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Protecting Your Innovative Cannabis Strains With a Strong Intellectual Property Strategy: Part 3 – Trademark Protection for New Cannabis Strains

By Dr. Travis Bliss
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In the first two installments of this three-part series, we explored the reasons why cannabis breeders and growers should adopt a strong IP strategy and discussed the types of patent protection that they should consider. In this final installment, we examine trademark protection for new cannabis varieties and the unique trademark issues currently facing the cannabis industry.

What is a trademark and what does it really get me?

A trademark is a visual feature of some sort, such as a word, phrase, or symbol, which is used to identify a company’s goods and to distinguish those goods from the goods of a competitor. Like a patent, a trademark is effectively an exclusionary right, meaning that it gives the owner the right to exclude others from using the same mark, or a mark that is confusingly similar, in connection with the same type of goods. The test for determining whether a competitor’s mark infringes upon your trademark is whether there is a likelihood of confusion in the mind of consumers over the source of the goods. Put another way, the test is whether a consumer is likely to be confused into believing that your competitor’s goods are actually associated with your company.

How long does this exclusionary right last? So long as certain requirements are met, a trademark can last forever. While a patent that protects a new cannabis variety will expire in 20 years, a trademark that also covers that strain can be maintained forever, which allows patents and trademarks to be used together to offer both stronger and longer lasting protection over a new cannabis variety.

How do I get a trademark?

Trademarks exist under both state and federal law. In many states, to obtain common law trademark protection, one does not need to file anything with a government entity – you simply need to use the mark (e.g., the word or logo) in connection with your company’s goods and use a “TM” in conjunction with the mark. However, the protections afforded by such a common law mark are relatively limited, so it is generally advisable to register the mark with the state and/or federal government in order to strengthen the exclusionary rights. Along the same lines, federal registration offers certain advantages over state registration, such as the right to use the mark nationwide and the right to challenge infringers of the mark in federal court.

To register a trademark, breeders and growers need to file a trademark application with the relevant government entity – the U.S. Patent and Trademark Office (USPTO) for a federal mark or various state government offices for state marks. For both state and federal trademark registrations, an applicant typically must demonstrate that 1) he/she is the first to use and register the mark for the type of goods at issue, 2) that he/she is actually using the mark in commerce or has intent to do so, and 3) that the mark is distinctive. Of these three requirements, proving distinctiveness is often the one that gives applicants the most difficulty.

A mark is “distinctive” if it is capable of identifying the source of a particular good. Because of this requirement, a brand name that is generic or merely describes the goods, such as “Large Bud Cannabis Plants,” is often less desirable because it is less distinctive and thus may be difficult to register. Conversely, a brand name that is “arbitrary” or “fanciful,” such as “Moose Foot Cannabis,” is often more distinctive and therefore may be easier to register, generally making it a more desirable choice as a brand name. This issue of distinctiveness is something that cannabis growers and breeders should keep in mind as they develop a branding strategy for their new varieties.

Unique trademark issues for the cannabis industry

Like almost every aspect in the cannabis industry, there are some unique trademark issues that breeders and growers must contend with. With regard to federal registration, the USPTO will currently not allow registration of any trademark for cannabis products that are illegal under federal law. However, that does not mean that every cannabis-related product cannot obtain any federal trademark protection. The reason for this is that a federal trademark registration is tied to specific types of goods that are being sold under the mark, so the ability to register a desired brand name will depend on what type of goods are covered by the trademark.

To that end, a mark that covers actual cannabis products (like plants or edibles) cannot currently be federally registered even if the mark does not actually include the word cannabis. For example, a breeder likely could not federally register the brand name “River’s Edge Farms” for the sale of cannabis plants and plant parts. However, a mark that covers products that are related to the cannabis industry may be allowable – even if it references cannabis –if the goods being sold under the mark are not themselves illegal under federal law. For example, “Pot Maximizer,” a trademark name for a grow light that is being sold to cannabis growers, could be federally registered since it is not illegal to sell a grow light.

Under current federal law, which prohibits the cultivation and sale of cannabis plants and their parts, a federal trademark registration is certainly not currently available for new cannabis varieties. However, this does not mean that trademark registration for new cannabis varieties is impossible. Most states with legalized cannabis will allow registration of state trademarks for cannabis products (e.g., Washington, Oregon, Colorado).

Further, since branding is a long-term strategy it is important for growers and breeders to keep the requirements for federal registration in mind when adopting a branding strategy to ensure they can obtain federal protection for their current brand names if and when cannabis becomes federally legal.

The bottom line…

Despite the fact that there are currently some unique trademark issues for cannabis growers and breeders, trademark protection can be a very valuable asset that both increases the level of protection and extends it beyond what can be obtained through a patent alone. As such, breeders and growers should adopt a branding strategy for their new varieties that attempt to maximize trademark protections for those varieties, both now and in the future.

Breeders and growers should select brand names that are sufficiently distinctive to meet the requirements of both federal and state trademarks. Right now, they will likely need to focus on state trademark rights by applying for state trademark registrations where available and by making sure that they are treating the mark as a brand name of their company (e.g., using a “TM” after their marks). However, they should also keep a close eye on the status of federal registration laws so that they can apply for federal registration of their marks when it becomes available.

Additionally, as discussed in prior articles, growers and breeders should also be seeking to maximize patent protection for their new cannabis strains so that they can use that protection in addition to trademarks to create a stronger IP position. Cannabis growers and breeders who adopt such a comprehensive strategy now could reap huge rewards down the road, especially if (or when) cannabis becomes federally legal, either at the medical or recreational level.

Legal disclaimer: The material provided in this article is for informational purposes only and not for the purpose of providing legal advice. The opinions expressed herein are the opinions of the individual author and may not reflect the opinions of the firm or any individual attorney. The provision of this information and your receipt and/or use of it (1) is not provided in the course of and does not create or constitute an attorney-client relationship, (2) is not intended as a solicitation, (3) is not intended to convey or constitute legal advice, and (4) is not a substitute for obtaining legal advice from a qualified attorney. You should not act upon any such information without first seeking qualified professional counsel on your specific matter.

Sustainability for the Cannabis Industry, Part II: The New Cannabis Consumer

By Olivia L. Dubreuil, Esq., Brett Giddings
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Most readers ought to be well aware that the cannabis industry is rapidly growing. The Arcview Group, an Oakland-based investor network, estimates the retail and wholesale cannabis market will reach $22.8 billion by 2020. That number represents a lot of people consuming cannabis in many different ways.

The average cannabis consumer is changing. A new range of social groups is consuming cannabis-based products. From yoga diehards, to middle-aged men and women, veterans that have ‘tried everything else’ and young professionals looking for a different way to relax, the market is broadening.

This new segment of cannabis consumers are often not looking to get high- they are looking for anti-inflammatories, relaxants and ways of dealing with chronic pains and stress. For these health and wellness seekers, the last thing they want is a product dosed with pesticides, insecticides or butane residues. We can expect to see these consumers to follow broader consumption trends- specifically when it comes to a product like cannabis that people are inevitably placing in or on their bodies.

These consumers come with new sets of expectations, similar to those when they buy fruit, vegetables, coffee or chocolate. They are increasingly curious about the contents of the products they purchase- they are a large part of the reason that the sales of organic produce has ‘ballooned’. They are asking questions like: Does the product contain pesticides? Has the product been cultivated in a way that minimizes negative environmental impacts? How do we know that the supply chain quality controls are rigorous enough to ensure no one has tampered with the product? Who is growing and picking this product and how are those people being treated?

When a curious consumer enters a modern American supermarket, they are guided by a range of messages relating to the contents and supply chain that was part of making each product. Organic, non-GMO, pesticide-free, fair trade, free-range and locally produced are some of the common criteria. The more credible labels are supported by codes and procedures in which the whole supply chain is audited, monitored and approved by the certifying body according to certain standards- for example the USDA certifies organic foods.

Being a Schedule I controlled substance under federal law, cannabis is probably not going to receive USDA organic certification any time soon. However there are organizations out there that are committed to increasing the availability of cannabis grown with organic practices. Certifying bodies like Certified Kind and the Organic Cannabis Growers Society are gaining popularity among growers who see the market evolving in that direction. At the same time, businesses such as Delicious Fog (an ‘organic-focussed’ delivery service in Santa Clara County) and Harvest (an ‘organic’ dispensary in San Francisco)- are specializing in the sale of these ‘organic’ cannabis products.

Just like any sustainability issue- ensuring your cannabis product comes from a well-managed supply chain cannot be a last minute add-on. Whether a business is small, large, mature or emerging, developing a strategic approach to the diverse spread of sustainability challenges is critical.

As a cannabis business what can you do to appeal to the new cannabis consumer?

G FarmaLabs Brand Poised for Expansion, Recreational Sales

By Aaron G. Biros
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Patients in California have had access to medical marijuana since it was legalized in 1996. Two decades of legal medical marijuana in California, the world’s eight largest economy, has formed a thriving market of producers, processors and dispensaries. Propositions on the state’s ballot for 2016, such as the Control, Regulate and Tax Adult Use of Marijuana Act, promise measures to introduce the recreational market into the state regulatory system.

G FarmaLabs, a family-owned and operated business, has been operating in California since November of 2013, when they launched at a Marijuana Business Conference in Seattle that year. Ata Gonzalez, founder of G FarmaBrands and chief executive officer of G FarmaLabs, has been in the cannabis industry since 2009, cultivating in California and operating marijuana dispensaries, when he took notice of the changing industry and consumer trends shifting toward consumption of edibles and concentrates.

Ata Gonzalez, CEO of G FarmaLabs and founder of GFarmaBrands
Ata Gonzalez, CEO of G FarmaLabs and founder of GFarmaBrands

“Once the Cole Memo hit in August of 2013, the cannabis industry took off and so did we through a combination of great timing and well thought out regular market packaging and marketing,” says Gonzalez. “With our background in cultivation, we use quality flower as the foundation of our brand, and our proprietary cannabis oil formulations are the backbone of the brand, we use that oil to infuse all regular market edibles products.” They are vertically integrated, beginning with their cultivation of seven strains, so they monitor every blend going into their products and test for potency and pesticides in a consistent manner.

Another key ingredient in their brand recognition seems to come through great product diversity. G FarmaLabs has twenty flavors of infused chocolate bars, a variety of chocolate truffles, pretzels, brittle, chocolate covered cherries, teas, lemonades and other forms of infused edibles. They manufacture a variety of cannabis oil concentrates that come in a syringe to refill cartridges or put on your dry flower or joint but they also sell pre-filled vape cartridges, and pre rolled cannabis cigarettes called G Stiks.

The GFarmaLabs logo, an integral part of their branding, is emblazoned on their packaging.
The G FarmaLabs logo, an integral part of their branding, is emblazoned on their packaging.

Luigi De Dominicis, chief technology officer of G FarmaBrands, says their extraction process is another essential factor in the brand’s success. They run their raw plant material through supercritical fluid extraction (SFE) with CO2. “We do not use solvents like butane to extract our oil because CO2 is proven to be safe for both the operator and end user; we pride ourselves in putting out a safe and quality product,” says De Dominicis. “The same product that goes into our cartridges and syringes goes into our edibles with a different refinement process, which are all tested for potency, microbials and pesticides to ensure consistency, safety and quality.”

In building a successful recreational brand, their expansion model will play a crucial role in keeping their reputation for quality and consistency. David Kotler, Esq., regulatory counsel for global territories at G FarmaBrands, cites their licensing model as the primary distinction between G FarmaBrands and other large marijuana brands looking to expand across state lines. “We are trying to own and control every operation and keep it consistent with production and manufacturing versus giving up control via the licensing process and giving it to others,” says Kotler. This distinction means that G FarmaLabs producers and processors in different states will all operate under the same best practices regardless of location, ensuring consistency from one state to the next.

A glimpse into the new G FarmaLabs facility: The site plan in the city of Desert Hot Springs w3here they are applying for a permit
A glimpse into the new G FarmaLabs facility: The site plan in the city of Desert Hot Springs where they are applying for a permit

“While most states have some form of residency requirements, we are planning to grow organically and self contained, ideally expanding to areas where G FarmaBrands can hold licenses,” adds Kotler. For example, Maryland does not have a residency requirement in their licensing application so that is one of the states they are actively pursuing.

Moving forward, G FarmaBrands is positioning itself for national recognition. “It is difficult in this current regulatory state to state structure to have a national brand, but national recognition is certainly attainable through our great in-house marketing team,” says Kotler.

Running an expansion model of keeping everything very internal, along with their dedication to safety and quality, G FarmaBrands is very well-positioned to be the premier cannabis brand for the state of California, and possibly the nation. They recently harvested a crop in Washington State and in 2016, their products will come to market there. As GFarmaBrands attempts to expand into Maryland for manufacturing, cultivating and operating a retail dispensary, Gonzales keeps his mind set on sustainable growth through 2016 and beyond.