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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.

Copyright Controversies: Examining the Proposed EU Copyright Directive

With the growth of the Internet, new questions about copyright protection have arisen. How does a copyright holder effectively prevent a user from infringing their work online? Should internet service providers be responsible for infringement? How do principles of territoriality come into play? What is a reasonable balance between users’ rights and copyright holders’ rights? Various cases, directives and statutes have attempted to address these and similar issues. One recent proposal that attempts to address online copyright infringement is the “Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on copyright in the Digital Single Market” 2016/0280 (COD).

Set to be voted on September 12, 2018, the proposed EU Copyright Directive contains articles that both create exceptions to copyright law and bolsters copyright holders’ power. The directive allows cultural heritage institutions to copy works “in their collections” for the “sole purpose” of preservation and “text and data mining” for research purposes is permissible. Most controversial are articles 11 & 13 of the Directive. Article 11 mandates internet and social media companies to pay “press publications” for posting parts of their works. Article 13 requires content providers, like Youtube, to implement measures to combat copyright infringement on their websites and inform copyright rights holders if infringement occurs. Article 13 lists content recognition technologies as an example of a copyright infringement-fighting measure.

Supporters of the provisions argue that they ensure news providers and artists are adequately compensated for their work. In contrast, organizations like Human Rights Watch, argue that Article 13 threatens freedom of expression and the suggested content recognition technologies introduce an “obligation to monitor”. Additionally, some argue that content recognition technologies would not recognize exceptions to copyright law like parody. Like in many conflicts, important values seem to collide.

Whatever the result of Wednesday’s vote, strong reactions will be assured.

 

 

Not in Vein: Patenting Vein Imaging Technology for Identification Purposes

To some, it might seem like 1984 is becoming reality. Recently, Apple patented a method, in the USA, for identifying people using vein recognition. Titled “Vein imaging using detection of pulsed recognition”, this patent protects an “optical transmitter” that emits “infrared radiation” on a “living subject”, an “optical receiver” that creates a “output” that is indicative of the “modulation of pulses” and a processor that creates an “image of blood vessels” based off the pulses’ modulation.  Vein imaging would be much more difficult to forge than other forms of biometric identification like fingerprinting.

With the patent only granted this week, it will be interesting to see the public reaction to this patent. Biometric identification, in general, has been a subject of both praise and criticism. Some security experts have lauded biometric identification because it does away with the need for memorizing passwords or number codes. They might be even more receptive to a type of biometric identification with a low risk of failure

However, others take a more critical approach to biometric identification. Some argue that biometric identification is a threat to people’s civil liberties and they are concerned about the storage of such data. For example in 2016, the American Civil Liberties Union, along with other groups, criticized a FBI biometric database for inadequately protecting privacy rights. One wonders how such organizations will respond to vein imaging. Since vein imaging has higher degrees of accuracy and civil liberties groups frequently argue that biometric identification is wrong, will they more receptive of it compared to other types of such identification? On the other hand, will they view its increased accuracy as particularly invasive?

Whatever the public reaction will be, it will most likely be a strong one.

 

Patent Protected: An Analysis of MilliporeSigma’s Patent in China

Recently, there has been a growing interest in CRISPR gene-editing technologies. CRISPRs are “memories” found in archaea and bacteria that help protect the body against pathogens. Such gene-editing technologies are promising because they are simpler to use than other gene-editing technologies and have the potential to fight cancer, increase crop yield and reverse organ damage. Due to this increasing interest, many companies are patenting CRISPR gene-editing technologies in various jurisdictions. Today, China granted MilliporeSigma a patent for its “chromosomal integration” CRISPR technology.

This grant comes at a particularly interesting time. On April 19 2018, the State Council of China expressed its desire to increase the importation of foreign “innovative” drugs into China. Several proposed mechanisms to achieve this goal included stronger intellectual property protections for such medicines, customs exemptions and making it easier to commercialize such products. Granting a patent for efficient gene-editing technologies seems to be related to China’s broader legal and policy objectives.

With all this in mind, it will be interesting to see the number of patents China grants this year and what subject-matter will be protected by such patents.

 

 

Not Facebook Friends. Examining the Intellectual Property Dispute between BlackBerry and Facebook.

Recently, BlackBerry sued Facebook, Whatsapp, and Instagram for infringing its patents. While the exact details are currently unknown to the general public, the alleged infringement pertains to BlackBerry Messenger.

What is particularly interesting is Facebook’s response to Blackberry. Facebook alleges that Blackberry has failed in “innovation” and is instead trying to “tax the innovation of others”. This statement most likely refers to Blackberry’s steadily decreasing prominence in the cellular device market and the growth of other companies.

Most would feel Facebook’s response is just the standard response of an opponent but its response actually touches upon larger issues. That is the controversy of software patents. Some argue that software patents can encourage economic growth and innovation. However, others suggest such patents harm start-ups, encourage patent trolling and protect “trivial” innovations. For example, IBM was subjected to criticism for patenting an “Out-of-Office” email feature last year and subsequently decided to no longer enforce this patent. Facebook’s statement seems to suggest Blackberry is trolling competitors and stifling competition.

With BlackBerry believing they have a “strong claim” against Facebook, it will be interesting to see the rendered decision and what impact it might have on the broader field of software patents.

Canada and Taiwan: A New Patent Prosecution Highway Pilot Arrangement

On February 1, 2018, the Taiwan Intellectual Property Office and the Canadian Intellectual Property Office executed a temporary Patent Prosecution Highway (PPH) pilot arrangement. Now if TIPO or CIPO approve an applicant’s claim, the applicant can ask the other office to process their respective claim faster. According to CIPO, the goal of this agreement is to improve “patent quality” and decrease “examination workload”.

One interesting factor about this arrangement is Taiwan is usually somewhat isolated from the international community with regards to intellectual property law. Taiwan is not signatory to the Berne Convention or the Madrid Protocol. Despite implementing a PPH arrangement with Canada, Taiwan is not a member of the Global PPH. Taiwan seems to be taking a step away from this general isolation.

Additionally, this PPH arrangement has come at a particularly geopolitically relevant time. In late 2017, the Government of Canada expressed interest in raising its profile in Asia. With a Patent Prosecution Highway between CIPO and the European Patent Office leading to an increase in respective patent filings, Canada might have felt a PPH with Taiwan would lead to a similar result. Taiwan is a major player in the semiconductor manufacturing and fabrication space and this PPH may enable Canadian companies to obtain intellectual property rights faster in this market.

On Taiwan’s side, the Taiwanese President wants Canada to support Taiwan’s accession to the Comprehensive and Progressive Trans-Pacific Partnership. They might feel joining the PPH signals their commitment to international agreements.

With all this in mind, it will be interesting to see what happens next.

 

Update those Privacy Settings! An Examination of Facebook’s Response to the General Data Protection Regulation.

In 2016, the European Parliament passed the General Data Protection Regulation (GDPR) which is set to come into effect May of this year. The GDPR will synchronize European data protection policies, strengthen privacy rights, mandate “data protection by design and default”, require corporations to inform EU citizens if their accounts have been hacked and make it easier for EU nationals to access their data. This legislation is particularly interesting for several reasons. Firstly if one violates these policies, the fine can be as large as 4% of the corporation’s global revenue.  Secondly this policy additionally applies to non-EU organizations, any entity that handles EU citizens’ data must comply. Who would be concerned by that information? Facebook.

Facebook has often come under fire from critics for having weak privacy protections. Facebook critics object to the difficulties some Facebook users have when trying to find privacy settings.  In response to the pending enforcement of this legislation, Facebook recently said that they will place all their privacy settings in one place, so people will find it easier to “manage their data”.

It will be interesting to see how the EU reacts to this statement. Will they feel it is enough or that it is not protective enough of their nationals’ privacy? Additionally with Facebook’s response in mind, it will be interesting to see how other corporations change their privacy policies.

 

Mum’s the word? Never mind: Analyzing a recent decision mandating the release of Uber’s business records.

Around two years ago, Broward County, Florida permitted Uber to operate at the local airport as long as they paid the respective county and kept monthly business records. Traditional taxi service companies, like Yellow Cab, were not pleased with this state of affairs and initiated a public records request. Uber stated these records were trade secrets and did not have to be disclosed. A Florida judge felt differently and ruled these documents were not trade secrets and did have to be made public. Uber is planning on appealing the decision.

That the case occurred in Florida is particularly relevant for several reasons. Florida has an interesting, seemingly contradictory, approach to both public records and trade secrets. The state mandates that government agencies must make their transactions public bar some exceptions which include trade-secrets. Interestingly, the Florida Statutes actually states that the disclosure of trade-secrets is a felony. Furthermore in 2016, Florida, with the desire to attract business, ruled some types of financial information were trade-secrets.

With this decision and Florida’s policies in mind, it will be interesting to see how companies react. While some of Florida’s protections for maintaining financial information’s confidentiality encourage businesses to operate in Florida or while this case frighten them?

Intellectual Property 2017: A Year in Review

It is hard to believe that 2017 is coming to an end but the New Year is just around the corner. Many would agree that 2017 was an eventful year and intellectual property law was no exception to this statement. Below, we will share some important, ground-breaking, funny or interesting intellectual property stories from 2017.

January 2017: The World Trade Organization finalized a 2005 TRIPS waiver that permits Third-World countries to import drugs made under “compulsory licensing” arrangements. The waiver required 2/3 of the WTO members’ support and in January 2017, they got these required votes. This decision highlights the balancing act between accessibility and ensuring an inventor’s right to profit.

February 2017: The European Parliament approved the Comprehensive Economic and Trade Agreement (CETA). Free trade agreements frequently present many questions about intellectual property in the international context and require changes to domestic legislation. Due to this trade agreement, Canada has to protect new geographical indications. One such GI is feta cheese.

March 2017: Due to public backlash, IBM donated a patent for the “out of office” email feature to the public. This technology is more than 20 years old. IBM’s donation highlights public opinion’s effect on challenging unpopular intellectual property.

April 2017: World Intellectual Property Day always falls on April 26! This day celebrates innovation’s many benefits.

May 2017: The UK Court of Appeal ruled that Kit Kat’s shape is not worthy of trade-mark protection. They decided it is not “distinctive” enough.

June 2017:  In AstraZeneca Canada Inc. v Apotex Inc., Canada’s Supreme Court abolished the promise doctrine. This doctrine stated a patent had to meet all its promises and this requirement was strict by international standards. What is interesting is the Court’s decision primarily focused on what constituted  “good law”. Little attention was paid to international standards.

July 2017: During the summer, students are probably not thinking about the textbooks but the Federal Court was. In Canadian Copyright Licensing Agency v. York University, the Federal Court ruled York’s policy that students could photocopy up to ten percent or one chapter of a textbook was not “fair dealing”. They argued this exception was “arbitrary”.

August 2017: India granted Pfizer’s anti-pneumonia drug, Prevenar 13, a patent. Critics, like Doctors without Borders, feared this decision would threaten accessibility because India is a major exporter of generic drugs.

September 2017: The European Court of Justice sent a fine, for an anti-trust violation, against Intel back to a lower court to review. Previously, the lower court decided Intel blocked competition. This case highlights broader, philosophical questions about how to regulate technology giants.

October 2017: In a case fitting for the season, Rasta Imposta sued Kmart for trade-dress and copyright infringement when Kmart unveiled a banana costume that was similar to Rasta Imposta’s costume.

November 2017: Counter counterfeiting. The European Commission instituted new policies to fight counterfeit items. Such policies include improving efforts to fight counterfeiting with other jurisdictions and creating a watch list of nations that are common sources of fake goods. With Canada ranking among the top source of fake goods, the Canadian government might be concerned about this watch list.

December 2017: Let’s block the copycats. The Shantou Intermediate People’s Court ruled that Bela, a Chinese company, copied Lego’s packaging and thus had engaged in copyright infringement. This decision came after China instituted a crackdown on intellectual property infringement. China might have wanted to fight frequent criticisms that they do not adequately protect foreign companies’ intellectual property.

These are just some of 2017’s fascinating news stories about intellectual property. We are all wondering what 2018 will bring.

Wishing our readers a safe and happy 2018.

 

No Copycats on this Block: Examining a LEGO Copyright Case

Recently, the Lego Group won a case against a Chinese company that copied their blocks. The Shantou Intermediate People’s Court ruled that Bela, the infringing company, “must stop copying the packaging and logos of LEGO products in the future, as this constitutes copyright infringement.”

The court’s decision is particularly significant because foreign companies have frequently complained that China does not adequately protect against intellectual property theft. With concerns about this perception, China implemented a crackdown on intellectual property infringement in September 2017. One of the crackdown’s specific policies was to fight copyright infringement. This decision is one of the court’s post-September 2017 earlier decisions.

Related, another Chinese office ruled in favour of a different foreign company that alleged trade-mark infringement. Santa Maria Novella, an Italian cosmetics producer, successfully argued trade-mark infringement before the Chinese Trade-Mark Office.

The individual cases and more general crackdown are most likely indicative of broader, economic trends. The Chinese Minister of Commerce, on December 11 2017, stated China is a “firm proponent” of international trade. With rulings favouring foreign companies, China might be encouraging them to invest or operate within China.