An interesting Bloomberg article came across my desk a couple weeks ago called, “CBD Craze is Creating a Trademark Problem for a Coffee Brand in Maine.” The article raises a couple of important issues related to the trademark requirement of distinctiveness, as well as the lengths to which one can stretch their trademark protection.
The article recounts a coffee shop and wholesale coffee company in Maine called Coffee by Design, that ultimately adopted the acronym for its name, CBD, as its trademark. Coffee by Design appears to have filed for trademark protection of CBD for “coffee” and “coffee shops” in 2009. But with Maine’s legalization of marijuana in 2016 and the rapidly growing popularity of CBD, customers began to get confused, thinking that Coffee by Design had CBD, and that CBD products sold throughout Portland, Maine were sourced from Coffee by Design. According to the owners of Coffee by Design, “the [CBD trademark] filing prevents others, nationwide, from using the term CBD for coffee products and coffee shops,” and that they are “well within [their] rights to prevent others from using the term CBD as a trademark in relation to coffee and coffee shops.”
The wording of that last statement is key: a trademark owner can prevent others from using the same mark “as a trademark” in relation to the same goods. The issue that Coffee by Design will face, however, is that other coffee shops are generally not using CBD as a trademark, but as a descriptive term to describe an ingredient added to their beverages. Trademark infringement will be a tough claim to sustain if the shop can’t show that others are using the term CBD as a trademark: in fact, it is well within the rights of others to use CBD to describe cannabidiol. As a matter of public policy, trademark law is not designed to allow trademark owners to prevent others from using descriptive terms in a descriptive manner. This also means that a coffee shop selling CBD-infused coffee (or any other CBD product) could not obtain trademark rights to exclusively use “CBD” on their goods, because such a mark would be deemed merely descriptive.
As we have noted before, there is a spectrum of strength when it comes to trademarks. The distinctiveness, or strength, of a mark will determine both how well the mark performs from a marketing and branding perspective, as well as the level of legal protection to which it is entitled. When a mark is highly distinctive, identifying the owner of the mark as the source of the goods sold, the mark is strong. And when a mark is not inherently distinctive, or when a mark is the same or very similar to one already used by others, the mark is weak. Here are the types of marks on the spectrum, from strongest to weakest:
- Fanciful Marks: These marks are inherently distinctive and consist of a combination of letters with no meaning; they are invented words. Some examples of famous fanciful marks are EXXON and KODAK. These marks can be more difficult from a marketing perspective initially, because the public must be educated through advertising before they will associate the owner’s goods or services with the mark.
- Arbitrary Marks: These marks are composed of a word or words that have a common meaning, but have no relation to the goods or services to which the mark is applied. Perhaps the most famous example of an arbitrary mark is APPLE, used on computers. As with fanciful marks, these marks are highly distinctive.
- Suggestive Marks: Suggestive marks hint at or suggest the nature of a product without specifically describing the product. An example of this type of mark is AIRBUS for airplanes. These marks can be appealing from a marketing perspective, because they require less education of consumers than arbitrary or fanciful marks, but they are also typically entitled to less extensive legal protection.
- Descriptive Marks: These marks are comprised of words that actually describe the goods or services provided; descriptive marks are too weak to function as a trademark and cannot be registered. Note that it is possible to register a descriptive mark if it has obtained secondary meaning due to use in commerce for some years – in the nascent cannabis industry, however, it is unlikely many marks would meet these requirements.
- Generic Words: These words and phrases are so inherently descriptive of a product or service as to be incapable of functioning as a trademark; they are the common names of the product or service in question, and cannot be registered.
Perhaps Coffee by Design was unaware in 2009 that CBD was one of the cannabinoids found in cannabis and therefore could not have anticipated a future in which CBD coffee was a thing. But this is a great lesson in why choosing a distinctive mark (and being realistic about the protection your mark will afford you) is critical for any business, including those in the cannabis industry.