Patent law differs from copyrights and trademarks

By Michael Brubaker and Samuel Terpstra

Many members of the cannabis industry have labored under the misconception that patents are not available for cannabis strains.

In fact, the United States Patent and Trademark Office (USPTO) is restricted in its ability to issue certain trademarks for cannabis. However, there is no such restriction for patents. In fact, in late 2015, the USPTO issued its first patent for a strain of cannabis. This development has clear implications for the entire cannabis industry — particularly growers, breeders and investors.

Before moving forward with this discussion it may be helpful to understand what a patent is, and how it differs from other types of intellectual property. A patent is a property right issued by the government granting the right to exclude others from making, using or selling an invention, effectively permitting a legal monopoly. Any person may obtain a patent by filing an application with the USPTO. Patents are applicable to any invention that is novel, useful and nonobvious. Trademarks apply to trade names, logos and graphics. Copyrights apply to creative works, such as written word or music. All three of these types of intellectual property are available to the cannabis industry, but the USPTO is restricted in its application of a trademark that “consists of or comprises immoral, deceptive, or scandalous matter.”

Cleo Zeus OGFortunately for the cannabis industry, most states also maintain trademark offices that permit cannabis trademarks (although these are applicable only within the state in which they are issued). Patents, on the other hand, come from a single federal office; there are no state patents. Thus, state law is essentially irrelevant as far as patent law goes.

Patents are highly attractive to the cannabis industry because they enable individuals to protect their breeding work by preventing others from making and selling strains they have developed. These rights also encourage development of new strains by allowing breeders to specialize and monetize their research and development work. Cannabis strain patents may also protect a grower’s strains from being claimed by someone else; this will be of particular importance as more states legalize and Big Ag takes a deeper interest in cannabis.

The current state of cannabis intellectual property protection — or rather, the lack thereof — is a rare historical occurrence. Virtually every other major industry relies on patents to encourage innovation and spur development. We know of only one analogous situation in which a well-understood, but not well-protected, subject matter became patentable essentially overnight: genetically engineered organisms.

Grower Mike Burroughs (2)In 1982 the U.S. Supreme Court ruled in Diamond v. Chakrabarty that genetically modified organisms were patentable. A decade earlier, in 1972, microbiologist Ananda Chakrabarty filed a patent application for a bacterium he had developed in his lab that was capable of treating oil spills. The Supreme Court’s decision that Chakrabarty’s genetically modified bacterium was patentable blew open the doors for investment in the rising field of biotechnology. In the following years, biotechnology companies have become an economic and scientific engine for the United States, and literally thousands of patents are granted each year that would likely not have even been filed previously.

We are seeing the same situation occur within the cannabis industry. Prior to 2013, when Washington and Colorado legalized recreational use of cannabis, only a handful of breeders were willing to come forward and admit to the federal government that they had been growing and testing an illegal substance. However, with changes in state laws, many within the industry have taken the position that the genie is out of the bottle; while some states may continue to resist legalization, it is now only a matter of time.

Evidence for this attitude change includes the fact that cannabis growers and retailers routinely file U.S. tax returns, happily paying their dues to be part of the regular economy. The next step is taking advantage of intellectual property protection.

Iitala oz JarIn the United States (as in most of the world), patents are granted on the “first to file” system; an application that arrives at the USPTO on Jan. 1 becomes “prior art” to the application that arrives on Jan. 2. At present, there is extremely little prior art to confound potential patent applicants. However, this is bound to change in the very near future. Breeders and investors who wait to file risk losing out to earlier applicants, and will also face more difficulty and higher fees to pursue the application as the amount of prior art increases. While there are no guarantees as to the outcome of any patent application, the potential for relatively low-cost, but broadly-applicable patents is something that should be considered by all growers, breeders and investors.

 

Michael Brubaker and Samuel Terpstra are attorneys with Cannapatents (www.cannapatents.com), an intellectual property law firm serving the cannabis industry. They are both biologists who have worked for several years advising all aspects of the cannabis industry. Cannapatents is a practice group of Brubaker Terpstra PLLC.