In 2016, I wrote my first of a handful of Cannabis Business Times columns on the topic of patents and trademarks. In it, I discussed how I started laying the groundwork to trademark my cannabis consulting company, Trichome Technologies, by printing branded sweatshirts, stickers and business cards as early as 1994.
Those efforts spurred a decades-long process of finding out just how far the patent and trademark infrastructure—composed of regulators, lawyers and application reviewers—was willing to work with an increasingly regulated cannabis industry. Interestingly, there has been a growing willingness to work on such applications by all parties as more states and federal governments outside of the U.S. legalize both medical and adult-use cannabis.
Here, I offer more of my lessons and insights into what the patent and trademark process might look like for your cannabis business to hopefully help you get around the many legal landmines I have encountered.
Patents
As I wrote previously, when it comes to how quickly a patent application clears the review process, there is no consistent answer, as different state, federal, and international jurisdictions have their standards. It’s often a paperwork-intensive process that can undergo many revisions, edits and conversations with the patent reviewer.
Application fees can be manageable if applying for protection in one or two countries, but when trying to globalize your patent rights, those fees can be compounded with translation fees. (Most countries require that patents are filed in their official language).
Businesses and individuals looking to control costs in their patent application attempts need to carefully select which countries in which they wish to file for patent protections. For instance, I personally only file for North America and the European Union as they are the most relevant markets for my products and services. It’s also important to look at a country’s track record with enforcing rights for international applicants. It makes no sense to file a patent in countries that pirate technologies, for example.
The USPTO requires that patent holders pay regular fees to maintain the patent. They are due between 3 and 3.5 years after issuance, then again between 7 and 7.5 years and finally between 11 and 11.5 years. There is a six-month grace period, but surcharges are applied to late payments. Fees vary based on business size and increase over the life of the patent, and run $2,000 to $7,700 for general businesses.
Recent court decisions should embolden those cannabis companies with the required capital who have hesitated on applying for patent protections out of enforceability concerns stemming from the Controlled Substances Act (CSA) and cannabis’s Schedule I status. Legal precedent in favor of cannabis patents has been set in the Central District of California.
In 2021, Gene Pool Technologies, a cannabis licensing and development company focused on extraction technology, notified Coastal Harvest, a cultivation company based in Vista, Calif., that it violated its utility patents related to extracting oils and compounds from plants by copying its extraction method. Instead of licensing the right to utilize the patented process, Coastal Harvest chose to challenge the patent.
Coastal Harvest argued “that the alleged infringing activity of extracting solutes from a cannabis plant ‘implicate alleged violations of the CSA,’” and therefore the patent was invalid, according to an analysis from Lexology.com. Coastal Harvest went a step further and proposed that “any royalty or damages the Court awarded would be proceeds from a crime.”
The court was unconvinced by these arguments and found that the statutory presumption that patents are valid stood. Because the patent was worded broadly to include extractions from any plants, not just cannabis, the court found the patent was not in violation of the CSA , and that Coastal Harvest violated Gene Pool Technologies’ intellectual property (IP). This first ruling addressing the enforceability of utility patents involving cannabis companies set a precedent for the industry.
Trademarks
In my first IP column, I mentioned how I started using my branded logo as early as 1994 despite my company only being a concept at that point. As I wrote at the time, “it was not prudent to walk into an attorney’s office, be it a basic, criminal, patent, trademark or any other type, and proclaim yourself a marijuana grower asking for their services.”
While the stigma and barriers for cannabis brands to apply for a trademark have greatly lessened, it’s still important that those companies use their brand widely, and keep a record of doing so, once the trademark is granted. That’s because the USPTO requires that trademark owners regularly file documents proving the trademarked material has been actively used. Trademarks also are subject to audits if the USPTO wants more information.
The USPTO lists three key anniversaries at which they require trademark owners to provide documentation proving their continued commercial use of their trademark (aka “maintenance filing”): between the fifth and sixth year after the registration date; between the ninth and tenth year after the registration date; and every 10 years after that.
As such, the trademark assignee should gather as many supporting photos, documents, and anything else that demonstrates continuous use of the mark and commerce, whether it be goods or services. In addition to the swag I dished out in 1994, promotional posters, trade show samples, brochures or advertisements all qualify as proof of trademark use that can keep the trademark valid and active.
While the USPTO offers a six-month grace period following your trademark renewal during which you can still apply, an additional fee applies. The office advises renewal applicants to file early in the year in which your required maintenance filing is due as doing so “should give you enough time to resolve any correctable errors without paying an additional fee if the USPTO rejects your filing.”
Trademarks can offer your brand protection from fraudsters and copycats, but only if you make the effort to maintain and enforce them.