Cannabis Industry Searches for Federal Level Intellectual Property Clarity

  • Aug 17 2018
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  • Category: News

Despite the fact that the U.S. Patent and Trademark Office does not provide federal trademark registration for any products that include marijuana, it still grants the same for cannabis-related products.

According to Bloomberg Law data, over the last eighteen years, the U.S. Patent and Trademark Office has granted over 500 cannabis-related products. This includes products and devices that enable individuals to make and consume cannabis and products containing cannabis.

A Real Lack of Precedent

The lack of federal acknowledgment and protection muddies the waters, as it remains unclear as to how state intellectual property rights will stand in federal court should they be allegedly infringed upon. In the meantime, cannabis businesses continue searching for the best method of protection to protect their rights. Many companies are doing that through the utilization of state intellectual property laws and state fairness and competition laws. However, 30 U.S. states already allow for some form of cannabis sales. With legal cannabis sales estimated (by cannabis intelligence firm, New Frontier Data) to reach almost $10 billion in 2018 and almost $23 billion by 2025, it seems to be only a matter of time until the Federal government puts its own horse in the race. Twenty-two states have already legalized marijuana for medical use and nine states and the District of Columbia have gone a step further, approving not only medical marijuana, but for adult use as well.

A Race to Counter the Market

Bloomberg Intelligence Analyst, Kenneth Shea, believes that expansive federal regulation could serve to aid in U.S. revenue and put the United States in a position to put an international strong hold on the industry. (Canada is on track to legalize cannabis come October.) Shabnam Malek, co-founder of the National Cannabis Bar Association, feels that U.S. cannabis-related businesses should respect U.S. and global intellectual property rights very seriously. They “should have IP enforcement programs and set themselves up for the oncoming decriminalization and possible legalization on a federal level,” she said.

Strategic Partnerships and Complicated Litigation

Some businesses strategically align themselves with companies that have trademarks in order to piggyback off of them (e.g., pot-based beverages). However, businesses have to be cautious when using the same trademarks for edible products (e.g., chocolate with pot) due to consumer safety issues. Despite co-branding with other companies, the real issue comes from a lack of real precedent should a cannabis company pursue any litigation. Also compounding the issue is the fact that different U.S. states have different state laws, while the federal ban limits enforcement. Any patent application for a cannabis-related product that links back to a cannabis plant is treated as any other plant.

Litigation on the Horizon?

When it comes to trademarks and patents, cannabis companies want to receive the same treatment as any other company in any other industry. Fortunately for them, after a couple of years of increased patent applications, it seems that these issues are making their way closer to federal litigation.  It should prove interesting to watch how the treatment of cannabis changes.