Intellectual Property in the Cannabis Industry

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Kenneth C. Foltz, Sr.

Partner

The conflicting nature of federal versus state laws regarding the legality of cannabis, both for medical and recreational purposes, can cause complications for those seeking patents, trademarks, or other intellectual property protections for their business or ideas.

Leech Tishman’s intellectual property attorneys can provide comprehensive guidance to cannabis companies, including those that grow, manufacture, distribute, or sell cannabis, regarding intellectual property matters and considerations.

Our intellectual property attorneys have assisted our cannabis clients with addressing complex issues in

  • Copyrights
  • Licensing
  • Marketing and branding
  • Patent registration and prosecution, including cannabis compositions, drug formulations, methods of preparation, or specific plant patents
  • Trade secrets
  • Trademarks
  • In this rapidly growing and ever-changing industry, it is critical to have a team available to guide clients in all aspects of the law.

Patents in the Cannabis Industry

There are four major categories where a cannabis grower or processor might be able to file a patent for the cannabis product or business:

  • Cannabis compositions or drug formulations
  • Methods of preparation
  • Characterization of the cannabis compounds in terms of how they engage with human endocannabinoid receptors
  • Medical Marijuana products and processes, specifically, methods of treating diseases with cannabinoids
What about my cannabis plant? Can a plant, or a particular strain, be patented?

Plants can be patented in two ways: plant patents or utility patents.

Plant Patents

Plant patents are focused on a single “parent” plant and its direct descendants. Obtaining a plant patent ensures the inventor can exclude others from reproducing the plant, and from using or selling the plant or any of its parts. Patent protection does not depend on whether a substance is living or nonliving. However, the inventor must prove that they have altered the plant to the extent the resulting invention can be deemed a “nonnaturally occurring substance.”

Under plant patents, there is also the opportunity to patent specific strains of cannabis. Again, the inventor would have to prove they discovered, or created via growing processes, a strain that is not naturally occurring, and different from other existing plants.

Patenting certain strains may also apply if the inventor creates a formulation designed for more efficient use in food, beverages, or medicine.

Utility Patents

Utility patents may be granted to anyone who invents or discovers a new and useful process, machine, article or manufacture or composition of matter; or a new and useful improvement of these. In order to be granted a patent, the invention must be:

  1. Useful – it has a purpose
  2. Novel – it was not previously available to the public. It must also possess one or more differences over the most nearly similar thing already in existence.
  3. Non-obvious – the difference between this invention and the most nearly similar one must be differences non-obvious to a person with an ordinary skillset in that industry. For example, a change in size or color is considered an “obvious” difference and therefore note patentable.

Utility patents are much stronger in the Cannabis industry. A utility patent could be filed regarding a specific plant, a formulation or substance, or a growing or manufacturing process.

Trademarks in the Cannabis Industry

A strong trademark is one of the best ways a business can effectively market and protect its brand. However, businesses in the cannabis industry face unique challenges to protect their trademarks. Cannabidiol (CBD) and tetrahydrocannabinol (THC) are both components that occur naturally in the Cannabis Sativa plant. CBD is non-psychoactive; THC is psychoactive. CBD can be extracted from hemp plants or cannabis plants, both of which fall under the scientific definition of Cannabis Sativa.

Currently, the federal Controlled Substances Act (CSA) prohibits manufacturing, distributing, dispensing, or possessing certain controlled substances, including marijuana. Until recently, the CSA placed all Cannabis Sativa plants, whether hemp plants or cannabis plants, under the legal definition of marijuana, and thus prohibited all goods that contained CBD or THC derived from Cannabis Sativa. That changed when the Agriculture Improvement Act of 2018, also known as the Farm Bill, amended the legal definition of marijuana to exclude hemp containing no more than 0.3% THC on a dry-weight basis, and thus lifted the federal ban on CBD derived from hemp.

Currently, the illegality of cannabis under the CSA precludes the registration of trademarks associated with the sale of cannabis products with the United States Patent and Trademark Office (USPTO). While recent federal legislative activity may remove of cannabis from the CSA, at this point, cannabis-related trademarks are limited to protection through state registration and common-law rights, or creative federal registration involving intent-to-use applications and ancillary non-cannabis goods that may also be used in connection with sale of cannabis products. Despite the current federal law, business have some options to protect their trademarks.

How should I describe my goods or services?

While the USPTO has issued trademarks for goods and services tangentially related to marijuana, the closer the description of goods is to the sale or distribution of marijuana, the less likely it is that the USPTO will allow the application. When drafting, some applicants attempt to circumvent the requirements by describing their goods in generic terms (e.g., “herbs” or “agricultural goods”). However, the USPTO examining attorney is likely to discover the true nature of the goods. The goods described in an application must be the goods actually sold in interstate commerce and not violate federal law.

When do I file my application?

As early as possible – even before applying for a local or state license.

  • Priority is based on the first to use the trademark.
  • Early filing establishes priority of use of the trademark over competitors with similar trademarks who use their trademarks after you file.
  • Despite the federal position on cannabis trademarks, it is possible to file a federal trademark application based on an intent to use.
What is the advantage of filing a trademark application?

If a bona fide intent-to-use trademark application in lawful commerce proceeds to registration (after proof of use), the law gives the applicant constructive use retroactive to the initial application filing date. Additionally, once the application has been submitted, the applicant has time (i.e., three years) in which to submit proof of actual use of the trademark. This timeframe can be an advantage to an applicant in that if (and likely when, based on recent proposed federal legislation) the current conflict between federal prohibition and state regulation is resolved in such a way as to make the applied-for goods or services lawful even under the CSA.

What if a competitor files for a similar trademark after I do?

The USPTO will suspend the later-filed application to see if your application proceeds to registration.

If your application proceeds to registration, then registration of the later-filed application will be refused. The only recourse available for the later applicant is to oppose your application based on its actual use prior to your filing, or later petition to cancel the registration based on actual prior use to the filing date of your application.

Do I need to do a pre-filing search?

A pre-filing trademark search is recommended to determine whether anyone has already used or applied to register the mark or one confusingly similar to it. Non-cannabis trademark owners are suing cannabis businesses for infringement of similar trademarks (e.g., Kiva Health Brands LLC, a maker of natural foods and health supplements, versus Kiva Brands Inc., a maker of cannabis-infused chocolate and other “edibles”).

What about legal concerns for the cannabis in my product?

The proposed use of the trademark must still be legal.

  • CBD from marijuana is illegal.
  • The legality of CBD from hemp will depend on the THC level being below the legal limit.
  • The Food and Drug Administration (FDA) also regulates CBD products that “go in the mouth.”
  • For example, bottled waters infused with CBD.
Can I use the mark on apparel?

Generally, cannabis marks on apparel can be registered. As a practical matter, if you can secure a registration for peripheral goods and services, you may be able to keep others from infringing your marks even in connection with CSA-prohibited goods and services.

What are alternatives to federal (USPTO) registration?
  • State Registration: USPTO registration aside, those states in which marijuana and marijuana distribution goods and services have been legalized probably will grant trademark registrations.
  • Bundling Cannabis Products with Ancillary/Peripheral Non-Cannabis Products: A business that manufactures, produces, or sells both cannabis-related goods and non-cannabis products may be able to register a trademark associated with the non-cannabis products that can also be used in relation to the cannabis-related goods.
    • For example, a company that manufactures a body lotion, including a cannabis-infused version and a non-cannabis-infused version, may be able to register a trademark associated with the non-cannabis-infused version with the USPTO. The business could then use the trademark in relation to both versions of the lotion. However, a few token sales of non-cannabis products in connection with a product is unlikely to suffice.

Copyrights in the Cannabis Industry

While copyrights do not extend protection to a word or phrase, such as a business name, they do extend protection to original works of art, which can include an artistic logo or design mark.

Some businesses have filed for copyright protection for “ancillary” aspects of their cannabis business, including product descriptions, packaging, instructional materials, photos, and website content.