How cannabis brands are protecting their IP pre-legalization
As the United States inches closer to potential federal cannabis reform the implications for intellectual property in the marijuana industry are becoming a hot topic.
For cannabis operators, navigating the murky waters of IP protection has long been a challenge, and federal legalization or rescheduling could bring both opportunities and new complexities.
“It’s important for brands to think about how they situate themselves for future changes in the law,” said Jabari Shaw, an attorney in the Vorys Cincinnati office who focuses on intellectual property development, protection and enforcement.
Cannabis remains a Schedule 1 substance under federal law, making it impossible to secure federal trademarks for cannabis-related products, although some companies have skirted this issue by registering their trademarks federally on apparel products.
This leaves businesses relying on state-level trademarks, which only protect their brands within individual state borders, although some companies like Cookies has a federal trademark pending on its smokable hemp.
For companies like Sun Theory, maker of Dialed In gummies, this means trademarking their brands in every state where they operate – a time-consuming and costly process.
Sun Theory moved its headquarters in January from Denver to Austin, Texas, where co-founder and CEO Connor Oman was raised. However, the company maintains a strong presence in Colorado, including a cultivation facility and 14 licensed retail locations.
“There’s no silver bullet,” Sun Theory President Matt Melander said. “The best protection have is to trademark the brand in every state we enter and protect as much as possible through trade secrets.”
What is intellectual property?
With innovations spanning cultivation techniques, product development and branding, protecting a cannabis company’s intellectual property is complex.
From patents and trademarks to trade secrets and copyrights, each method of protection offers unique benefits and plays a role in preserving a brand’s value and ensuring sustainable growth.
Patents: Protect innovations like novel strains, cultivation techniques and manufacturing processes. Give inventors exclusive rights for a limited time, preventing others from using or selling the patented invention without permission. Cannabis products cannot be trademarked at the federal level, but they can be patented.
Trademarks: Protects symbols, words and phrases that identify a brand. Federal trademark protection is limited to lawful products and services, so cannabis brands often seek protection for ancillary products or rely on state trademark laws.
Trade secrets: Protect confidential information that gives a competitive edge, such as cultivation techniques, recipes and business strategies. Protection requires maintaining secrecy through security measures, limited access and confidentiality agreements.
Copyrights: Protects work like logos, packaging designs, digital content and written materials. Federal illegality of cannabis does not affect copyright protection, making it a good tool for safeguarding creative expression.
Each type of IP protection covers a specific aspect of a cannabis brand, and not single type can protect everything.
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