Understanding Trademark Infringement: A Cannabis and CBD Brands Case

If you’re a business owner in the cannabis or CBD industry, then you know that protecting your brand is essential. To protect your brand, it’s important to understand what trademark infringement is and how to avoid it. In this blog post, we’ll discuss what trademark infringement is, how to identify it, and some steps you can take to protect your brand. We’ll also look at a recent case involving two cannabis brands and learn from their mistakes. So, if you’re interested in learning more about trademark infringement and how to prevent it, then keep reading!

The Infringement Basics

Trademark infringement is a legal claim that is governed by Section 32 of the Lanham Act. Someone can be accused of trademark infringement if they use a mark (a name or symbol) that is the same or similar to a valid and legally protected trademark without permission, and this could cause confusion among consumers.

An infringer (defendant) uses the trademark without the consent of the owner (plaintiff). 

There must be a valid and legally protectable trademark. As long as the mark is registered on the principal register, it is presumed to be valid. If someone copies your trademark, it is their responsibility to prove that the trademark is not legally protected. If they can’t do this, you can sue them for copying your trademark.

To win a case against someone for using your trademark without permission, 

1. They must have used a similar mark and the user must have affected interstate commerce. 
2. There must be a likelihood of confusion amongst consumers. 
3. There is unauthorized use of a mark that is similar or the same as the plaintiff’s mark.

Each federal circuit analyzes the likelihood of confusion based on the DuPont factors. These are a precedent often used in the federal circuits and lays out 13 factors that are essential to a complete analysis of possible confusion.

CBH International vs Uncle Bud’s Grow Shop Corp.

CBH International, the plaintiff, in this case, owns the federally registered trademark Uncle Bud’s Hemp. The defendant, Uncle Bud’s Grow Shop Corp., appears to provide goods and services similar to a garden center while developing a niche in cannabis grow operations. The shop sells merchandise with the name “Uncle Bud’s” on the label on t-shirts, hats, etc.

The courts will apply the DuPont factors to determine whether there is a likelihood of confusion between Uncle Bud’s The Grow Shop, and Uncle Bud’s CBD and hemp provider.

The DuPont factors were created to help the course determine if there was customer confusion and thus trademark infringement.

As a reminder, to receive a federal registration for cannabis or CBD-related brands, your product must contain less than 0.3% of THC and must not explicitly imply the sale of cannabis. 

There are up to 13 DuPont factors, but we’ll only look at seven that are most important. The courts often give more weight to these factors during their analysis.

          1. The similarity or dissimilarity of the marks in their entirety as to appearance, sound connotation, and commercial impression.

The correct way to test this is not by comparing the marks side-by-side. The people who see the marks will need to think that the two companies are related. This is called the commercial impression. Both companies used the name “Uncle Bud’s” so people would likely think they are related.

          2. The similarity or dissimilarity and nature of goods and or services as described in the application or registration or in connection with which a prior mark is in use. 

It’s not necessary that the products or services of the parties be similar or even competitive to support a finding of the likelihood of confusion. If two products or services are related in some way, and if the circumstances surrounding their marketing are confusing, People will likely mistake one for the other.

Here, the court could determine that the defendant’s mark concerning its products is related to the CBD products sold under the plaintiff’s mark. Consumers may believe the t-shirt and grow shop emanates from the federally registered CBD brand. 

          3. The similarity or dissimilarity of established likely-to-continue trade channels.

When registration or application does not contain limitations, describing a particular channel, trade or class of customer, the goods or services are assumed to travel in normal channels of trade. With an increase in the availability of goods and services across multiple channels of commerce, this factor will likely help the plaintiff. 

          4. The strength of the plaintiff’s mark. 

A mark’s strength is measured both by its conceptual strength, distinctiveness, and its marketplace strength. In this case, CBH can claim its mark is nationally known, as products are sold on multiple online platforms and retail stores. 

          5. The extent of potential confusion.

The board and federal circuit are not worried about theoretical confusion, deception, or mistake in insignificant situations. They are more interested in what is practical in the commercial world. In this world, the goods or services are marketed to and purchased by significant numbers of people. So if there is potential for confusion, it cannot be considered insignificant.

Here, the court will likely lean on the plaintiff’s side again. Due to the practicalities of the commercial world in the cannabis industry, there’s a high likelihood that the marketing of goods by both the plaintiff and the defendant would overlap and cause potential confusion.

          6. The nature and extent of any actual confusion. 

Although it is not necessary to show that people are confused, if there are any reports of confusion it would be very strong evidence that there is a high likelihood of confusion. If there are no reports of confusion, this only matters if the applicant or respondent has been using its mark for a long time in the same markets as the other company’s mark.

          7. The sophistication of consumers.

When products are relatively low priced and subject to impulse buying, the risk of likelihood of confusion is increased because purchasers of such products are held to a lesser standard of care. 

Other factors, such as the defendant’s intent, and inference of bad faith require something more than mere knowledge of a prior similar mark or establish fact proving the effective use will be also under consideration, 

You can avoid infringing on someone else’s trademark by choosing a mark that is suggestive (rather than descriptive), and by doing a comprehensive search before investing in your trademark. Infringement on someone else’s trademark can be very costly, so it is important to get help from an attorney to make sure you are taking the right steps.

Trademark infringment is a complex subject matter to navigate. The right attorney, however, can make all the difference in protecting your trademark from infringement or enforcing your trademark rights against an infringer.

As you can see, there are many factors to consider when determining trademark infringement. While we cannot provide legal advice, if you believe that someone is infringing on your trademarks, we encourage you to reach out to an intellectual property lawyer for more assistance. And remember, the best way to avoid any potential trademark issues is to file for and protect your trademarks as soon as possible. If you have any other questions about trademarks or would like to schedule a discovery call with our team, please don’t hesitate to contact us.

If you would like to hear more about trademark infringement and see if I can just be of any assistance to you, please contact us for a discovery call to have your questions validated and answered. 

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