Protecting cannabis brands in the late world

As the United States approaches potential federal marijuana reform, the impact of intellectual property in the cannabis industry is becoming a hot topic.

Navigating in fuzzy waters protected by IP has long been a challenge for cannabis operators, and federal legalization or rescheduling can bring opportunities and new complexities.

“It is important for brands to think about how to position themselves for future legal changes,” said Jabari Shaw, an attorney in Cincinnati’s office, who focuses on intellectual property development, protection and law enforcement.

Under federal law, cannabis remains a substance under Schedule 1, making federal trademarks of cannabis-related products unavailable, although some companies avoid using this problem by registering their trademarks on clothing products.

This has allowed businesses to rely on state-level trademarks that only protect their brands within the boundaries of states, although some companies like Cookies have federal trademarks on their smoking marijuana.

For companies like Sun Theory, manufacturers of dial-in glue, which means trademarking their brands is provided in every state they operate, which is a time-consuming and expensive process.

Sun Theory moved its headquarters from Denver to Austin, Texas in January, where co-founder and CEO Connor Aman was nurtured. However, the company maintains a strong business in Colorado, including farming facilities and 14 licensed retail locations.

“There is no silver bullet,” said Matt Melander, president of Sun Theory. “The best protection is to give the brand trademark in every state we enter and protect as much as possible through trade secrets.”

What is intellectual property?

Protecting the intellectual property rights of cannabis companies is complex with innovations that span planting technologies, product development and brand development.

From patents and trademarks to trade secrets and copyrights, each protection method offers unique benefits and plays a role in retaining the value of the brand and ensuring sustainable growth.

• patent: Protect new strains, planting technology and manufacturing processes and other innovations. Exclusive rights granted to the inventor for a limited time to prevent others from using or selling patented inventions without permission. Cannabis products cannot be trademarked at the federal level, but can be patented.
• trademark: Protect symbols, words and phrases that identify the brand. Federal trademark protection is limited to legal products and services, so cannabis brands often seek auxiliary product protection or rely on state trademark laws.
• Trade secrets: Protect confidential information that provides competitive advantages, such as growing techniques, recipes and business strategies. Protection requires security measures, limited access and confidentiality agreements to maintain confidentiality.
• copyright: Protect works such as logos, packaging designs, digital content and written materials. The illegality of federal marijuana does not affect copyright protection, which is a great tool to protect creative expression.

Each type of IP protection covers specific aspects of the cannabis brand, not a single type that protects everything.

Federal Trademark: Game Change?

Federal legalization can open the door to national trademark protection, an important advantage of cannabis brands that enable them to better protect their IP.

Corey Keller, owner of Bonanza Cannabis Co., in Colorado, highlights the challenges of the current system.

“You can’t have any marijuana-related trademarks associated with cannabis on federal trademarks. We have to open separate businesses for CBD and clothing lines to secure federal trademarks,” he said.

Keller’s strategy is to build federal trademarks using non-cannabis products such as cannabis-based goods and branded clothing.

“Marijuana is close enough to marijuana that we think it can rise in court,” Keller said.

However, this workaround requires creating completely independent entities with their own bank account, website and operations – an expensive and complex effort.

Reschedule the challenge

While rescheduling marijuana can alleviate some restrictions, this is not a complete remedy.

IP attorney Mary Shapiro said the U.S. Patent and Trademark Office (USPTO) historically rejected the application for direct reference to marijuana.

Even after rescheduling, the process of secreting a trademark may still be challenging.

“Legal requirements still create obstacles, and the USPTO’s ID manual lacks a description of cannabis and cannabis products,” Shapiro said.

When Shapiro represented Harborside, a pharmacy operator based in Oakland, California, she determined that protecting its educational materials would make more sense than trying to protect the brand.

“We are concerned about the benefits of bringing federal registration information, advocacy and education registration,” Shapiro said.

“You really want to sell marijuana registration, but you can’t understand it because it’s illegal.

“But the registration scores related to ancillary services have a significant benefit.”

Beyond Trademarks: Patents and Trade Secrets

For companies focusing on innovation, patents offer another avenue for IP protection.

Xiao emphasized the potential to patent novel strains, farming methods and manufacturing processes.

Patented plants are common in agriculture. Once a patent is obtained, no one can legally grow anything that belongs to a patent without the license of the patent holder.

“Patents are expensive, but they encourage innovation,” said Xiao. “As the industry grows globally, it will be crucial to protect these innovations.”

Prepare for the future

As the cannabis industry expects federal legalization, companies are taking positive steps to protect their IP. This includes ensuring state-level trademarks, utilizing auxiliary products as federal trademarks, and investment in trade secret protection.

“Planning federal legalization is like preparing for a game,” Shaw said. “When the starting gun goes out, you want to be ready.”

Melander said the best way to protect a brand is to have a trademark in every state in every state.

For cannabis operators, the road to IP protection is not simple. But with careful planning and proper legal guidance, they can position themselves as thriving in the post-Falicization landscape.

“It’s an inaccurate science, but you’ll try to stay ahead of the pack,” Melander said.

Margaret Jackson can be reached Margaret.jackson@mjbizdaily.com.