is not actually addressed or defined under Title 17 of the U.S. Code – Copyright Section.

What this phrase actually deals with is “moral rights,” which are the inalienable rights of the copyright owners. First established in the Berne convention, of which many countries including the United States were a part, the convention mapped out the basic minimum amount of moral rights that aimed to protect authors and their works. It is important to note that in 2017, the U.S. Copyright Office conducted a study into the use of moral rights of attribution and integrity to see if further improvements can be made. (See study here: https://www.copyright.gov/policy/moralrights/)

Basically, this type of marking can (1) grant the author of the work ownership, again serving as a way of alerting the public that the work is theirs, and (2)  allows for the author to object to any changes or repurposing of their work(which may harm reputation). Overall, “All rights reserved” aligns itself with this assertion to the public that the work is yours and that copying and reproduction of your work is prohibited.

 

“Patent Pending”

Similar to the use of ™, the phrase “patent pending” indicates that your work is currently being processed for patent protection (i.e., you have filed an application with the USPTO). Once you alert the public of your patent pending invention, this marks the start of your legal protection. Upon your patent being granted, you can seek damages from infringers who were infringing during this time when you had your invention properly marked.

If you use the phrase “patent pending” but have not filed a patent application, you are in violation of federal law. The best practice is to first file an application with the U.S. Patent and Trademark Office (USPTO). Once you file, you are free to use the phrase “patent pending” on your work. Note that the phrase should ONLY be used on the type of work covered in your application, not everything that your company sells.

Why Your Cannabis Company Should Properly Mark Your Intellectual Property

 

A Problematic Trend in Cannabis-related Companies

While properly marking your intellectual property may seem like a trivial formality, it is the type of follow-through that reflects well on your company and illustrates just how serious you are about protecting your business. One problematic trend in canna-companies is that when they apply for and are granted trademarks, they fail to include the ™ and ® markings on their website. Three companies exemplifying this trend are Seedo, Tökr, and MTRAC, described below.

Seedo, an invention created by Seedolab, is the first fully automatic growing device for all types of herbs.1. Seedo also comes with an App to help users monitor and control their plant growth. 1. Seedolab mentions on its website that its self-adjusting lighting system is patent pending. However, it fails to indicate its trademark status. Seedo applied for a trademark on July 20, 2017, and its application was granted on March 27, 2018. Despite this, Seedo does not display the ® mark on its website. (Check out Seedo’s website: https://www.seedolab.com/).

Another example is Tökr, an App that launched in 2017 that simplifies the cannabis shopping experience while also feeding data back to retailers. 2. Tökr software functions to bridge the gap between cannabis consumers and cannabis retailers. 2. By checking the USPTO website, it is knowable that Tökr applied for a trademark on September 29, 2016, and that its application was granted on May 9, 2017. However, even though Tökr has a registered trademark, it does not include the relevant marking anywhere on its website. (Check out Tökr’s website: https://www.trytokr.com/).

In addition, MoneyTrac Technology, a subsidiary of Global Payouts Inc., launched its blockchain-based banking solution, MTRAC in April 2018. 3. MTRAC provides a full-service bank powered by GreenBox blockchain technology. MTRAC’s target user is the unbanked, and specifically, the legal cannabis industry in California and other states that have legalized cannabis’ recreational use. 3. Much like Seedo and Tökr, MTRAC was granted a trademark, but failed to include any indication of this on its website. MTRAC applied for its trademark March 21, 2018. (Check out MTRAC’s website: https://www.moneytractechnology.com/).

Seedo, Tökr, and MTRAC are only three examples of canna-companies failing to properly mark their intellectual property. It is unclear why companies would opt not to include the ™ symbol after filing for a trademark. It is possible that Seedo, Tökr, and MTRAC thought the ™ or ® symbol would clutter the aesthetic of their respective logos. However, they should consider the legal implications, described above, of failing to include the proper marking. .

Ardent Cannabis is a company that invented the NOVA Decarboxylator, which is a precision decarb device for cannabis users who want to make their own edibles, tinctures, etc. at home. 4. Ardent Cannabis is using the ™ symbol after NOVA (as depicted below). 4.  

We conducted a search in TESS for the word mark “NOVA” which yielded no results in connection with Ardent Cannabis. This could be due to the fact that the mark may have been assigned to an individual or another company. (Check out Ardent Cannabis’ website: http://www.ardentcannabis.com/)

 

Main Takeaways For Canna-companies

As the cannabis industry moves from the gray market into the free, open market, it is important for emerging cannabis startups to adopt successful business strategies. Properly marking intellectual property may affect your cannabis company’s ability to receive damages from infringers abusing your innovation. If you do not properly mark your intellectual property, that lack of public notice may result in a significant decrease in damages you may receive in an infringement dispute.

Photo credit to https://www.seedolab.com/, https://www.trytokr.com/, and https://www.mtractech.com/about-us/.

 

SOURCES

  1. https://www.seedolab.com
  2. https://www.trytokr.com/
  3. https://www.moneytractechnology.com/
  4. http://www.ardentcannabis.com/