High stakes

by Brandon Middleton (bmiddleton@wlj.com) 311 views 

Medical marijuana is brand new in Arkansas, and even newer in other states in our region like Oklahoma, where voters just approved medical marijuana last month. Yet, the legal proceedings following the Arkansas Medical Marijuana Commission’s announcement of the recipients of the limited number of cultivation licenses clearly show the competition is already fierce, and with good reason.

The weed business is good business. In Colorado, for example, nearly $5 billion of marijuana sales (medical and recreational) have been made since 2014. As with any business, the brand, product and proprietary information of a marijuana business are vital business assets for growth and success. But to make sure competitors aren’t playing puff-puff-pass with these assets, measures must be taken to protect them.

Trademark rights, for example, help a business protect its brand identifiers — or the parts of the business that protect the goodwill and reputation the business has established with the public (e.g. brand names, logos or slogans). Federally registered marks provide the strongest protection, allowing enforcement of trademark rights anywhere in the United States. Federal trademark rights are governed by federal law, and in order to register a mark federally, the applicant must show legal “use in commerce.”

Of course, this can be challenging for marijuana businesses because the sale of marijuana is not allowed by federal law. Still, with a little bit of strategy and creativity, protection for a marijuana brand may still be possible.

For example, while it may not be possible to file a federal trademark application showing an existing legal use in commerce on marijuana products themselves, it is certainly possible to show legal use in commerce on ancillary products, so long as those products are not used in furtherance of illegal use. Thus, for example, your medical marijuana business may be able to register a trademark for services such as providing information to consumers regarding the health benefits of medical marijuana or for legal herbal products used for medicinal purposes.

One factor considered by courts in determining whether one mark is “confusingly similar” to a registered mark —and therefore infringes the registered mark — is whether the marks are used on similar products or services. Having protection on a mark in connection with some product or service closely related to marijuana, but able to satisfy the legal use in commerce requirement, provides some arguments for enforcement of your mark against competitors selling marijuana-related products based on the similarity of the products sold.

Less burdensome from a legal gymnastics standpoint and just as important in protecting business assets, patent protection can also be sought for a variety of novel marijuana-related inventions. Patent protection can be sought for a method of processing active ingredients from marijuana plants, devices for consuming marijuana, methods for treating medical conditions using marijuana and products integrating marijuana such as oils, supplements or other products. Marijuana plants themselves can even be patented in some cases.

Alternatively, if the proprietary processes, ingredients or know-how associated with a marijuana business are not known to others, the information may be kept as a trade secret, particularly if the technical information would be difficult to reverse engineer or is likely to be undiscovered by competitors. In these cases, taking measures such as implementing confidentiality policies and executing nondisclosure agreements is vital to keeping the information a protectable trade secret.

As the marijuana industry continues to grow, so will competition among businesses. Securing IP rights is a critical task for marijuana businesses looking to grab a piece of the market, and a failure to protect these rights could see the company go up in smoke.
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Editor’s note: Brandon Middleton is an attorney with Little Rock-based law firm Wright Lindsey Jennings. A registered patent attorney, he focuses his practice on various intellectual property matters. The opinions expressed are those of the author.

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