Protecting Intellectual Property In the Cannabis Industry
By Max Meade
In order for the cannabis industry to flourish, the continual development of new technology will be crucial to its success or failure. This could be in the form of new energy-efficient equipment, specialized pest control products or unique of innovative products that will add value to this industry. Let’s dive into the three forms of intellectual property and how they relate to the cannabis industry.
This is the legal right that grants the creator of an original work the exclusive right for its use and distribution. The original work can come in many forms (musical, dramatic, literary or architectural, along with others) and prevents others from copying the work without the consent of the creator. For this industry, copyright will come into play if an individual or business wants to protect their marijuana-content work. This includes cookbooks, grow guides or any other form of instructional materials. The caveat is that these works must contain a sufficient amount of creative and original content in order to qualify as copyrightable. Just like any other industry, these businesses need to be wary that they are not infringing on a current copyright.
A relevant case is Starbucks v. Hitman Glass and James Landgraf (2016). One of Hitman Glass’s products was a line of “Dabuccino” water-pipes that looked very similar to Starbucks’ popular Frappuccino, including the recognizable green straw and logo that—without close examination—could easily be mistaken for Starbuck’s logo. This lawsuit resulted in Starbucks being awarded $300,000, because they proved that the product hurt their brand and resulted in financial and reputational damage to their business.
Cannabis businesses need to be mindful that a copyright will protect the creator for anything drawn, painted, written or created on a computer. If another company uses their work and dilutes the market even a little, without permission of the creator, they will face copyright issues.
When you look at some of the most iconic brands in the world today like Apple, Google or Coca-Cola, you probably notice the symbol that accompanies them. That symbol lets everyone know that the image is trademarked and, according to the United States Patent and Trademark Office (USPTO): “A trademark is a word, name, symbol or device that is used in trade with goods to indicate the source of the goods and to distinguish them from the goods of others.”
For the cannabis industry, a trademark is necessary to differentiate a brand and ensure that it is not copied by a competitor. The cannabis industry needs to be cautious about infringing on another’s trademark. Take the 2014 court case of Tincture Belle v. Hershey: Tincture Belle replicated the design of Hershey’s iconic products along with labeling their products with names very similar to those of Hersheys’ brand (Hashees vs. Reeses, Dabby Patty vs. Peppermint Patty, etc.). Once Hershey’s caught wind of this, they contacted Tincture Belle and ultimately settled out of court with them. Tincture Belle agreed to destroy all of their edibles and remaining packaging. This is an obvious case of copyright infringement, which doesn’t understate the fact that the industry needs to take notice and be careful when they decide on branding.
Patents are unique in the fact that there are three different types:
Utility Patent: granted for the invention or discovery of any new and useful machine, article of manufacture, process, composition of matter or some sort of improvement.
Design Patent: granted for the discovery or invention of an original, new and ornamental design for any article of manufacture.
Plant Patent: granted for the invention or discovery, along with asexually reproducing any new and distinct plant variety.
Of those three types, the one that this industry needs to be very interested in is the plant patent, as it will allow cannabis breeders to apply for a patent on a specific strain that they develop. These patents are active for 20 years and will legally prevent others from using a specific patented strain without first receiving authorization from the patent holder. Only recently have growers begun to file for marijuana strain patents, but none have made it through the process yet; however, it is only a matter of time until that first patent is released. When this happens, cultivators need to be very cautious about the strains that they use because if they were to use a patented strain as a genetic parent, they would be committing patent infringement. Such a patent owner would have the right to sue, which would inevitably lead to a situation where those who grew the plants that contain the patented strain would be unable to distribute them and possibly would be required to have them destroyed.
Now, this does not mean that the industry doesn’t have to be wary of the other two patents—because if you are using machinery or a process that has been patented, you should consider ceasing those operations immediately. Take Connoisseur Concentrates, which was recently awarded a patent for their extraction machinery Mr. Extractor. On their website, they state “we now have a patent which the vast majority of extraction devices fall under. These include devices sold by manufacturers, those built at home and those being used by most.” This is a warning to the industry that if part of their operations includes extraction, they need to make sure that those operations don’t encompass any part of Connoisseur Concentrate’s patent or they risk receiving a cease-and-desist letter that could potentially lead to a lawsuit.
For the industry to continue on its current path, inventions and innovations to make the industry more profitable, efficient, and sustainable are vital. However, those who come up with new concepts and products must ensure that they protect themselves, their businesses and their ideas. These forms of intellectual property are what separate businesses from their competitors and add value to the business and the brand. According to the World Intellectual Property Organization (WIPO): “Intellectual capital is recognized as the most important asset of many of the world’s largest and most powerful companies; it is the foundation for the market dominance and continuing profitability of leading corporations.”
For those who have a copyright, trademark or patent, or have one pending, and would like to take the next step and obtain insurance for them, please reach out. We can further discuss this, as it could negate your need to pay defense and legal costs out of your own pocket.
Cannabis Insurance Advisor
Brown & Brown