Tag Archives: United States Patent and Trademark Office

Unique Issues With Cannabis-Related Patents & Their Enforcement

By Michael Annis, Liam Reilly
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While enforcement of cannabis patents through litigation is common, there are other alternatives to litigation. Here we discuss some of the unique cannabis-related issues that could arise before the Patent Trial and Appeal Board (PTAB) of the United States Patent and Trademark Office (USPTO).

The growth and evolution of the cannabis industry in the U.S. are not slowing. However, the cannabis industry – with its tremendous upside – is still beset with uncertainty and limited legal guidance curbing its full potential. Intellectual property law, including patent protection, has emerged from the murky legal and regulatory landscape as a reliable business strategy with developing certainty.

pioneering cannabis patent case in Colorado has progressed without any indication that cannabis patents are to be treated differently than other patents. Relatedly, PTAB recently upheld the validity of a cannabis-related patent as part of a post-grant proceeding. However, although the courts and the USPTO are not discriminating against cannabis patents because of their illicit subject matter, the true strength of these newly issued patents could be suspect.

The fledgling nature of cannabis businesses and the fact that cannabis is just now emerging from its statutorily imposed dormancy combine to highlight certain weaknesses of the USPTO and its mechanisms meant to strike spurious patents.

For several reasons, it is possible that applicants are propelling cannabis patent applications of questionable validity through prosecution beyond the point that similar applications could proceed. The USPTO’s experience with cannabis patents is limited. The universe of prior art available to patent examiners is also limited. There are only about three thousand active cannabis patents, which would only account for 0.6 percent of the total issued patents in 2015. The legal status of cannabis has also likely deterred the broadcasting of public use as prior art, and enabling publications or other public disclosures covering cannabis (e.g., published scientific studies) are limited as well. Taken together, patent examiners considering applications for cannabis patents are at a disadvantage compared to other applications that the USPTO considers in other fields.

Additionally, the post-grant proceedings before PTAB established to review issued patents of questionable validity are not designed to handle the historical context and unique issues of cannabis patents. The difference in the procedural rules and requirements of two common inter partes mechanisms for challenging issued patents, post-grant reviews (PGRs) and inter partes reviews (IPRs), creates a gap in coverage that is particularly salient to cannabis patents.

Although the cannabis patent case in Colorado is first of its kind, we can expect more to follow in its wake.Where a PGR petitioner is free to challenge an issued patent on effectively any ground, an IPR petitioner is limited to validity claims for lack of novelty or non-obviousness based solely on patents and printed publications. However, the PGR petitioner must be diligent, because it only has nine months from the issue date of the challenged patent to file a PGR petition. After those nine months, the challenger will have to rely on litigation or an IPR, with its limited basis for invalidity.

What this means for a cannabis patent is that unless a challenger – likely, a competitor in the cannabis space – can timely file a petition for a PGR, the basis for challenging the patent before PTAB are limited to those types of prior art that are especially rare in the cannabis space: patents and printed publications. What is more, meeting the nine-month requirement to file a PGR is no trivial task. The cost and time required to research and prepare a petition for PGR are particularly problematic for the cannabis industry with its lack of access to traditional forms of business financing.

As a result, it is reasonable to question the validity of contemporary cannabis patents. Further, because of PTAB’s enforcement gap, a patent challenger will likely have to resort to litigation to bring its invalidity arguments unrelated to claims of lack of novelty and non-obviousness based on patents and printed publications. Such broader invalidity arguments could include lack of patentable subject matter – which is an appealing challenge for patents that stem from naturally occurring plants or products, such as cannabis – or lack of novelty and non-obviousness based on other prior art.

Although the cannabis patent case in Colorado is first of its kind, we can expect more to follow in its wake. And, because of the weaknesses at the USPTO and PTAB, invalidity arguments in these early cases will likely be of increased strategic importance than in typical patent cases.

US Patent & Trademark Office Issues Guidance for Trademarking CBD Products

By Aaron G. Biros
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Last week, the United States Patent and Trademark Office (USPTO) published an Examination Guide to provide further clarity for how they assess the legitimacy of trademarks for cannabis products. For the uninitiated, the 2018 Farm Bill, which President Trump signed into law on December 20, 2018, removed hemp-derived cannabidiol (CBD) from the Controlled Substances Act. In order to register a trademark in the United States, the mark must be used in a lawful setting, meaning that the USPTO does not register trademarks for products that violate federal law- even if it is legal under state law.

In their guidance document, the USPTO identifies the distinction between hemp and other cannabis varieties as the basis for either issuing or refusing a trademark registration. This means that in the trademark application, companies need to specify that the cannabis product is derived from hemp, or cannabis with less than 0.3% THC in dry weight.

The USPTO clarifies that applications for trademarks that involve CBD filed before December 20, 2018 will be refused, but if they amend the filing date to after that date, the registration will be examined. Below is a direct quote from their examination guide clarifying this:

For applications filed before December 20, 2018 that identify goods encompassing CBD or other cannabis products, registration will be refused due to the unlawful use or lack of bona fide intent to use in lawful commerce under the CSA. Such applications did not have a valid basis to support registration at the time of filing because the goods violated federal law. However, because of the enactment of the 2018 Farm Bill, the goods are now potentially lawful if they are derived from “hemp” (i.e., contain less than 0.3% THC). Therefore, the examining attorney will provide such applicants the option of amending the filing date and filing basis of the application to overcome the CSA as a ground of refusal.

The USPTO’s Examination Guide explicitly mentions the authority of the FDA to regulate products derived from cannabis, much like the 2018 Farm Bill’s language. There is still some confusion in the cannabis industry surrounding the marketing and sale of hemp products under FDA regulation.

FDAlogoUnder the Federal Food Drug and Cosmetic Act (FDCA), using a drug in a food or dietary supplement that is currently undergoing clinical trials is illegal (as is the case here- see Epidiolex for an example of CBD being used as an active ingredient in an FDA-approved clinical trial). According to the USPTO, this means that “registration of marks for foods, beverages, dietary supplements, or pet treats containing CBD will still be refused as unlawful under the FDCA, even if derived from hemp, as such goods may not be introduced lawfully into interstate commerce.”

Regarding trademarks for services involving “cannabis and cannabis production,” the USPTO also issued guidance. This section of the Examination Guide pertains to companies applying for a trademark that fall in the category of ancillary services, such as growing supply companies, lighting, nutrients, pest control and packaging, among other service providers. Basically, this section boils down to the same distinction the Farm Bill made between hemp and other varieties of cannabis. An applicant for a trademark needs to make clear their identification of services offered as involving cannabis containing less than 0.3% THC.

For a helpful guide breaking down what this means for cannabis companies pursuing a trademark registration, Christiane Schuman Campbell, partner at Duane Morris LLP, published this client alert about the USPTO’s examination guide.

David Kluft headshot

How to Protect Your Trademarks When You Can’t Protect Your Trademarks

By David Kluft
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David Kluft headshot

Federal trademark registrations are invaluable tools for emerging businesses. They put the world on notice of a company’s name; they can secure nationwide priority over others using similar names; they distinguish a product in the marketplace; they provide crucial advantages in trademark infringement lawsuits; and they are instrumental in building goodwill. But if you sell cannabis, a federal trademark registration will not do any of those things for you … because you can’t get one.

Someday, the USPTO policy may change and there could be a gold rush for federal cannabis trademark registrations.The United States Patent and Trademark Office (USPTO) continues to refuse to register federal trademarks for cannabis businesses, even if the sale of cannabis is legal in the state where the businesses are located. The USPTO’s reasoning goes something like this: federal trademark law allows for the registration of trademarks associated with goods in “lawful” commerce, which means that the goods are not illegal under federal law. Cannabis, and its psychoactive component, THC, remain Schedule I substances under the federal Controlled Substances Act (CSA). Therefore, irrespective of state laws to the contrary, and irrespective of whether the federal law is actually enforced, the manufacture and sale of cannabis is not “lawful” commerce.

This reasoning is of fairly recent vintage. In 2009, by which time about fifteen states had legalized medical cannabis, Attorney General Eric Holder announced that the Drug Enforcement Administration would cease raids on state-sanctioned medical cannabis facilities. The USPTO followed Holder’s lead in 2010 and created a new category of acceptable goods and services for marks related to “medical marijuana.” Within months, however, the USPTO had retreated from this “mistake” and changed its practice manual expressly to preclude such registrations.

David Kluft headshot
David Kluft, partner in the Boston office of Foley Hoag, LLP

Many argue that the USPTO’s position is unjustifiable as a matter of public policy. Making it easier to infringe the trademarks of state-sanctioned businesses does not advance the purposes of the CSA, and it directly undermines a key goal of trademark law, which is to prevent the proliferation of confusingly similar trademarks. But the merits of these arguments have been lost on the USPTO, which continues to refuse to register marks for anything it perceives to be prohibited by the CSA.

So if you own a cannabis business, what can you do to protect your goodwill while the federal government maintains its current policy? Below are some ideas. Admittedly, none of them– individually or collectively – is a substitute for federal registration. But each of them is better than nothing, and all of them may help to establish your ownership and priority when and if the USPTO changes its policy.

  1. State Trademark Registrations. Each state has its own trademark registration system. State registration may offer protection from infringers within the state, or at least within the parts of the state where the registrant operates, and for that reason alone it is probably worth the small cost involved. However, state registration will have little to no efficacy outside the state. You cannot use a State A registration to file a lawsuit in State B, or to stop infringement in State B, or even to prevent conflicting registrations in State B. Additionally, most state trademark registrants, unlike federal registrants, do not benefit from presumptions of validity and ownership in the litigation context.
  2. Related Federal Registrations. Many cannabis businesses also pursue federal registrations for whatever aspects of their business are not prohibited by the CSA. For example, even though the USPTO refused the POWERED BY JUJU mark for cannabis vaporizers (because it was CSA-prohibited “paraphernalia”), it allowed the same company to register the same mark for “vaporizers for smoking purposes not for use with cannabis.” The USPTO has also allowed registrations for cannabis-related business consulting (e.g., CANNACARD; PRAIRIEJUANA); investment analysis (e.g., FORTUNE420); clothing (e.g., CANNABIS COUTURE, THE MARIJUANA COMPANY); and for CBD – as opposed to THC – derivatives (e.g., CBD LIQUID GOLD). Once the USPTO permits federal registrations for cannabis marks and the inevitable disputes over ownership arise, such federal registrations for these related products and services are likely to be highly persuasive evidence in the registrants’ favor. Moreover, even in the current legal climate, federal registrations (especially when cited in a demand letter) are of great practical use in convincing others not to use confusingly similar marks.
  3. Common Law Unfair Competition. Unfair competition is a state common law cause of action that was a precursor to modern trademark law, and it is still available to protect commercial goodwill even in the absence of a state or federal trademark registration. However, unfair competition law has similar territorial restrictions as state registration. In some cases, the protected territory may be even narrower, limited only to the area within which the plaintiff can prove consumer recognition of the mark.
  4. Other Intellectual Property Protection. Copyright law, unlike federal trademark law, has no “lawful” commerce requirement, and the U.S. Copyright Office regularly issues registrations for cannabis-related copyrights. While copyright will not protect a short phrase such as a business name, it will protect a creative logo design or original packaging, and can be very effective when it comes to getting infringing uses taken down from the internet. Note also that the USPTO does not appear to have the same qualms about legality when it comes to patents, and it often grants patent protection to useful, new and non-obvious inventions related to the cannabis industry.
  5. Save stuff. Finally, if you do nothing else, save stuff. Document that first sale; keep a copy of that first shipping invoice; and save that file containing your original packaging design. Someday, the USPTO policy may change and there could be a gold rush for federal cannabis trademark registrations. Your lawyer is going to ask you for proof of your first uses of the mark, and you don’t want your response to be a glassy stare. So keep your eyes on the eventual prize and stay ready.