Acreage Holdings CEO Muses on What Companies Can Do to Better Protect Their Cannabis IP – LPC
One of the huge disadvantages companies have in the US is protecting cannabis IP (intellectual property). The reason, says Acreage Holdings CEO Kevin Murphy is simple: it’s still illegal in the US.
“Of course, the best solution to these problems would be for the federal government to legalize cannabis,” he said. Murphy wrote an opinion piece about cannabis IP in Forbes (please see link below). “That would allow for national trademark rights and immediately eliminate many of the complications the industry now faces.”
Those complications are not small. Generally speaking, if an American company generates any IP, they simply file it with the United States Patent and Trademark Office. But that only applies to products that can be lawfully sold in the US. Now that hemp is legal in the US, products derived from hemp can be registered. But cannabis IP is still wide open.
“At my company, we are creating and licensing IP for products around the country,” he said. “We’re seeing firsthand how dealing with (cannabis IP) requires an extra level of attention.”
Companies can’t even do anything as basic as registering their name. “A brand name registered in California may be owned by someone else in Maine,” he said. “Without the ability to have nationwide rights through federal trademark law, issuing a ‘nationwide’ licence is extraordinarily difficult.”
This is similar to the issues companies have securing banking services.
How Can Companies Protect Their Intellectual Property in the US? – LPC
Murphy suggests companies take a series of steps to protect their cannabis IP as best as possible. First, companies must make their IP claims enforceable in all individual states.
“The challenge for cannabis entrepreneurs is that cannabis IP needs to be rigid enough to be defensible against infringement, but also flexible enough to be applied across 33 different state regulatory schemes. That’s not easy to balance.”
Next, he said, companies should take the time to ensure their cannabis IP does not infringe upon anyone else’s in each state. That process takes time, he said, but it’s worth it. Finally, when expanding to other states, he suggest licensing agreements. Local companies will already have local knowledge of laws and be compliant, and ultimately help secure cannabis IP in that state. He uses the example of Colorado companies selling in California.
“Such use of the Colorado-based brand in connection with sales of the products in California may, in turn, support obtaining a trademark registration for the Colorado-based brand in California.”
In case you’re wondering, companies cannot register their cannabis IP in Canada and have it apply in the US. On the flip side, this is sort of a microcosm of what may come. Canopy Growth has an agreement to buy Acreage Holdings when the US legalizes cannabis. In this case, Canopy Growth IP could, in theory, be registered through Acreage Holdings in the US.
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