California IP Protection for Cannabis Businesses

Daily Journal recently published an article by, Dr. Dariush Adli, President at ADLI Law Group discussing how legalization of recreational Cannabis in California in 2016 has resulted in a burst of cannabis related new business activity in the state directed to development of cannabis related products, processes and services. Intellectual property and the exclusivity it provides to its owners is a valuable tool for cannabis related businesses, allowing them to gain a competitive edge. However, cannabis related businesses face a special challenge in securing and enforcing intellectual property protection in that cannabis is illegal at the federal level. This article discusses options available to California cannabis related businesses to maximize their obtain protection of their valuable IP.

Patent Protection for Cannabis Products and Services

Patents are issued by the U.S. Patent and Trademark Office (USPTO) for inventions that meet the three basic criteria of utility, novelty and non-obviousness. There are three types of patents, plant patents, utility patents and design patents. Finally, plant patents protect aspects of the plant. Despite illegality at the federal level, the USPTO has been issuing cannabis patents for decades. With spread of legalization, the number of issued patents has significantly accelerated.

cover inventions relating to the structure, operation, function or use of a product or process. Recently issued cannabis utility patents include a specialty cannabis plant, with an optimal amount of THC for making recreational use more palatable; a new extraction technique designed to increase yields; and one directed to cannabis products having a pleasant taste and smell by grinding a mix of medical marijuana and an alkaline.

Plant patents protect asexually reproduced plants, including cultivated sports, mutants, hybrids, and newly found seedlings. Issued cannabis plant patents include one distinguished by its trichome density, dried flower yield and max THC content; a plant, which is high yield, with vigorous growth and very resistant to fungal diseases; and one with specific medicinal properties.

Design Patents protect the aesthetic, decorative aspect of products, which are non-functional. Design patents can protect ornamental aspects of cannabis related products, such as containers, and paraphernalia. Examples of issued cannabis design patents include one directed to a cannabis storing container, containing seven compartments for storage; a beverage lid showing a cannabis leaf; and a cannabis trichome extractor.

Utility and plant patents have a life of 20 years from their filing dates. Design patents are valid for 15 years from their issue date.

Patent Infringement Enforcement Law is Developing

Despite illegality at the federal level, patent enforcement is gaining some traction in federal courts, especially in federal courts located in cannabis friendly states. The case of United Cannabis Corporation v. Pure Hemp Collective Inc., 2019 WL 1651846, at *1 (D. Colo. 2019) is the first case seeking to enforce a Cannabis patent in federal court. The patent in issue in United Cannabis relates to extraction of pharmaceutically active components from plant materials. The cannabis patent in issue as survived summary judgment as being directed to unpatentable subject matter as an abstract idea and recently the court issued its claim construction (Markman) order. Importantly, the legal status of Cannabis has not been made an issue in that case and the case.

Trademark Protection for Cannabis marks

Trademark is a powerful intellectual property tool for strengthening and enhancing the competitive position and thus value of cannabis businesses through promotion of their brands. Unlike patents, which are exclusively in federal domain, trademarks rights are available at the state, as well as the federal level. Also, unlike patents, the underlying trademark rights are acquired not by registration of the mark, but by usage of the mark in trade and commerce. However, such use must be legal.

Cannabis marks can be registered in California, provided that use of the goods or services identified by the trademark are be legal under California law, including compliance with applicable state and local licenses and permits. As with federal registration, California registrations must choose their classification. In that regard, California uses the same classification list as used by the USPTO, which does not include specific categories for cannabis goods or services, leaving applicants with choosing the categories which best categorize the good(s) or service(s) associated with their Trademark. Examples of common classification codes used for cannabis-related Trademarks include the Pharmaceuticals, which cover trademarks for medicinal products containing cannabis extracts; Natural Agricultural Products, which cover trademarks for live cannabis plants; Smokers Articles, which cover trademarks for cannabis products intended for smoking; Advertising and Business, which cover retail stores selling cannabis products; Transportation and Storage, which cover delivery of cannabis products.

Trademarks have an indefinite life and are valid for as long as they are reasonably regularly used in trade.

Copyright Protection for Cannabis Works

Copyright protects original works of authorship that are stored in a retrievable format. Examples of protectable work include musical, dramatic, literary, and artistic works, such as graphics, illustrations and depictions, film, songs, lyrics, writings and computer software. Importantly, copyrights attach the original work upon its creation and storage in a retrievable format. Therefore, registration is not required for creation of copyright in the works.

Unlike federal registration of trademarks, obtaining copyright protection does not require legality of the work for which copyright protection is sought. California cannabis related products and services can obtain copyright protection for several aspects of their businesses, including, graphical depictions and illustrations and writings on the product packaging or the company website as well as logos, which can also act as source identifiers for their corresponding products or services. Securing copyright protection for logos which also serve as source identifiers is also a way to get around lack of availability of protection for cannabis trademarks at the federal level. Because copyright attaches automatically to the work upon creation and storage, registration is not required for copyright protection. However, timely registration of the work provides additional benefits to copyright owners, including presumption of ownership and validity and availability of statutory damages and attorney’s fees in copyright infringement litigation.

Copyrights enjoy a very long life. Copyright protection lasts for the life of the author, plus 70 years. Protection for works created anonymously, pseudonymously, and for hire is the shorter of either 95 years from the date of publication or 120 years from the date of creation.