Navigating Your Client’s Cannabis-Related Intellectual Property: What You Need to Know

Post Authored by Stephanie Nikitenko

Now that cannabis has been legalized in eleven states and Washington D.C., cannabis selling and growing businesses have grown exponentially. Many entrepreneurs are looking to expand their business ventures into this green space. Inventors are also entering into this area by developing new strains of the cannabis plant or inventing new equipment for cultivation. The economic outlook is promising because large companies such as Coca-Cola, Pepsi, Budweiser, Heineken, and Coors want to get involved in the industry. [1]

There is, however, still a discrepancy between federal law and state law. Under federal law, cannabis is still considered a Schedule I substance. Since the United States Patent and Trademark Office (“USPTO”) is a federal agency, and cannabis is still considered illegal by the federal government, the USPTO is very discerning about what cannabis-related registration it allows. Since intellectual property is predominantly practiced at the federal level, this poses some concerns for protecting cannabis-related inventions and trademarks with federal registrations.

Patents

In 2017-2018, the USPTO issued almost 250 cannabis-related patents—more than the previous seven years combined. [2] Currently, the USPTO will allow a cannabis patent if it meets the other requirements for patent protection. [3] Specifically, the invention must be a new and useful process, machine, manufacture, or other composition of matter, or any new and useful improvements thereof. Plant patents are a useful type of patent to consider and are given “to anyone who invents or discovers and asexually reproduces any distinct and new variety of plant.” [4] While they are limited to a single claim and directed to a particular strain of the plant, plant patents are vital tools that protect the “crown jewels” of a cannabis company. [5]

Trademarks

In order to obtain trademark registrations for a brand at the USPTO, the trademark must be used in commerce. [6] However, other federal statutes can cause friction when determining whether a cannabis brand is lawfully used. [7] Those statutes include the Controlled Substances Act (“CSA”) and the Food, Drug and Cosmetic Act (“FDCA”). [8]

U.S. federal law allows for a trademark to be registered for goods that are lawfully “sold or transported in commerce.” However, that prevents cannabis products from receiving trademark protection because federal law prohibits the manufacture, distribution, and sale of cannabis products. [9] While the 2018 Farm Bill allowed trademark registrations for “hemp” (cannabis plants and derivatives containing no more than 0.3% THC on a dry-weight basis), all other cannabis products remain ineligible for federal trademark registration. [10]

Enforceability

While state courts may decide certain patent issues, such as a breach of an agreement involving a patent, only federal courts may decide patent infringement cases. Due to cannabis’ illegality, patent enforcement cases against users, sellers, or manufacturers of cannabis-related products are rare. [11] As a result, it seems uncertain whether federal courts will enforce cannabis patents.

However, that may change soon. This past January, the court in United Cannabis Corporation v. Pure Hemp Collective, Inc., 2020 U.S. Dist. LEXIS 11128, 2020 WL 376508 (D. Colo. 2020) has decided to treat the dispute similar to other patent infringement cases. United Cannabis Corporation (“UCANN”) sued Pure Hemp Collective, Inc. (“Pure Hemp”) for patent infringement. Notably, UCANN asserted only one patent: U.S. Patent No. 9,730,911 (“911 Patent”), titled “Cannabis Extracts and Methods of Preparing and Using Same.” The 911 Patent protects “liquid cannabinoid formulation[s], wherein at least 95% of the total cannabinoids” is/are (1) tetrahydrocannabinolic acid (“THCa”), (2) tetrahydrocannabinol (“THC”), (3) cannabidiol (“CBD”), (4) THCa and cannabidiolic acid (“CBDa”), (5) THC and CBD, and (6) CBD, cannabinol (“CBN”) and THC.[12] On January 23, 2020, the court ordered that certain terms be constructed in accordance with the court’s language in order to provide clarity in the claims. Specifically, the court ordered the following construction of terms:

  • “cannabidiol” (abbreviated “CBD”) means “the decarboxylated form of cannabidiolic acid (CBDa)”;
  • “THC” means “the decarboxylated form of tetrahydrocannabinolic acid (THCa)”;
  • “cannabinol” (abbreviated “CBN”) means “the decarboxylated form of cannabinolic acid (CBNa)”; and
  • “cannabinoids” in Claims 1, 5, 10, 16, 20, and 25 means “more than one cannabinoid.” [13]

Claim 31 of the patent read, “The formulation of any one of the preceding claims, wherein the formulation is infused in a medium chain triglyceride (MCT).” [14] The problem that the court foresaw with Claim 31 of the patent was that it may be indefinite, which prevented the court from construing the claim. [15] The court ultimately expected the parties to address the matter of indefiniteness through summary judgment. [16] This case is significant because it is the first patent infringement case that a court has addressed in terms of claim construction. This could be indicative of the courts beginning to recognize the enforceability of cannabis-based patents.

In the long run, the obvious solution to all these problems is to have the federal government officially legalize cannabis in the US. But, until that happens, participants in the cannabis industry need to exercise caution when attempting to protect their cannabis-related inventions and brands.

[1] Cannabis Patent Protection is Getting Higher, Intell. Prop. Ctr. (Jan. 2019), https://theipcenter.com/2019/01/cannabis-patent-protection-is-getting-higher/.

[2] Matthew Dicke, Sana Hakim & Kevin T. McCormick, In The Weeds: Key Intellectual Property Takeaway For the Cannabis Industry, Nat’l L. Rev. (Nov. 2019), https://www.natlawreview.com/article/weeds-key-intellectual-property-takeaways-cannabis-industry.

[3] Cannabis Patent Protection is Getting Higher, supra note 1.

[4] Eric Furman & Ari Feinstein, Patent Protection for Cannabis?, PharmExec.com (Nov. 2018), http://www.pharmexec.com/patent-protection-cannabis.

[5] Id.

[6] Carly Klein, The Complicated Relationship Between IP Law & Cannabis, IP Watchdog (Nov. 2018), https://www.ipwatchdog.com/2018/11/10/complicated-relationship-ip-law-cannabis/id=102941/.

[7] Id.

[8] Id.

[9] Kevin Murphy, Why Building Intellectual Property in the Cannabis Industry Is So Difficult, Forbes (Sept. 2019), https://www.forbes.com/sites/kevinmurphy/2019/09/26/why-building-intellectual-property-in-the-cannabis-industry-is-so-difficult/#5a9a14eb1fdc.

[10] Id.

[11] Cannabis Patent Protection is Getting Higher, supra note 1.

[12] Furman & Feinstein, supra note 4.

[13] United Cannabis Corporation v. Pure Hemp Collective, Inc., 2020 U.S. Dist. LEXIS 11128, 2020 WL 376508 (D. Colo. 2020).

[14] Id.

[15] Id.

[16] Id.

About the Author:

stephanieStephanie Nikitenko is currently a 3L at The John Marshall Law School in Chicago. At John Marshall, she’s the President of the Intellectual Property Law Society (IPLS) and primarily concentrates her studies on the subject of Intellectual Property. She recently spent a semester working in the JMLS Trademark Clinic where she assisted clients with the Trademark Registration process with the USPTO. Additionally, under the supervision of an attorney, she currently assists a law firm with both their trademark and patent matters.

 

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