Turning Over a New Leaf: Intellectual Property and Legal Cannabis

Introduction

Cannabis legalization is around the corner. On October 17, 2018, the Cannabis Act comes into effect and possession of 30 grams or less of dried cannabis will be permitted.[1] Cannabis is a lucrative business and many entrepreneurs are probably looking to profit from this industry.[2]

Like any business owner, cannabis entrepreneurs would want to protect their products and intellectual property might help here. For example, a holder of a cannabis licence could register a trade-mark for their good.[3] Currently, there are over 100 trade-mark applications for cannabis and cannabis-related goods.[4] Other forms of intellectual property protection, like patents, might also be relevant. At the same time though, the Cannabis Act places significant restrictions on promoting cannabis and this could limit available intellectual property.[5]

With this in mind, we will discuss relevant considerations for cannabis entrepreneurs in the below sections.

Intellectual Property Protection: Not Just Helpful For Licence Holders   

  • The most obvious people to benefit from intellectual property protection would be licence holders. However, they are not the only ones.
  • Law enforcement will need an effective way to test potentially cannabis-impaired drivers. Canada plans to use the Drager DrugTest 5000 which relies on a saliva sample.[6] However, this test resulted in false positives in approximately fourteen percent of cases and it is especially error-prone in colder climates.[7]
  • Cannabis smokers and the general public would want a more accurate test for cannabis-impairment.
  • An individual could create an improved testing device and potentially patent this product. This device would have to be new, useful and inventive to be patentable.[8]

Trade-mark Protection: Know Your Limits

  • The Trade-marks Act bars trade-marking certain marks. Some marks include “obscene words”, the term “Royal Canadian Mounted Police”, and the Royal Arms.[9]
  • Trade-mark applications for cannabis, “cannabis accessories” and a “service related to cannabis” will be subject to additional restrictions.[10] The Cannabis Act states the brand elements, related to marijuana, cannot evoke emotions about “a way of life such as one that includes glamour, recreation, excitement, vitality, risk or daring.”[11] Brand elements include trade-marks.[12]
  • Conflicts might arise about what constitutes a trade-mark that evokes a “way of life” that includes excitement, risk or glamour.[13] An entrepreneur might not view their trade-mark application as evoking “recreation” but the Registrar of Trade-marks might feel differently. [14]
  • A cannabis entrepreneur has to consider this reality when brainstorming potential names for their products and services.

 Statements of Opposition: Special Considerations for Cannabis

  • Related to the stricter constraints on trade-marking terms for cannabis, “cannabis accessories” and a “service related to cannabis”, it would be easier to oppose such trade-mark applications.[15]
  • Within two months of a trade-mark application’s advertisement, anybody can submit a statement of opposition, regarding the application, to the Canadian Intellectual Property Office.[16] One permitted ground of opposition is that the application is “not registrable”. [17] Prohibited marks are barred from registration.[18]
  • An opponent could argue a trade-mark application for cannabis that evokes a glamourous “way of life” is a prohibited mark and should not be registered.[19] In contrast, a party could not argue that a trade-mark for a soda brand is a prohibited because it invokes a glamourous lifestyle.
  • Trade-mark opposition proceedings can be long and complex. They would require additional time, resources and attention from already busy business owners.
  • The greater possibility, compared to other industries, of facing a time-consuming trade-mark opposition is something cannabis entrepreneurs should strongly consider.

Industrial Designs: A Potential Friend

  • When one hears the term “intellectual property”, the first words that come to mind are probably patents, trade-marks and copyright. An often overlooked type of intellectual property is an industrial design.
  • Industrial designs protect the “features of shape, configuration, pattern or ornament and any combination of those features that, in a finished article, appeal to and are judged solely by the eye.”[20]
  • Industrial designs could protect cannabis accessories. Such examples include obtaining industrial designs for colourful patterns on rolling paper or uniquely-shaped bongs.[21]
  • What is especially interesting is that the Cannabis Act does not explicitly mention industrial designs in the definition of “brand elements”.[22] At the same time though, they do mention related terms like graphic designs or “graphic arrangements”.[23]

Conclusion

Like any entrepreneur, intellectual property protection may benefit cannabis entrepreneurs. Intellectual property, like trade-marks and industrial designs, could protect both cannabis accessories and cannabis. Additionally, intellectual property’s advantages are not just limited to licence holders. Legal cannabis will require effective drug-impairment testing devices and the inventors of such products could potentially obtain patents.

At the same time, cannabis entrepreneurs might also face unique challenges. A term that would be acceptable to trade-mark for a restaurant, might not be acceptable to trade-mark for a cannabis accessory. Like entrepreneurs more generally, cannabis entrepreneurs, who are interested in IP, would be wise to seek out the advice of an intellectual property lawyer or licensed trade-mark agent.

If cannabis entrepreneurs approach intellectual property protection smartly and cognizant of their limits, they may get the chance to experience many highs.

Please note this piece is for informational purposes only and should not be construed as legal advice.

References

[1]Cannabis Act, SC 2018, c 16, s 8(1)(a).

[2]Sophia Harris, “Pot companies on hiring spree ahead of lucrative legal market”, CBC News (24 June 2018), online:< https://www.cbc.ca/news/business/pot-cannabis-marijuana-jobs-canopy-growth-medreleaf-1.4718771> [http://archive.is/YPJ4f]. Some projections say Canadians will spend approximately $4.34 billion on marijuana in 2019.

[3]“Cannabis Licensing Application Guide: Application Requirements and Process to Become a Licence Holder under the Cannabis Act and its Regulations” (last modified 11 July 2018), online: Government of Canada < https://www.canada.ca/en/health-canada/services/publications/drugs-health-products/cannabis-licensing-guide.html#2 > [http://archive.is/qCEEz]. One needs a licence to cultivate or process marijuana. Provinces will regulate the sale of marijuana.

[4]“Canada Trade-marks Database, Search: Cannabis” (last modified 9 October 10), online: Government of Canada < https://www.ic.gc.ca/app/opic-cipo/trdmrks/srch/home > [http://archive.is/INtZ1].

[5]Supra note 1 at ss 17 & 21.

[6]Oliver Moore “Company demonstrates roadside cannabis testing device amid reports of machine’s failing” “Company demonstrates roadside cannabis testing device amid reports of machine’s failings”, The Globe and Mail (11 September 2018) <https://www.theglobeandmail.com/cannabis/article-company-touts-reliability-of-roadside-cannabis-testing-device-amid/%3E/&gt; [http://archive.is/xSru5].

[7]Ibid.

[8]Canadian Intellectual Property Office, “A Guide to Patents” (last modified 26 September 2018), online: Government of Canada, <https://www.ic.gc.ca/eic/site/cipointernet-internetopic.nsf/eng/h_wr03652.html#marketingLicensingPatent > [http://archive.is/QT58B].

[9]Trade-marks Act, RSC 1985, c T-13, s 9(1). The above examples are not exhaustive.

[10]Supra note 1 at s 2(1).

[11]Ibid at s 17(1)(e).

[12]Ibid at s 2(1).

[13]Supra note 1 at s 17(1)(e).

[14]Ibid.

[15]Ibid at s 2(1).

[16]Supra note 9 at s 38(1).

[17]Ibid at s 38(2)(b).

[18]Ibid at s 12(1).

[19]Supra note 1 at 17(1)(e).

[20]Industrial Design Act, RSC 1985, c I-9, s 2.

[21]Ibid at s 5.1(a). Utilitarian features are not protected.

[22]Supra note 1 at s 2(1)

[23]Ibid.

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