Options for Protecting Intellectual Property Rights in the Cannabis Industry
You’ve worked hard to achieve a successful business by ensuring your company’s reputation and the quality associated with your brand are not compromised.
But if you are like many business owners in this industry and have yet to seek protection for your brand’s intellectual property, you risk having your company’s reputation tarnished by unscrupulous actors seeking to capitalize on your hard-earned reputation and your brand’s recognition with sub-par products that you have no control over.
This article discusses a few of the options available to cannabis businesses in California seeking to avoid this scenario.
A trademark is a brand or logo—essentially a word, phrase, symbol, or design— that identifies and distinguishes the source of one’s goods from another’s (e.g., Google, Apple).
A registered trademark gives its owner exclusive rights to use the mark in connection with the goods and/or services listed in the registration, and it creates a public record of those rights.
It also confers to the owner the right to prevent others from using confusingly similar marks on the same or similar goods or services.
Federal Trademarks Generally Unavailable for Cannabis Brands
Under U.S. trademark law, federal trademark registration can be granted only in connection with “goods and services lawfully regulated by commerce.”
To establish trademark rights, one must:
- Use the mark in connection with goods or services (legally) in commerce; and
- Register with the United States Patent and Trademark Office (USPTO);
Federal law’s prohibition of cannabis has made the registering of cannabis trademarks difficult, even for items ancillary to cannabis.
Because federal registration is not possible for most cannabis-related marks, the next best option is to register your mark with the California Secretary of State, which would protect your mark within the state.
A particularly shrewd strategy for manufacturers of cannabis-infused goods (and other businesses) who also offer ancillary goods or services that “do not touch the plant” is to file for federal protection for the ancillary goods or services while pursuing state trademark protection—though limited in scope to lawful use within California—for the cannabis-related goods.
Registering a Mark with the California Secretary of State
As of January 1, 2018, businesses are able to register their cannabis-related Trademark or Service Mark with the California Secretary of State’s office if:
- The mark is lawfully in use in commerce within California; and
- It matches the classification of goods and services adopted by the USPTO.
Lawful use in commerce will be key to obtaining a state trademark registration that will hold up in court, and provide you with adequate brand protection.
Though online filing is available and relatively easy to complete, to register in the state, you will first need to run a trademark search and make sure that your brand or logo actually qualifies for a trademark, particularly through use, in the state. To ensure you can even obtain a valid trademark involves a thorough search to establish that your brand or logo will not infringe any other trademark.
It is better to wait to file your trademark application until you are certain you will be able to meet all the legal requirements under trademark law than to quickly file and have your registration be subject to cancellation. It is thus critical to engage with an experienced trademark attorney to ensure that your application is viable before filing.
Moreover, because eligible marks must be lawfully used in commerce within California to be eligible for registration, applicants must ensure that their marks are used pursuant to a valid cannabis industry license, and that an applicant’s products comply with all applicable regulations prior to filing an application for registration to avoid potential invalidity.
Once a license is obtained, you must further show that you’re making actual, bona fide use of the marks on your products in the stream of commerce—meaning customers identify you by your brand when purchasing your goods or services in the marketplace.
Copyrights are another form of intellectual property and are different than trademarks. While trademarks protect words, phrases, symbols, or designs that identify the source of goods or services of one party and distinguish them from another’s, copyrights protect original works of authorship.
The Copyright Act contains no prohibitions on the subject matter of the nature of a work subject to copyright protection and federal protection has been granted to cannabis-related content (e.g., grow guides, cookbooks). The primary limitation to protection under copyright law is the degree of originality of a given work—a very low bar.
For cannabis brands, copyright protection is available for such things as text and artwork on logos, labels, product tags, packaging, instructional materials and ornamental designs as long as they contain sufficiently original and creative content. Additionally, the design aspects of “useful articles” are protectable.
A copyright exists from the moment a work is created, but though registration of your copyright with the U.S. Copyright Office is not required, you must register your copyright if you intend to bring a lawsuit for infringement of your work.
Additionally, registering your copyright puts the public on notice that you are claiming rights in the copyrighted work, and registered works may be eligible for statutory damages and attorney’s fees in successful litigation.
A patent is a property right granted by the USPTO to inventors for novel devices and inventions (e.g., a water pipe, extraction method, or cannabis variety). It grants inventors “the right to exclude others from making, using, offering for sale, or selling the invention in the United States or importing the invention into the United States.”
Plant patents provide some protection with respect to the realm of agriculture. In August 2015 the USPTO granted the first plant patent on cannabis, for a variety with a “unique terpene profile and specific cannabinoid chemotypes.” The advice of a patent attorney should be sought for those interested in patenting a plant’s unique genetics.
For inventions that fall outside the realm of defined intellectual property like patents, trademarks, and copyrights, trade secrets can work to provide legal protections that allow a company to maintain its limited monopoly rights. Trade secrets never expire, unlike patents and plant breeders’ rights, and require only operational confidentiality rather than intensive and expensive filings. This means that as long as you prevent disclosure (by suing for injunctions when leaks occur), you protect your invention.