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Intellectual Property

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What you need to know about CBD and Trademarks in the US

It seems as though no matter where you go these days, you’re bound to encounter a product containing cannabidiol, commonly referred to as CBD. As you have likely heard by now, the 2018 Farm Bill (formally, the Agriculture Improvement Act of 2018), which was signed into law on December 20, 2018, legalized the regulated production of hemp. This triggered a corresponding amendment of the Controlled Substances Act (CSA), removing “hemp” from the definition of marijuana and specifically excluding “tetrahydrocannabinols (THC) in hemp” from the listing of Schedule 1, or most dangerous, drugs. Hemp is now defined as cannabis plants and derivatives thereof, such as CBD, that contain “no more than 0.3% THC on a dry-weight basis,” and is no longer a controlled substance under the CSA. However, hemp remains subject to regulation by both state and federal government agencies and violation of production and distribution of hemp in violation of state law can result in criminal penalties and seizure of the…

Courts are Unlikely to Enforce Cannabis Patents

Patents play an important role in American business by encouraging innovation and investment. The Cannabis industry, which has obtained thousands of patents, is no exception. At least one owner of Cannabis patents has filed a patent infringement action to enforce those patents against a competitor (United Cannabis Corp. v. Pure Hemp Collective, Inc., Case No. 18-cv-01922(WJM-NYW) D. Colo., filed July 30, 2018). Unfortunately, under a long line of authorities going back to The Highwayman’s Case in 1725, the illegality of the use, possession, and distribution of these products probably creates an insurmountable barrier to the enforcement of most Cannabis product or use patents. The US PTO has issued patents on Cannabis products, despite Cannabis’ status as a Schedule 1 controlled substance. The PTO has a longstanding policy of issuing patents claiming inventions that may be illegal under federal laws, including the Food Drug and Cosmetics Act (In Re: Brana, 51 F.3d 1560 (Fed Cir 1995)) and the Federal Insecticide, Fungicide, and…

Investing in the Cannabis Industry and Picking the “Next Hot Pot Company” from an Intellectual Property Perspective

There has been explosive growth in the cannabis industry, and there is a dizzying array of choices for those looking to invest in this emerging industry. Who will be hot and deliver strong returns? Who will fizzle and fail in the wake of growing competition? Who is investing in innovation and differentiation? In our view, one way to measure the prospects of a cannabis company’s future success is to look at its level of innovation and its commitment to securing intellectual property rights (IP) for those innovations. While cannabis companies may face issues with respect to the enforceability of their IP rights in the US since cannabis remains illegal at the Federal level, ignoring the potential value of IP in a quickly evolving global landscape could leave investors empty handed. IP-savvy cannabis companies can and should use utility patent protection to protect new and useful things they develop, where they are sufficiently valuable. For example, a utility patent might cover new…