While trademarks for cannabis products and many accessories are ineligible for federal trademark protection (because such goods are still unlawful at the federal level), the savvy cannabusiness operator should nevertheless approach their branding strategy thoughtfully and engage in some investigation into potential trademark conflicts before adopting a new brand or business name.

Importantly, trademark conflicts are not restricted to simply using the identical mark of a competitor. Instead, they generally turn on whether use of the mark is “likely to cause confusion” in the marketplace. In other words, if it is likely that consumers will assume a relationship between you and the senior trademark owner.

Earlier this year, for example, Woodstock Ventures LC filed suit against Woodstock Roots, LLC on the basis of trademark infringement. Since 1969, Woodstock Ventures has produced the annual WOODSTOCK®-branded music festival in New York. In the intervening years, the company has expanded its offering to include audio records, movies, clothing, and other promotional merchandise, all offered under the WOODSTOCK brand. It holds federal trademark registrations for these goods and services, all of which, on their face, have no obvious relationship to cannabis goods. However, and as Woodstock Ventures readily concedes and, in fact, boasts of in its complaint, “the WOODSTOCK® brand has become strongly associated with recreational marijuana.” In fact, Woodstock Ventures claims that it has already begun engaging in the commercial sale of recreational cannabis in a few states, including Oregon, Washington, California, and Colorado.

In its lawsuit against Woodstock Roots, Woodstock Ventures complains that, not only has Woodstock Roots adopted the WOODSTOCK® trademark to brand its cannabis-related products, but it has promoted a false association with the WOODSTOCK® music festival by promoting its goods as celebrating the 50th anniversary of the famous concert and using a logo featuring a pot leaf draped with the words “since 1969” (despite, as Woodstock Ventures notes, the fact that Woodstock Roots was formed very recently). Woodstock Ventures argues that it is entitled to an injunction, as well as monetary damages, because Woodstock Roots is essentially trying to profit off of Woodstock Ventures’ reputation by using the WOODSTOCK® trademark in a way that suggests Woodstock Roots is authorized by or related to Woodstock Ventures.

As of this blog post, Woodstock Roots has not yet answered the complaint; it has until mid-June to do so. As Woodstock Roots’ website remains active, there are no obvious outward signs that it intends to quickly resolve the dispute by rebranding. If it does not settle this matter – which typically involves some type of agreement to rebrand or restrict use of a trademark – it will likely need to invest significantly in defending the trademark lawsuit. Both lawsuits and rebrands can be not only be expensive, in terms of direct costs, but also disruptive to a business. To avoid these types of “back end” costs to address a problem, cannabusinesses are well-advised to conduct some searching before use. Skipping such can be penny wise, but pound foolish.