5 Ways to Protect Your Marijuana Brand
As the legalized marijuana industry booms, entrepreneurs are becoming increasingly mindful of the need to protect intellectual property. The fact that cannabis is a Schedule I substance, however, complicates the situation and calls for some creative solutions. On June 25, SmithAmundsen attorneys Connie Lindman and Kelly Smith hosted a webinar in which they explored intellectual property issues in the medical cannabis industry.
Intellectual property protection comes from five basic sources:
- Federal patent law protects unique inventions or processes, including business methods;
- Federal copyright law protects original creative works, such as literature, design, computer code and music, and may also apply to advertising campaigns with an extended narrative line;
- Trademark law, which exists in federal, state and common law varieties, covers names, logos, hashtags, and the general appearance of a product;
- Trade secrets law is generally a matter of state statute and protects secret formulas or processes that are not otherwise covered by patent or copyright law; and
- Domain name and internet protocol address registrations prevent competitors from misappropriating an electronic presence. It is generally wise to register several variations of a domain name and internet protocol address to prevent confusion.
The hitch is that federal intellectual property law is generally not available to protect businesses that are illegal under federal law.
This is less of an issue for ancillary businesses such as cannabis consulting firms or manufacturers of lighting or hydroponic systems. If the invention, design or logo relates only to the plant, however, entrepreneurs and their attorneys find themselves scrambling to find an exception or make the best possible use of state law alternatives.
Bits and pieces of federal protection
Plant varieties are generally not patentable, although the appearance of a plant may be qualify for a design patent, according to Lindman. Asexually produced plant varieties may qualify for utility patents.
This may hold some hope for the future. In the meantime, the U.S. Patent and Trademark Office’s maintains a policy of rejecting applications to patent “immoral and scandalous” marijuana inventions because their use is prohibited by federal law. The process is also very slow so many applicants move to protect their inventions with common law trademarks or service marks while the application is pending.
Patent protection is more likely to be available for items like seed separators or vaporizers if sufficiently unique. Federal copyright law may be available to protect anything that is published, like the content of a website. In 2013, the USPTO opened and then very quickly shut down a category for marijuana trademarks, in a move that puzzled many. That avenue seems foreclosed for the moment.
State law protection
Trademark protection does not actually require federal registration, and so may be far more useful in the short term. Common law trademark protection arises from use. If your business uses a name or logo, you have the right to defend it as yours within a limited geographical area, without any kind of registration. Only federal registration confers that right nationwide, but cannabis businesses generally exist within single states, at the moment, so the absence of a broader right is not yet troubling.
States also permit trademark registration. This is stronger than the common law protection because registration provides evidence that a business name, logo, etc. is actually in use. It also extends throughout the state, rather than just to a locality. State registration also makes it possible to check to see if the mark is already in use by someone else.
The great underexplored resource for cannabis businesses may be state trade secrets law. Most states have adopted some form of the Uniform Trade Secrets Act. In Colorado, it is the Colorado Trade Secrets Act.
Colorado law permits the businesses to seek damages and injunctive relief to prevent the unauthorized disclosure of:
the whole or any portion or phase of any scientific or technical information, design, process, procedure, formula, improvement, confidential business or financial information, listing of names, addresses, or telephone numbers, or other information relating to any business or profession which is secret and of value.
To enforce the secrecy of information like client lists or an unusual and valuable formula for potting soil, an employer must usually require that employees sign confidentiality agreements that describe what is protected.
How to make intellectual property law work
None of the laws that may protect your marijuana brand are self-enforcing. The secret is vigilance and a certain otherwise regrettable tendency to threaten litigation at the drop of a hat. It seems contrary to cannabis culture, but in an industry that is taking off at the speed of legal marijuana, it may be what you need to do to protect the value of the goodwill your business is building.