ARLINGTON, Wash. – Marijuana company Podworks, based in Arlington, was hit with the state’s first-ever marijuana trademark infringement lawsuit over their product Top Shelf Clear.
Competition is fierce in Washington's highly lucrative $1 billion per year marijuana market. With so many different tinctures, topicals, and edibles, establishing brand loyalty is critical.
"We take a lot of pride in the proprietary nature of what we do," said Chris Barone, CEO of Headspace International. "We've got a lot of time and money invested into what we're doing."
Headspace is a multi-million dollar producer of marijuana oils based in southern California. It's product "The Clear" is sold in seven states, and their brand well regarded.
But the company said another marijuana producer is illegally using The Clear's name by simply removing the word "the."
"Anyone who is using this word 'clear' needs to use something different. That's our name," said Headspace CFO David Sparer.
He compared it to creating your own soda and calling it "Pepper."
"There's no soda named Pepper, but I bet Dr. Pepper is going to be really upset with you for doing that,” he said. “The reason why they're upset is because their brand is known. When you buy that brand you know what you're getting."
Headspace holds a state trademark for The Clear. The company is now suing its Arlington-based counterpart Podworks for trademark infringement. It is believed to be the first such suit ever filed in the state of Washington.
"This is a landmark case that will set precedence for the entire cannabis industry," said West Seattle attorney Eric Harrison. "Trademarks serve as identifiers for consumers. The cannabis industry must abide by trademark laws."
Podworks owner Thomas Worth said his product is called "Top Shelf Clear," not just "Clear." He has a legal trademark for that name and doesn't plan to give it up
His attorney, Peter Smith, believes the suit is a ploy for an out-of-state company to weaken local businesses and force its way into a new market.
"Washington lawmakers have worked hard to make sure that the recreational cannabis industry remains local,” Smith said. “There are federal issues with permitting out-of-state investments and out-of-state actors to influence this local industry. Many foreign companies try to skirt these laws by using branding and trademark law to participate and profit indirectly from the Washington cannabis industry. To me, that signals an out-of-state shakedown. Podworks will vigorously defend itself in this case."