Cannabis IP rights: Register now or wait until full legalisation?

As lawful medical and recreational use of cannabis and derivatives accelerates in most major economies, new businesses can and should begin to carve out their own niches in this space using intellectual property.

The question is whether businesses should start obtaining their rights now or wait until the relevant marketing authorisations or any necessary decriminalisation have been secured. Our clear view is that businesses, considering entry into this space, should take these steps ahead of time.

IP protection is not generally dependent on the legality of the underlying product: the key IP rights – copyright, trade marks, plant variety rights, design right and patents – principally depend on originality or novelty: what the users then do with that intellectual property is generally unrestricted.

However, there are still some issues regarding public policy and illegality that must be confronted.

To obtain a patent, for instance, the novelty of an invention needs to be demonstrated and that the idea is ‘capable of industrial application’ ie of at least some potential commercial use.

There is one limitation: ‘A patent shall not be granted for an invention the commercial exploitation of which would be contrary to public policy or morality’. However the legislation (the Patents Act 1977) goes on to say that ‘exploitation shall not be regarded as contrary to public policy or morality only because it is prohibited by any law in force in the United Kingdom or any part of it’.

In truth, this should not be an issue: already medicinal cannabis is (subject to conditions) available for lawful sale in over 22 countries (including in Canada and in 34 US states). And of course a filing directed at the medicinal use of cannabis or a CBD or THC compound may still give consequential protection to the same product or method once the legal recreational audience enlarges.

Equally, for trade marks, the key element is whether the mark (usually a word or logo) is distinctive and is not deceptive. A trade mark cannot however be registered if its registration would be contrary to public policy or to accepted principles of morality. Applications therefore for European marks such as ‘MH17’ (referencing the Malaysian Airlines flight MH17) and ‘Bin Ladin’ were refused on this basis.

Further, the mark cannot be registered if its use would be prohibited. Note the condition here is that the prohibition relates to the use of the mark rather than the sale or distribution of the underlying product. There are in fact increasing numbers of registered marks using expressions such as ‘get high’ for nutritional supplements, ‘Cannabis Red Power’ for beer and ‘Mjardin Premium Cannabis’ for medicinal herbs. And these registrations are across the whole EU even though only half of member states have so far legislated for medicinal or recreational usage.

For copyright (which would protect artwork or pictures, for instance), the subsistence of copyright is not affected by any issue as to immorality or illegality. But as to its later enforcement, courts however sometimes do decline to enforce the copyright if obviously contrary to public interest. There have been rare cases where relief has been refused where the copyright work was to further some illegal purpose.

Another key area is plant variety rights (also known as plant breeders’ rights): these largely protect the propagation of root stocks of new plant varieties but generally do not affect the distribution or sale of the harvested material. The rights are given by national offices after examination and generally extend for 20-25 years.

A new plant variety right will be granted, for instance, under EU legislation, if ‘distinct, uniform, stable and new’. Those are the only conditions. However, once granted, the rights cannot be exercised to violate against, inter alia, ‘public morality, public policy or public security ..(or) .. the protection of health and life of humans…’

Key recommendations:

1. Intellectual Property (IP) rights are generally concerned with novelty and originality – not with whether the relevant products may still have current legal challenges regarding full manufacture and sale;
2. Be aware however that most IP rights have some limitations regarding public policy and illegality – but the controls here are very limited and most businesses entering into this space should be able to address these;
3. Consider key IP filings in countries even ahead of decriminalisation;
4. Choose highly distinctive marks: as your brand becomes more visible, a strong unassailable mark is key;
5. Some rights eg. patents and design rights are limited or invalidated by prior publicity or disclosure – so take early advice if you identify something for which IP rights might be sought.