Rich Pauls’ sports management company, Klutch Sports Group, reps over 70 athletes under $2 billion in contracts, including, of course, LeBron James. TIME dubbed KSG one of the world’s most influential companies in 2021. Last year, Forbes called it the fifth most valuable sports agency.
Which is probably why Paul was confused when, last August, he visited a downtown Cleveland marijuana dispensary with a similar name and profile design as the sports company he’d be running for the past 14 years.
One also called Klutch.
And it’s caused confusion in the marketplace while Klutch (the weed business) has attempted to leverage the reputation of Klutch (the sports biz), according to a trademark lawsuit filed in federal court this week.
“Klutch Cannabis has in bad faith adopted, used and built a business around the Klutch name,” the filing from KSG’s lawyers read, “all so that it could confuse customers into believing that Klutch Sports is somehow affiliated with its brand.”
Klutch’s use of black and gold, its crown logo, and its sans serif font are an “obvious and willful effort to profit from and divert the brand equity that Klutch Sports has built in the very same marketplace.”
Trademark suits involving a dispute over intellectual property typically revolve around two facts: when a brand first surfaced and the motivation its imitator had behind copying it.
Those kinds of lawsuits are increasing in recent years when it comes to the cannabis industry, which has gained a reputation for products playing off of notable brands like Nerds, for example. Wrigley, Tapatío and Haribo have brought trademark suits in the past few years against cannabis companies under the complaint of brand confusion. Just as Paul’s lawyers have alleged with Klutch Cannabis.
A representative for Klutch Cannabis declined to comment for this article. An email to KSG was unreturned as of Tuesday afternoon.
But the cultural overlap, intellectual property experts say, is why Klutch’s suit stands out. Both companies were formed in Northeast Ohio. Both use similar colors. Both spell Klutch with a k. Both peddle bold-styled merch.
The difference is that Paul’s agency did it first—about four years earlier, according to federal trademark filings and records kept by the Ohio Secretary of State.
“You look at the font similarity, the coloring. You really do wonder why they chose that,” Josh Gerben, a trademark attorney with Gerben IP, a firm based in Washington, D.C., told Scene. “Brands that associate themselves with youth and health don’t typically want to associate with [marijuana],” he added.
Court documents claim that KSG sent multiple cease-and-desist letters to Klutch Cannabis after Paul visited the downtown Cleveland store himself last August. It’s unclear whether or not Klutch responded.
On August 1, Klutch opened its sixth location downtown at 300 Prospect Ave., in the old Record Rendevous building, which was welcomed as revitalization of a Cleveland landmark that had sat dilapidated for decades. Klutch’s storefront, with its gold neon block letters and window-side turntables, was designed as a testament to store owner Leo Mintz’s rock and roll shop as it looked in the 1950s and 1960s.
A large percentage of high profile trademark suits don’t make it to trial, Gerben said, mainly due to the high costs of lawyer’s fees and the possibility of damages if a defendant were to lose in court.
Meaning it might be more worthwhile if Klutch were to start thinking of a major rebrand.
“I think the practicalities—that’s gonna be a large portion of their profits for a year,” Gerben said. “That’s when you start to say, ‘How important is the name, really?’”
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