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Don't let your marijuana intellectual property go up in smoke

Cannabis has become an attractive industry for entrepreneurs as more states legalize its use for medical purposes, as well as a recreational drug. As a result, protecting brands, processes, trade names, logos and other intellectual property has become a more critical issue within the cannabis industry.

Cannabis is now legal in some form in 33 states and the District of Columbia for medical purposes. In November, Michigan became the 10th state in the U.S. to legalize recreational use of marijuana, and many other states and municipalities have decriminalized possession of small amounts of marijuana. Last year, Canada became the second country in the world to approve cannabis nationwide for recreational use, although medical cannabis has been permitted since 2001.

"Even as states come fully on-board with legalization, this is still very much the Wild West," Josh Camitta, co-founder of MJ Arsenal, a Colorado-based cannabis accessories manufacturer, recently told Green Entrepreneur. "With the chaos that comes standard in any Wild West scenario, it provides opportunity to those who have either created, or are looking to create, the next consumable, apparatus, tool or process. IP will eventually become a land grab as we see in other, more established industries."

With broader acceptance of cannabis and recreational marijuana a new industry has emerged, bringing with it a surge of innovation, development and commercialization opportunities. Scientists continue to investigate therapeutic properties of the plant's non-psychoactive components, and pharmaceutical companies are jumping on board to develop (and protect) cannabis-based formulations. On the recreational side, there are marketing and branding opportunities for growers, dispensaries, and accessory manufacturers.

Federal Laws Add Complexity

Protection of technology and brands related to cannabis at the Federal level raises several logistical and ethical issues, since marijuana is still considered a Schedule I drug under U.S. Federal law.

Nevertheless, in 2018 almost 40 patents were issued by the U.S. Patent and Trademark Office (USPTO) containing the terms "cannabis" or "marijuana" in their summaries. In October, New York-based Axim Biotechnologies Inc. was granted a U.S. patent for a cannabis-based treatment for irritable bowel syndrome. The same company was also granted a patent recently for toothpaste and mouthwash compositions containing cannabinoids. At the end of December, Colorado-based Wreefs, LLC was granted a design patent for a decorative artificial marijuana wreath. In fact, a search of USPTO records reveals almost 4,800 U.S. utility and design patents that have issued since 1976 referring to cannabis or marijuana (although many of them do not actually relate to cannabis or marijuana per se). Technologies range from cannabis-based compositions and purification processes, to plant growing methods, new cannabis plant varieties and growing techniques, cannabinoid delivery devices, smoking accessories, and child-proof containers for storing marijuana.

U.S. Federal Trademark protection in the cannabis industry is a confusing matter. This is because Trademarks are granted for marks associated with goods or services used in commerce, and more specifically goods or services that can be lawfully used in commerce. Since cannabis and marijuana are illegal under federal laws, marks filed for illegal goods and services will be rejected by the U.S. Trademark Office. Although strategies exist to work around this technicality, examining attorneys at the Trademark Office are becoming increasingly savvy to applicant attempts at clever wording or other workarounds. In this case, applicants should not overlook registration of the mark with the appropriate state trademark registries in states where cannabis is legal. Further, marks can still be registered for ancillary goods or services that are legal, such as hats, T-shirts, and other apparel.

Patents do not run into the same problems, because there is no requirement under U.S. Patent law that the patentee demonstrate it is actually using the patented item or process. Further, the concept of "moral utility" was long ago abandoned by the U.S. Patent Office and courts. Thus, initial hurdles for granting such patents are lower. However, many have speculated that trying to enforce such patents in federal courts may run into other issues where litigants have to comply with discovery requests and potentially expose their business operations in order to prove (or defend) their claims or obtain damages.

As with any industry, especially an emerging one such as cannabis, it's wise to be proactive with IP protection. The early adaptors in the entrepreneurial world of cannabis say hiring a knowledgeable IP lawyer who can help you save your space in patent, trademark, and copyright lines is worth the investment.

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