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Richard Naiberg
Quality From Canada

Protecting Intellectual Property In Canada: A Practical Guide, Part 1

By Richard Naiberg
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Richard Naiberg

Cannabis producers are making large investments in new technologies to improve their plant varieties, production know-how and product formulations. At the same time, producers are working hard to create and promote more compelling, top-of-mind brand identities for their improved products. The series concludes with a 9-point outline of specific steps cannabis producers need to consider taking to protect their key intellectual property assets. 

The value of these investments cannot be realized if competitors are allowed to copy and exploit the producer’s successes. Canada’s intellectual property laws can and should be used to protect cannabis producers from such predation. Invoking Canada’s laws to this end is not difficult and does not have to be expensive. It does, however, require specific, deliberate and early action.

This series of articles outlines the principal means of protecting intellectual property rights in the core technologies and marketing programs of cannabis companies. The series also highlights what any cannabis company must do to ensure that its own activities do not run afoul of another’s rights. No company wants to begin a new venture only to face a lawsuit for intellectual property infringement.

The series concludes with a 9-point outline of specific steps cannabis producers need to consider taking to protect their key intellectual property assets.

Trade Secrets: Protection For Confidential Know How

A trade secret is specific, commercially valuable information and know-how that is kept confidential within the company and cannot generally be reversed-engineered by outsiders. A trade secret provides protection over any type of information or know-how and is not subject to any expiry date. Trade secret protection is lost only when the information or know-how becomes available to the public.

As a best practice, defining the trade secret in a confidential document can be useful as a way of restricting access to the secretCannabis producers generate all kinds of valuable know-how that cannot be appreciated simply from an inspection of the vended product. Examples would include methods of crossbreeding, cultivation, harvesting, extraction and processing. Customer lists and other internal business structures and information may also qualify as trade secrets.

There are no statutory pre-conditions that must be met to obtain a trade secret. A trade secret is acquired simply upon the generation of valuable information or know-how that is kept confidential. As a best practice, defining the trade secret in a confidential document can be useful as a way of restricting access to the secret, and as evidence in proceedings as to the scope of the trade secret (an issue that is frequently in dispute in such cases).

For the trade secret to be maintained, the producer will need to take steps to ensure that access to the know-how and associated documents is restricted only to those who need to know the secret for purposes of carrying out their functions at the company. All personnel with access to the trade secret will need to be bound to confidence by employment agreement and/or by separate contract. When employees leave, they ought to be reminded of their obligations of confidentiality and must be prohibited from removing any documentation regarding the trade secret from the company. All outside companies who need access to the secret must sign non-disclosure agreements. It is typical for owners of trade secrets to be vigilant in their market surveillance and to engage private investigators when they suspect a trade secret has been stolen.

A trade secret’s very confidentiality provides its principal value. A competitor cannot copy what it has no ability to discern. However, when someone with access to the secret ‘goes rogue’, such as by using the know-how for his or her own account or for that of a new employer, the owner of the trade secret must act quickly and bring the matter before the Court. The Court has a broad discretion to stop the rogue and any persons or companies who learn the secret from the rogue from further dissemination or exploitation of the trade secret. The Court also has a broad discretion to craft an appropriate remedy to compensate the trade-secret owner for the wrong. If the action is brought before the trade secret is broadly disseminated, the trade secret may be reinstated and enforceable in the future. If the owner of the secret acts too slowly and the dissemination of the trade secret becomes too broad, the trade secret may be lost forever.

Adopting the use of trade secrets to protect know-how in the cannabis business does suffer from the fragility of the right itself. One disclosure, however inadvertent, can destroy the protection. In addition, a trade secret will not protect a company from a competitor who independently derives the know-how. Further, theft of the trade secret can be difficult to spot because, by its nature, the trade secret is exploited within the walls of the competitor company and is not evident in the marketed product. The owner of the secret will need to watch its competitors for telltale shifts in business direction and product offerings, particularly when those competitors hire the ex-employees of the owner of the trade secret. It is typical for owners of trade secrets to be vigilant in their market surveillance and to engage private investigators when they suspect a trade secret has been stolen.


Editor’s Note: In part 2 of this series, which will be published next week, Richard Naiberg will take a closer look at patents and how business can protect new and inventive technology in Canada’s cannabis industry. Stay tuned for more!

Top 10 Common Findings Detected During Cannabis Laboratory Assessments: A Guide to Assist with Accreditation

By Tracy Szerszen
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With the cannabis industry growing rapidly, laboratories are adapting to the new market demand for medical cannabis testing in accordance to ISO/IEC 17025. Third-party accreditation bodies, such as Perry Johnson Laboratory Accreditation, Inc. (PJLA), conduct these assessments to determine that laboratories are following relevant medical cannabis testing standard protocols in order to detect potency and contaminant levels in cannabis. Additionally, laboratories are required to implement and maintain a quality management system throughout their facility. Obtaining accreditation is a challenge for laboratories initially going through the process. There are many requirements outlined in the standard that laboratories must adhere to in order to obtain a final certificate of accreditation. Laboratories should evaluate the ISO 17025 standard thoroughly, receive adequate training, implement the standard within their facility and conduct an internal audit in order to prepare for a third-party assessment. Being prepared will ultimately reduce the number of findings detected during the on-site assessment. Listed below is research and evidence gathered by PJLA to determine the top ten findings by clause specifically in relation to cannabis testing laboratories.

PJLA chart
The top 10 findings by clause

4.2: Management System

  • Defined roles and responsibilities of management system and its quality policies, including a structured outline of supporting procedures, requirements of the policy statement and establishment of objectives.
  • Providing evidence of establishing the development, implementation and maintenance of the management system appropriate to the scope of activities and the continuous improvement of its effectiveness.
  • Ensuring the integrity of the management system during planned and implemented changes.
  • Communication from management of the importance of meeting customer, statutory and regulatory requirements

4.3: Document Control

  • Establishing and maintaining procedures to control all documents that form the management system.
  • The review of document approvals, issuance and changes.

4.6: Purchasing Services and Supplies

  • Policies and procedures for the selection and purchasing of services and supplies, inspection and verification of services and supplies
  • Review and approval of purchasing documents containing data describing the services and supplies ordered
  • Maintaining records for the evaluation of suppliers of critical consumables, supplies and services, which affect the quality of laboratory outputs.

4.13: Control of Records

  • Establishing and maintaining procedures for identification, collection, indexing, access, filing, storage and disposal of quality and technical records.
  • Providing procedures to protect and back-up records stored electronically and to prevent unauthorized access.

4.14: Internal Audits

  • Having a predetermined schedule and procedure for conducting internal audits of its activities and that addresses all elements that verify its compliance of its established management system and ISO/IEC 17025
  • Completing and recording corrective actions arising from internal audits in a timely manner, follow-up activities of implementation and verification of effectiveness of corrective actions taken.

5.2: Personnel

  • Laboratory management not ensuring the competence and qualifications of all personnel who operate specific equipment, perform tests, evaluate test results and sign test reports. Lack of personnel undergoing training and providing appropriate supervision
  • Providing a training program policies and procedures for an effective training program that is appropriate; identification and review of training needs and the program’s effectiveness to demonstrate competence.
  • Lack of maintaining records of training actions taken, current job descriptions for managerial, technical and key support personnel involved in testing

5.4: Test and Calibration Methods and Method Validation

  • Utilization of appropriate laboratory methods and procedures for all testing within the labs scope; including sampling, handling, transport, storage and preparation of items being tested, and where appropriate, a procedure for an estimation of the measurement of uncertainty and statistical techniques for analysis
  • Up-to-date instructions on the use and operation of all relevant equipment, and on the handling and preparation of items for testing
  • Introduction laboratory-developed and non-standard methods and developing procedures prior to implementation.
  • Validating non-standard methods in accordance with the standard
  • Not completing appropriate checks in a systematic manner for calculations and data transfers

5.6: Measurement Traceability

  • Ensuring that equipment used has the associated measurement uncertainty needed for traceability of measurements to SI units or certified reference materials and completing intermediate checks needed according to a defined procedure and schedules.
  • Not having procedures for safe handling, transport, storage and use of reference standards and materials that prevent contamination or deterioration of its integrity.

5.10: Reporting the Results

  • Test reports not meeting the standard requirements, statements of compliance with accounting for uncertainty, not providing evidence for measurement traceability, inaccurately amending reports.

SOP-3: Use of the Logo

  • Inappropriate use of PJLA’s logo on the laboratories test reports and/or website.
  • Using the incorrect logo for the testing laboratory or using the logo without prior approval from PJLA.
HACCP

Hazard Analysis and Critical Control Points (HACCP) for the Cannabis Industry: Part 3

By Kathy Knutson, Ph.D.
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HACCP

Parts One and Two in this series have defined Good Manufacturing Practices, introduced Hazard Analysis and Critical Control Points (HACCP) and explained the first HACCP step of hazard analysis. A food safety team will typically work from a flow diagram to identify biological, chemical or physical hazards at each step of processing and packaging. Once the hazard is identified, the severity and probability are debated. Hazards with severe consequences or high probability are carried through the HACCP plan as Critical Control Points (CCPs).

Critical Control Points definedHACCP is a do-it-yourself project.

Where exactly will the hazard be controlled? CCPs are embedded within certain steps in processing and packaging where the parameters, like temperature, must be met to ensure food safety. Failure at a CCP is called a deviation from the HACCP plan. The food safety team identifies where manufacturing problems could occur that would result in a product that could cause illness or injury. Not every step is a CCP! For example, I worked with a client that had several locations for filters of a liquid stream. The filters removed food particles, suspended particulates and potentially metal. We went through a virtual exercise of removing each filter one-by-one and talking through the result on controlling the potential hazard of metal. We agreed that failure of the final filter was the CCP for catching metal, but not the other filters. It was not necessary to label each filter as a CCP, because every CCP requires monitoring and verification.

Identification of a CCP starts more documentation, documentation, documentation.

Do you wish you had more reports to write, more forms to fill out, more data to review? No. Nobody wants more work. When a CCP is identified, there is more work to do. This just makes sense. If a CCP is controlling a hazard, you want to know that the control is working. Before I launch into monitoring, I digress to validation.

CCP validationThis is where someone says, “We have always done it this way, and we have never had a problem.”

You want to know if a critical step will actually control a hazard. Will the mesh of a filter trap metal? Will the baking temperature kill pathogens? Will the level of acid stop the growth of pathogens? The US had a major peanut butter recall by Peanut Corporation of America. There were 714 Salmonella cases (individuals) across 46 states from consumption of the contaminated peanut butter. Imagine raw peanuts going into a roaster, coming out as roasted peanuts and being ground into butter. Despite the quality parameters of the peanut butter being acceptable for color and flavor, the roasting process was not validated, and Salmonella survived. Baking of pies, pasteurization of juice and canning all rely on validated cook processes for time and temperature. Validation is the scientific, technical information proving the CCP will control the hazard. Without validation, your final product may be hazardous, just like the peanut butter. This is where someone says, “We have always done it this way, and we have never had a problem.” Maybe, but you still must prove safety with validation.

The hazard analysis drives your decisions.

Starting with the identification of a hazard that requires a CCP, a company will focus on the control of the hazard. A CCP may have one or more than one parameter for control. Parameters include time, temperature, belt speed, air flow, bed depth, product flow, concentration and pH. That was not an exhaustive list, and your company may have other critical parameters. HACCP is a do-it-yourself project. Every facility is unique to its employees, equipment, ingredients and final product. The food safety team must digest all the variables related to food safety and write a HACCP plan that will control all the hazards and make a safe product.

Meeting critical limits at CCPs ensures food safety

The HACCP plan details the parameters and values required for food safety at each CCP.The HACCP plan identifies the minimum or maximum value for each parameter required for food safety. A value is just a number. Imagine a dreadful day; there are problems in production. Maybe equipment stalls and product sits. Maybe the electricity flickers and oven temperature drops. Maybe a culture in fermentation isn’t active. Poop happens. What are the values that are absolutely required for the product to be safe? They are often called critical limits. This is the difference between destroying product and selling product. The HACCP plan details the parameters and values required for food safety at each CCP. In production, the operating limits may be different based on quality characteristics or equipment performance, but the product will be safe when critical limits are met. How do you know critical limits are met?

CCPs must be monitored

Every CCP is monitored. Common tools for monitoring are thermometers, timers, flow rate meters, pH probes, and measuring of concentration. Most quality managers want production line monitoring to be automated and continuous. If samples are taken and measured at some frequency, technicians must be trained on the sampling technique, frequency, procedure for measurement and recording of data. The values from monitoring will be compared to critical limits. If the value does not reach the critical limit, the process is out of control and food safety may be compromised. The line operator or technician should be trained to know if the line can be stopped and how to segregate product under question. Depending on the hazard, the product will be evaluated for safety, rerun, released or disposed. When the process is out of control, it is called a deviation from the HACCP plan.

A deviation initiates corrective action and documentation associated with the deviation. You can google examples of corrective action forms; there is no one form required. Basically, the line operator, technician or supervisor starts the paperwork by recording everything about the deviation, evaluation of the product, fate of the product, root cause investigation, and what was done to ensure the problem will not happen again. A supervisor or manager reviews and signs off on the corrective action. The corrective action form and associated documentation should be signed off before the product is released. Sign off is an example of verification. Verification will be discussed in more detail in a future article.

My thoughts on GMPs and HACCP were shared in a webinar on May 2nd hosted by CIJ and NEHA. Please comment on this blog post below. I love feedback!