Intellectual Property Basics for Cannabis

There is no denying that the cannabis industry is growing rapidly, with many states allowing medicinal and/or recreational use. As a result of this decriminalizing of cannabis, interesting and innovative brands have emerged. Like other brands, cannabis brands are looking for ways to protect their intellectual property (“IP”). However, unlike other brands, cannabis is not legal on the federal level, and not every state has enacted laws permitting medicinal or recreational use. Even if a particular state has enacted legislation permitting medicinal and/or recreational use, those laws differ from other states’ laws on the subject. This creates a very confusing legal environment to navigate for cannabis brands trying to protect their IP. This article offers a brief survey of the available IP protections for cannabis brands.

Trademark/Trade Dress

It is possible for cannabis brands to obtain trademark/trade dress protection for marks that relate to cannabis, but not to products that contain cannabis. For example, in Trans-High Corporation Inc. v. Sharik Kerawala et al., No. 4:14-cv-00752 (E.D. Texas 2014), High Times magazine, a popular marijuana lifestyle magazine, sued a Texas business for trademark infringement stop its use of “High Times Lifestyle” and “High Times Smokeshop” in association with marijuana-themed retail and online stores. The court issued an injunction and damages in favor of High Times in 2015.

However, the United States Patent and Trademark Office (“USPTO”) does not permit registration of products that contain cannabis. While cannabis strains and other cannabis products have custom effects that may identify their source in the eyes of the consumer, the Lanham Act Section 1052 (a) bars registration of immoral or scandalous materials including cannabis, which is still a Schedule I drug under the Controlled Substances Act. Even though marijuana trademarks cannot be registered with the USPTO, it is advisable for cannabis brands to perform due diligence to ensure that their mark does is not similar to another mark in the cannabis industry because of state trademark registrations and common law trademark rights as discussed below.

One option for cannabis brands and dispensaries is to register your mark with the state in which you conduct business, assuming your brand is sold in a state in which cannabis sales are legal and that your state allows registration. This is less expensive than federal registration, but state registration only protects a trademark in the particular state in which you register. However, it is important to be aware that many states have similar morality clauses as the Lanham Act and therefore will not allow registration. Moreover, famous strains and other cannabis products could be so common that they are considered generic, which leaves them unprotected under trademark law.

Another way to protect your mark is to simply use the mark in commerce, which affords you what is called common law rights. These trademark rights are limited to the geographic area in which they are used in business. It is important to maintain detailed books and records of usage to negate or assert any claims for or against your common law trademark rights.

Copyright

Copyright registration is another option for cannabis brands to protect their IP. Unlike federal trademarks, the Copyright Act contains no prohibitions on the subject matter of the works subject to copyright protection. Creative works used by cannabis brands such a illustrations or photographs can be protected by copyright law. This adds an additional enforcement mechanism and could entitle you to statutory damages under the Copyright Act.

Patent

The future is unclear as to whether patents can protect cannabis strains, methods of growth and assembly. The USPTO has repeatedly rejected cannabis related filings for similar reasons as the Lanham Act, namely because they are scandalous or immoral. However, the USPTO has issued patents for smoking devices used for marijuana and the Patent Act, like the Copyright Act, does not contain a morality clause. Companies are already rushing to file patents in this cutting edge area, examples of which are renowned cannabis cultivator Ben Holmes’ Otto II strain. However, if history tells us anything, the USPTO will likely reject these cannabis related patents for the reasons they have in the past, namely that they are scandalous or immoral.

Trade Secret

Until the USPTO takes a clear stance on cannabis patents, the best way to protect cannabis products and methods of growth is trade secret law. Like state trademark registrations, state law governs trade secrets. Trade secret law protects information of economic value that is not generally known or readily ascertainable to the public, as long as you have taken sufficiently reasonable efforts to keep a secret. There are no formal applications; you just need to take reasonable efforts to keep the information a secret. Employee confidentiality agreements and NDAs are examples of ways trade secret law can protect cannabis brands.

If you are involved with the cannabis industry and would like to discuss protecting your IP, please give us a call at 650-271-9395, or email us at info@blgtrademarks.com.

Written by: Matthew Trejo

Disclaimer: This article discusses general legal issues and developments. Such materials are for informational purposes only and may not reflect the most current law in your jurisdiction. These informational materials are not intended, and should not be taken, as legal advice on any particular set of facts or circumstances. No reader should act or refrain from acting on the basis of any information presented herein without seeking the advice of counsel in the relevant jurisdiction. Bend Law Group, PC expressly disclaims all liability in respect of any actions taken or not taken based on any contents of this article.