Federal law bars cannabis from patent protections – here’s why you should care
Having a great idea can change a person’s life. Steve Jobs had the idea for Apple while working in a garage, propelling himself from a college dropout to a tech visionary. To this day, the company protects its phones, laptops, and other technology from imposters through patents, copyrights, trademarks, and trade secrets–also known as intellectual property (IP).
The U.S. Patent and Trademark Office (USPTO) is a federal agency that approves and manages that half of IP, like Apple technology. Because the office is federally operated, cannabis brands have been unable to obtain patents or trademarks. Some ponder what effect this facet of state-legalized commerce has on the end consumer.
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Lawyer and patent agent David Wood, Ph.D., general counsel and chief legal officer for Psygen Industries Ltd., represents Canadian cannabis clients in his private practice at R-Group Legal. Wood is well-studied in American IP law and broke it down for GreenState.
“Generally speaking, registered intellectual property rights either protect branding (trademarks) or technology (patents),” Wood shared. “Trademarks and patents are primarily federally administered. Briefly and generally, patents can be issued but not enforced in relation to state-regulated markets, and trademarks can be neither registered nor enforced.”
Do cannabis brands need patents and trademarks?
IP covers literary compositions, artistic works, inventions, designs, symbols, names, images, computer code, and similar concepts and creations. In cannabis, this could cover brand names, logos, edible formulations, cultivation tech, consumption device advancements, and more. With larger issues like heavy taxation afoot, some wonder if worrying about IP is necessary.
Clark Wu is a partner at Bianchi & Brandt, a Scottsdale, Ariz. law firm that specializes in IP, cannabis, corporate law, and related sectors. Wu weighed in with GreenState about how some players work around current barriers.
“To get around these issues, cannabis companies often apply for limited federal IP protections under ancillary services or business practices unrelated to cannabis,” Wu explained. “For example, a cannabis company may seek the protection of a product brand through a trademark for clothing instead of the product offering. Other companies may focus on obtaining limited state IP protections in their markets.”
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Even with these workarounds, many cannabis companies hesitate to bring copyright infringement to federal court. Doing so would require admitting to conducting federally illegal business on the record, but it is the final step of protection for a company hoping to protect its IP.
This is a headache at the very least for cannabis brands, but does it impact the end consumer?
Why does the consumer care?
Cannabis consumers navigate dispensary shelves with complicated labels and lists of additives to be aware of, adding the nuance of cannabis IP to the mix may be too much. So let’s break down the brass tacks of the consumer impact.
“If you restrict the rights of IP ownership, then you effectively reduce any incentive for businesses to address issues within their sectors and disrupt the status quo. The same can be said here for cannabis companies,” Wu revealed.
Research and development (R&D) into the efficacy of cannabis, safety and risk of consumption methods, and innovations in those areas may be stifled by the lack of patents and trademarks. The end result is a lack of product differentiation and slow advancements.
A lack of patent protection also brings imposters riding on the coattails of the original brand’s trust. These imitators sell products that look like a regulated brand but are made with unregulated products. This was a supposed root cause of the vaping lung illness outbreak from 2019 to 2020. Online retailers were rampant posing unregulated vape pens as well-known brands. The products were made with additives like vitamin E acetate which led to severe lung illness.
Vapegate, as it was called, is a worst-case scenario, but shows that a lack of patent and trademark availability may threaten public safety. At the very least, it hinders industry growth and innovation. People with great ideas in weed can have their innovations and million dollar plans stolen without IP protection.
Intellectual property is a nuanced area of law, though some aspects are straightforward. One thing is for certain, when it comes to cannabis, things may become far less confusing once the federal government reschedules the plant. Until then, companies will find workarounds or hope for the best for their hard-earned brands and product formulations.