Intellectual Property Concerns in the Cannabis Community
Author – Jon Russell
Edited by Max Davis
Patenting, copyrighting and trademarking are all new terms in the cannabis community. As the industry is going through its growing pains, these are new concerns that business owners have to worry about. How close is your logo to another, more established business? Does your product too closely match something that already exists on the market? What about your name; did you “borrow” your name from a popular brand that has established itself and done all the footwork for brand recognition?
As we begin to develop our products and grow our business we have to be aware of these things and be ready to switch lanes at a moment’s notice. Organizations work hard to develop their intellectual property (IP); the body work or invention that is the result of creativity, such as a manuscript or a design, to which one has rights and for which one may apply for a patent, copyright, trademark, etc. Intellectual property is fiercely protected and businesses will not hesitate to act; from cease-and-desist letters to lawsuits demanding royalties, there are many avenues for businesses to follow.
So, how do we brand ourselves in a new industry when everything else seems already taken?
Let’s take a look at some of the current legal issues that have occurred and what steps we can take to avoid them.
Trademarking vs. Copyrighting vs. Patenting
Before we can discuss these we need to understand the difference between the concepts. Here is a brief primer from the United States Patent & Trademark Office:
- Trademark – A trademark is a word, phrase, symbol, and/or design that identifies and distinguishes the source of the goods of one party from those of others.
- Copyright – A copyright protects original works of authorship including literary, dramatic, musical, and artistic works, such as poetry, novels, movies, songs, computer software, and architecture. The duration of copyright protection depends on several factors. For works created by an individual, protection lasts for the life of the author, plus 70 years. For works created anonymously, pseudonymously, and for hire, protection lasts 95 years from the date of publication or 120 years from the date of creation, whichever is shorter.
- Patent – A patent is a limited duration property right relating to an invention, granted by the United States Patent and Trademark Office in exchange for public disclosure of the invention. Patentable materials include machines, manufactured articles, industrial processes, and chemical compositions. The duration of patent protection depends on the type of patent granted:
- Design Patents – 15 years from issuance for applications filed on or after May 13, 2015 (14 years from issuance if filed before May 13, 2015)
- Utility patents and plant patents – 20 years from the date on which the application for the patent was filed in the United States or, in special cases, from the date an earlier related application was filed.
Each topic provides a certain type of protection to the digital and print media you create including: logos, product names, designs, stories and written materials, art (including all computer graphic designs) and numerous other types of created materials. Let’s move into some of the current legal issues concerning each topic as it pertains to cannabis.
One large, landmark case for trademark infringement in the cannabis industry is Starbucks v Hitman Glass and James Landgraf. As you can see in the image below, Landgraf allegedly created the Hitman Glass line of Dabuccino water-pipes to look like the popular Frappuccino cups from Starbucks. From a green straw for a mouthpiece to a slightly altered logo, there was no doubt in anyone’s mind that these were a copy of the Starbuck’s cups.
Image courtesy: Everything420.com
A judge agreed and Starbucks won $99,000 against Landgraf for trademark infringement. Although the products have been removed from their website, the Hitmass case is still pending.
Durable products aren’t the only thing that can be protected by trademarks. Southern California based Headspace International owns the trademark for “The Clear” which is the name of a cannabis distillate product under their umbrella. They are currently suing Washington based Podworks for trademark infringement for their use of the name “Clear” (dropping only the word “the” from the name) on their cannabinoid distillate product. This battle continues to drag on as Podworks owns the trademark “Top Shelf Clear” and maintains that the name is different, refusing to back down from the lawsuit.
Yet another trademark suit against a cannabis company is the Stash Tea Co. v Stash Cannabis Co. in Beaverton, Oregon. Stash Tea is an established tea company that alleges that Stash Cannabis Co.’s use of their name dilutes their market value. Negotiations are currently underway and there has been no update to the outcome of this case.
This goes beyond a product or a name. Did you know that John Deere owns the trademark on the specific color of green it uses? That color has been trademarked and anyone who uses it without Deere’s permission could be in big trouble!
So, how do you avoid trademark infringement lawsuits?
Corporations value their trademarks very highly and will fight to protect them. The only real way to avoid a trademark infringement case is to be original. Come up with a unique product, a unique name and file a trademark application. You may be saying to yourself, “What about if I change the logo over 25%?” Be original, this is one of those “alternative facts” and does not maintain any validity within the framework of the United States Patent & Trademark Office. You potentially could cite a “transformative” measure that allows certain type of artistic works to be reproduced without the consent of the original artist, but only if it is considerably different and now considered a new creation.
This is very uncommon, especially when there is money involved, so it is not recommended. There is no golden rule when it comes to changing a well known logo and using it; if it could potentially cause confusion between the brands, then you’ve committed trademark infringement. Just modifying a percentage of the logo will not fully protect you. Our advice? Be yourself, brand your story and be original.
Many will find out that a federal trademark is unobtainable for a cannabis product currently under the Controlled Substances Act. You have to have sold at least one product to receive a trademark and you can not legally sell cannabis on the federal level. For now, state trademarks are all that can be applied for and should be in every state you plan to operate in. To really lock in your brand, however, it is a good plan to file trademark applications in every state with some sort of legal cannabis, whether medical only or adult use.
Copyright protection is one of the easiest ways businesses (especially in the cannabis industry) can protect themselves. Like we mentioned earlier, copyright applies to original works of authorship including literary, dramatic, musical, and artistic works, such as poetry, novels, movies, songs, computer software, and architecture. This means anything you’ve written, drawn, or designed can be copyrighted.
The Starbucks lawsuit we mentioned before also applies to copyright issues. Not only did they win the trademark case, they also were awarded a whopping $300,000 for copyright infringement! Starbucks was able to prove that the use of their packaging and logo designs diluted their brand and caused damage to their business as a result. Starbucks argued that Landgraf and Hitman Glass “willfully intended to create an association with the Starbucks Marks and to capitalize upon the success and popularity of the Starbucks Marks to sell [their] products.”
Copyrighting protects anything you’ve written, drawn, painted or created on a computer. If you’ve diluted the market even a little bit by using something without the artist’s permission, you face copyright issues.
So, how do you avoid copyright lawsuits?
To avoid being sued for copyright infringement you must receive written permission from the original artist. Linking back to them, or saying who the original artist was in a repost, does not constitute protection. The ‘Fair Use’ concept may allow for resharing of works without original permission, but only so long as the person reposting makes no monetary gain. As soon as you reuse something without permission and make a profit from it, (marketing and advertising counts here, don’t “borrow” images for social media and other ad campaigns) you have infringed copyright law.
If you manufacture a product then you may want to look into protecting your work with a patent. U.S. patent law protects machinery, industrial processes, chemical compositions and in some cases, plants. Yes, cannabis breeders are able to apply for and receive a patent on the strains they develop. Plant patents are typically awarded for 20 years and could potentially prevent others from breeding or growing those specific genetics without authorization from the original patent holder.
While there haven’t been any cases of cannabis patent infringement suits being brought to the courts, this is an area for concern as thousands of cannabis growers are currently working with genetics. Many of them are hoping to create their own, unique strain. What happens if you develop a strain using a patented strain as one of the genetic parents? Will you be required to pay royalties on that strain in perpetuity? This is just one of the many ways patents could come into play in a big way in the cannabis industry.
What if I was using something before another company got a patent, doesn’t that “grandfather” me in? How do I avoid a patent lawsuit?
If you are using a process or machinery and someone else receives the patent then you should desist immediately. A perfect example of this, in the cannabis industry, is the patent recently awarded to Connoisseur Concentrates for their extraction machinery: the Mr. Extractor. The patent covers certain parts of the extraction process that are currently being used by many in the industry. Only time will tell how that will play out in the industry as it continues to grow.
Moral of the Story: BE UNIQUE!
Intellectual property is closely guarded and very valuable to businesses. It takes hard work and a lot of time to get a brand recognized and “borrowing” elements is a bad way to get started and a GREAT way to earn a bad name for yourself before you’ve even begun! Be unique and original with your marketing ideas. Not only will your customers start learning about your story, you’ll also be well clear of any future cannabis copyright cases. All well-branded firms and marketing agencies are known for their original content, not what they reposted or repurposed.
Connie Chong said it best in a recent article, “If you can’t say you created it, don’t post it.” While that is a little bit extreme, especially in the case of social media sites like Twitter, it is still recommended to get permission! Don’t just repost content; ask if you can repost an article. If you are going to share an article without permission, then make sure you write a unique introduction paragraph and then link to the original article. Don’t just reshare it in it’s entirety. The same philosophy can be applied to all creative works.
The cannabis industry has long been a “wild-west” of sorts with very little regulation. Those days are numbered and it is now time for businesses to be as original as they can. As we transition from the black market into a functional, recreational industry, companies need to follow suit and offer their own ideas as opposed to building off of an existing one.
Remember, nothing sells your brand better than the story behind it.