The ever-growing cannabis industry has induced evolution in both the business and legal worlds. In the past few years, legal sales of cannabis for medical and recreational purposes have significantly increased and are projected to continue rising. The cannabis industry includes both plant-touching and ancillary businesses. Plant-touching businesses focus on breeding and cultivating the cannabis plant, extracting its compounds, and dispensing it. Ancillary businesses involve “everything but the plant”, i.e., cultivation supplies, extraction equipment, smoking accessories, as well as the legal, marketing, and financial aspects of the industry.
As the cannabis industry booms, tensions between state and federal law have been created. While more and more states have legalized the medical and recreational growing, sale, and use of cannabis, federal law still forbids it. However, federal legalization may be looming, especially with the government being under Democratic control. Supreme Court Justice Clarence Thomas indicated, in a recent statement denying cert. for Standing Akimbo, LLC, et al. v. United States, that intrastate regulation of marijuana may no longer promote the Federal Government's interests.
Ethical rules for attorneys, particularly in the IP world, also come into play. Patent Rule 11.102 (d) states that “[a] practitioner shall not counsel a client to engage, or assist a client, in conduct that the practitioner knows is criminal.” It is important for attorneys to know which ethical rule regime is followed in the state where they are advising a client regarding the cannabis industry. Some states, such as Virginia, are silent and follow along with Patent Rule 11.102 (d), while other states have explicit or generic carve-outs or ethics opinions regarding cannabis.
When it comes to prosecuting cannabis-related patents, it is important to be informed about Federal law. The USPTO has issued cannabis-related patents in the past; the US government has upheld these patent rights, indicating no ethical issues for attorneys prosecuting cannabis patents. The duty of disclosure is vital in prosecution, as there is limited cannabis-related prior art for examiners to consult. Initial USPTO access to relevant prior art also helps when it comes to enforcement of the patent.
To federally register a cannabis-related trademark, the use in commerce of the mark must be legal. There must also be compliance with the Controlled Substances Act regarding source of extraction and THC content. If the mark is being used for a drug, food, or beverage, it must comply with the Food Drug and Cosmetics Act.
With the differences and tensions between state and federal law and the ethical implications regarding the growing, sale, and use of cannabis-related products and technologies, it is vital to have a well-informed and experienced attorney to guide you, particularly in the prosecution and enforcement of patents for such products.
Originally Published 10 January 2022
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.