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Intellectual Property: What IP Can Your Cannabis Company Protect?

You are here: Home / Intellectual Property: What IP Can Your Cannabis Company Protect?
March 12, 2019

There are still many parts of the cannabis market that feel unregulated: and intellectual property rights is one such area.

With the US cannabis market expected to reach $26 billion by 2025, it is of paramount importance that cannabis operators protect their IP: from proprietary cannabis strains to branding to design and technology, this increasingly competitive market demands that operators patent, copyright, and trademark their hard work

Read on for our guide to understanding the different types of IP protections and how you can begin to establish the right safeguards for your cannabis company.

What qualifies as IP?

Intellectual property refers to trade secrets or, most simply, an entrepreneur’s right to protect his or her original work.

Patents, trademarks, and copyrights are the most recognizable forms of intellectual property.

  • Patent: the exclusive right to make, use, or sell an invention over a certain period of time.
  • Trademark: the exclusive right to use a mark (logo or otherwise) in business with specific goods and services.
  • Copyright: the exclusive right to copy, make a derivative of, distribute, or publicly perform an original work.

What qualifies under IP rights can vary, and the conflicting regulations of the cannabis market can be difficult to discern what you should protect.

However, there are some standard best practices that cannabis entrepreneurs should follow – specifically, when it comes to protecting your brand, technology, cannabis strains, and business secrets.

Cannabis Branding and Trademarks

Because cannabis is still considered a Schedule I Drug, trademarking your brand is a little complicated.

Federal trademark protection can only be sought for something that is considered “lawful use in commerce.” Because cannabis is federally illegal, a federal trademark on cannabis is illegal.

To get around this, many cannabis entrepreneurs are trademarking ancillary products or services. Protect your cannabis-related products, such as those that support cultivation, consumption, or sale of legal medicinal cannabis.

Another strategy is to file an ITU that claims your intent to use a trademark in legal commerce in the future. Since ITU applications can last for up to three years, some entrepreneurs bet that the federal government will legalize cannabis on the federal level, thereby converting your commercial activity to a legal “use in commerce.”

Without a doubt, cannabis entrepreneurs should file a state-level trademark for their brand. Many states permit some form of trademark registration, even where commercial cannabis is not yet legal. The one drawback to a state-level trademark registration is that it will only be enforceable within the state borders.

Likewise, all cannabis businesses should file for a logo copyright. Copyright registration can help you protect your brand as the industry continues to grow. Register your copyrights online with the US Copyright Office for around $55.

Cannabis Technology and Patents

Cultivators who are interested in patenting their technology can do so with the US Patent and Trademark Office (USPTO).

A utility patent will protect your invention and exclude others from making, selling, or using it without your permission for up to 20 years.

Some of the technology or equipment a cannabis business might protect includes:

  • growing apparatuses,
  • cultivation methods,
  • extraction techniques,
  • chemical compositions,
  • smoking and vaping products,
  • software, and
  • cannabis plants.

To qualify for a patent, the USPTO will look at your application to make sure that it is a new, non-obvious invention.

These patents can be expensive – around $8,000 up to $50,000 depending on how many office actions you will receive from the USPTO– and there are certain provisions you must meet around when the invention is used publicly for you to make the utility patent application.

Learn more about the utility patent application here.

Cannabis Strains and Plant Patents

There are a few ways to protect your proprietary strain of cannabis.

  1. Utility Patents: as outlined in the previous section, cannabis plants may be protected by a utility patent when an entrepreneur can demonstrate a the plant has a specific chemical profile.
  2. Plant Patents: a plant patent can be applied for in instances of asexually reproduced plants. The invented strain must be new and non-obvious. The plant patent must be applied for within one year of the first sale – e.g., for a cultivator who sells a strain on March 1, 2019, they must apply for the plant patent before March 1, 2020. Plant patents are valid for up to 20 years.
  3. Plant Variety Protection Certificates: the USDA provides plant variety protection certificates to give owners exclusive rights to seeds of a new crop for 20 years. This option is currently not available to cannabis operators.

We strongly recommend protecting your proprietary cannabis strains. The patent process is involved, but as the market continues to grow, it will be crucial for you to differentiate your business from the competition. Don’t wait to protect your cannabis plants.

Cannabis Design IP

Design Patents and Copyrights are the two most common forms of protection for cannabis design IP.

Design may refer to the way a vaping device looks, software, or any artistic expression: a website, or t-shirt design, for example.

Design Patents protect the look of functional items – specific design elements or details of the way a product looks.

Think the home button of an Apple iPhone. Design patents last for 14 years and can cost up to $2500.

Copyright protection can be used for “artistic expression,” e.g. website design or cannabis-related products. Design patents are more broad than the copyright and therefore more easily enforced.

Protecting Your Cannabis Business Secrets

Last but not least, trade secrets are something every cannabis entrepreneur should aim to protect. This might include your customer list, business plans, or secret recipes that are older than one year and can’t be protected by a utility patent. Most states offer some way to protect your trade secrets by way of using:

  • Nondisclosure agreements with your employees
  • Online authorized and unauthorized data uses
  • Network security
  • Other on-site security measures

It’s best to speak to an attorney who can help you protect your business secrets depending on the size of your operation and the state in which you are working.

Click the "Get Started" button below to get in touch with our experts who can connect you with a competent attorney with industry experience.

 

 

Filed Under: Business