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What a Looming Patent War Could Mean for the Future of the Marijuana Industry

On August 4, 2015, US officials quietly made history by approving the first-ever patent for a plant containing significant amounts of THC, the main psychoactive ingredient in marijuana, according to the patent's holders, their lawyers, and outside experts in intellectual property law.

Patent No. 9095554, issued to a group of breeders in California, "relates to specialty cannabis plants, compositions and methods for making and using said cannabis plants and compositions derived thereof," according to the 145-page document, which is filled with charts, graphs, and reams of scientific jargon describing a range of hybrid strains with distinctive ratios of cannabinoids.

"There is a real need for cannabis varieties for potential medical use that produce modulated THC concentrations and varying concentrations of other pharmacologically active substances," the patent says. "There is also a need for healthier cannabis for recreational use with reduced negative side effects from THC. The inventions described herein meet that long-felt need."

But while the patent may inaugurate a new era of acceptance for marijuana in the US, it also opens up a new source of turmoil for the fast-growing industry: disputes over the intellectual property rights to America's most potent and innovative marijuana strains.

"It's going to be a mess," said Tim Blake, a longtime grower and activist who founded California's annual Emerald Cup cannabis competition. Marijuana growers developing new varieties, he added, "are going to have to spend a lot of money on attorneys."

When big corporations eventually decide to enter the market and compete with smaller growers, the stakes will be even higher — and the competition even fiercer.

Yes, You Can Patent Pot
A spokesperson for the US Patent and Trade Office confirmed that officials are now accepting and processing patent applications for individual varieties of cannabis, along with innovative medical uses for the plant and other associated inventions.

"In general, the [patent] office issues both utility and plant patents to all types of plants, including cannabis and poppy, provided the applications meet and comply with the applicable patent statutes," said the spokesperson, who asked not to be named. "There are no special statutory requirements or restrictions applied to marijuana plants."

Though American cannabis cultivators have long had bigger legal problems to worry about than the question of who owned the rights to potent strains like Green Crack, Strawberry Cough, Trainwreck, Girl Scout Cookies, or Alaskan Thunderfuck, Patent No. 9095554 may be the opening salvo in a new series of legal battles over innovations in marijuana breeding.

The prize could be nothing less than the commanding heights of an industry that's projected to soon top $40 billion, with the exclusive rights to produce, sell, or license designer varieties of pot. Over the next few years, the contest could take the form of a gold rush for patents.

"A well-written patent is like a declaration of war — you write a patent in a way that covers those who can sue you, and those you can sue," said Reggie Gaudino, a Ph.D. in molecular genetics who works as director of intellectual property for Steep Hill Labs, a US firm that analyzes medical and recreational marijuana for compliance with public safety standards.

‘These people aren’t worried about the Department of Justice anymore. Now they’re worried about Monsanto.’

Concern is rising among legal-pot pioneers about the need to lawyer up to defend their creations from imitators and patent trolls, as well as from multinational corporations in the agriculture, tobacco and pharmaceutical industries that are thought to be watching the fast-growing industry from the sidelines, despite overt denials.

"If the laws change and the big companies move in, I think we'll have a period of turmoil around ownership, patenting, the whole business," said Erich Veitenheimer, a patent lawyer and partner at Cooley LLP in Washington, DC, who represented the patent holders of No. 9095554.

Some worry that confusion surrounding intellectual property rights for different marijuana strains could create an opportunity for companies like American agricultural behemoth Monsanto to stomp the industry by taking advantage of patenting techniques that the firm has already used to dominate the seed trade in other crops, such as soybeans and corn.

Many small pot farmers are more scared of corporate competition than they are of criminal prosecution, according to Hilary Bricken, a Seattle lawyer who chairs the Canna Law Group of the firm Harris Moure, which supports marijuana businesses.

"These people aren't worried about the Department of Justice anymore," said Bricken, who has represented cannabis enterprises in commercial litigation and has consulted on intellectual property issues. "Now they're worried about Monsanto."

A number of patents for the medical use of cannabis already exist, but Patent No. 9095554 is the first to be issued for a plant that contains significant amounts of THC, according to Veitenheimer, Gaudino, and Jonathan Page, a botanist who co-founded the cannabis biotech company Anandia Labs and who co-led the team that sequenced the first cannabis genome.

"Our patent lawyers were really, really surprised that there weren't more applications" for individual strains or classes of cannabis, said Michael Backes, one of the patent's three listed inventors and the author of Cannabis Pharmacy: The Practical Guide to Medical Marijuana. His lawyers, he noted, "expected a ton of them, and there weren't any. Ours was the first."

Cannabis seeds. (Photo vis Flickr)

In America, new varieties of plants, produced either through traditional breeding or as genetically modified organisms (GMO), can be considered intellectual property just like music, art, books, software, and architectural design — a fact that has allowed Monsanto to sue farmers for planting patented seeds that weren't purchased from licensed vendors.

So far, marijuana breeders are working in the traditional way, and nobody is known to be attempting to produce GMO marijuana.

Rumors that Monsanto had started doing so forced the company to post a standing denial on its website. "Monsanto has not and is not working on GMO marijuana," the company says. "This allegation is an Internet rumor."

The firm "has no plans for working on cultivating cannabis," said Charla Lord, a spokesperson for Monsanto.

Representatives of big tobacco companies also said that their businesses aren't interested in pot. Brian May, spokesperson for Altria, which controls the Marlboro and Parliament brands through its subsidiary Philip Morris USA, said, "Our position is marijuana remains illegal under federal law, and Altria's companies have no plans to sell marijuana-based products."

Those denials haven't been enough to quiet concern in the American marijuana industry about what may happen on the intellectual property frontier if and when legalization spreads across the country.

"There are all sorts of problems on the horizon if something doesn't happen," said Steep Hill's Gaudino. "This kind of confusion is exactly what Monsanto wants. They want their access unfettered so they can take over without having to pay anybody."

‘These small farmers think they’re going to compete against these big brands. But they’re either going to have to scale up or be satisfied being the little honey stand on the side of the road.’

Recent decades have seen an explosion of powerful strains of pot bred by small-time growers with names like Blue Dream, Northern Lights, Death Star, God's Gift, Purple Urkle, Skywalker, White Rhino, Chemdawg, and Blue Cheese.

Breeders who long toiled in the shadows are now beginning to seek patents for their innovative strains the way any other horticulturalist might seek a patent for a new type of rose, green bean, or sugar beet.

"We're being approached by quite a few of these so-called underground breeders who have come to the surface and are now interested in patenting," Veitenheimer said. "But they understand it's only for their new varieties, which are different from anything else out there."

A marijuana grow operation in Colorado. (Photo via Pixabay)

"To obtain a utility patent, the claimed strain must be new and unobvious over existing strains," the spokesperson for the US Patent and Trade Office explained. "The strain must also exhibit markedly different characteristics from its naturally occurring counterpart in its natural state."

This "novelty" requirement means marijuana varieties that already exist in the public domain should, in theory, be safe from patent trolls, lawyers said — although it may also mean that the true inventors of celebrated pot strains may not be able to stake claims through the patent office for their inventions.

But just because you can't patent something that's already in the public sphere doesn't mean people won't try.

"It wouldn't surprise me if someone, knowingly or unknowingly, tried to gain a patent on something that's already in the public domain," said Veitenheimer.

The Open Cannabis Project
Some in the sector are attempting to turn the novelty requirement into an impediment for big business, or anyone else, to seek patents for existing strains of marijuana.

The Open Cannabis Project is an organization that is collecting DNA samples of cannabis strains in order to publish them in a massive database. The aim is to have a large catalog that can be used to properly classify strains and prove, on a genetic basis, that a given strain was available to the public before someone tries to take out a patent on it.

"We're sequencing the DNA of thousands of strains of cannabis," said Mowgli Holmes, a board member of the Open Cannabis Project who has a Ph.D. in microbiology from Columbia University. "You can't use that data to patent plants. But you can use it to show that something is in the public domain."

"A lot of people are worried about what's going to happen with patents," he added. "There's a polarization in the grower community between people who are terrified of Monsanto and who want to stop them from patenting things, and other people who are terrified of Monsanto but want to patent their own strains before Monsanto does."

Holmes is also chief scientific officer at Phylos Bioscience, a biotechnology firm that is working to extensively map the cannabis genome. Phylos, which has pledged to give its data to the Open Cannabis Project when complete, unveiled an interactive map illustrating an array of genetic links between different strains of marijuana on Wednesday.

"We've been generally taking the stance that patents are stupid, and they're not going to help anybody," he remarked.

Holmes expressed surprise, however, that many small-time growers he spoke to were hesitant to share samples with the Open Cannabis Project because they themselves plan to secure patents someday.

"We figured everyone would love this," he said. "But in northern California, we've gotten a lot of pushback. People say, 'No, I don't want my stuff to be in the public domain. I want to patent it.'"

Marijuana, Software, and Craft Beer
The pot world might follow the path of other new industries, like software or semiconductors, in which an early spirit of collaboration eventually gave way to corporate secrecy.

Early IT engineers from different companies used to meet up in the bar after work to swap ideas and share stories at a time when software was thought to be "unpatentable," recalled Thomas Schneck, patent attorney and owner of the firm Patent Valley.

"As the industry started to mature, it became more competitive, and all of a sudden secrets developed," Schneck said. "As marijuana becomes more widely used and the big guys get involved, things will change. We'll see more patents in this area."

Many close observers of the American pot industry expect it to end up looking a lot like the beer market, with a few large players dominating mass production and distribution while smaller craft producers produce high quality, artisanal buds.

"I think we'll have our Nordstroms of cannabis, our Walmart of cannabis, whatever that looks like," said Bricken. "I do think it will become a commodity."

Tim Blake of the Emerald Cup agreed.

"Big business is coming in from all sides," he said. "These small farmers think they're going to compete against these big brands. But they're either going to have to scale up or be satisfied being the little honey stand on the side of the road."

Blake has watched his Emerald Cup expand enormously since it started 13 years ago, when some entrants showed up in masks or disguises, afraid to be observed by law enforcement.

"People thought we'd get busted," he said.

Today, the Emerald Cup has become so mainstream that Blake has moved the event from his own property to the sprawling Sonoma County Fairgrounds in Santa Rosa, California. This year, he expects 25,000 visitors.

The expansion of the Emerald Cup has mirrored the rapid legalization of cannabis in many states. Marijuana is now legal for medical use in 24 states and the District of Columbia, and legal for recreational use in four. Recreational pot smoking could be allowed in as many as 10 more states, including California, after the next round of ballot initiatives this November.

Bipartisan legislation pending in Congress called the CARERS Act, co-sponsored by Senators Cory Booker (D-NJ), Rand Paul (R-KY), and Kirsten Gillibrand (D-NY), would also reclassify marijuana from a Schedule I controlled substance to Schedule II and allow greater access to medical marijuana — a change that would begin to bridge the gap between federal and state law as the federal government acknowledges certain medicinal uses.

"This bill takes the threat of federal prosecution away from families that are complying with the laws of their state, but depending on federal government intervention, could legitimately end up being arrested and prosecuted," Booker told VICE News. "This is a bill that will allow states to control their own destinies, to create their own laws when it comes to medical marijuana."

But as marijuana legalization gains momentum in the US, the trappings of corporate America are close behind.

The question many growers now face is whether to make use of corporate tools or seek out alternative methods to thwart the system, according to Dale Hunt, a San Diego attorney who focuses on intellectual property in life sciences, including cannabis.

"Once cannabis is legal, no one will be able to stop the patent office from granting patents on it," including to big firms and small farmers alike, he said. "The question is, do you want to be on the sharp end of that spear, or do you want to be on the handle?"

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Can Marijuana “Brands” Be Legally Protected Against Copying?

In states like California, where medical marijuana is a big business, dispensaries often feature dozens of kinds of marijuana. Each has it own (supposed) qualities, often reflected in the price per gram. And these names, while colorful, are pretty standardized: newspapers like the LA Weekly run pages of ads that list prices for “White Widow,” “Skywalker OG,” “Strawberry Kush,” and “Charlie Sheen”.

Can you trademark a strain of marijuana to keep a competitor from copying your “brand”? The answer is more complicated than you might think.

First, names like Strawberry Kush are not necessarily brands, but more like plant varieties, such as Meyer lemon or Alphonso mangoes. Plant varieties in general cannot be trademarked. Instead, breeders essentially get a form of plant patent. Growers and breeders can add a trademark on top of that, but the underlying plant variety name ultimately goes into the public domain for all to use. In other words, Fuji apples are a variety; Ranier Brand Fuji Apples is a trademark. A competitor can’t call their Fuji apples “Ranier”, but nothing stops a competitor from identifying their apples as Fujis.

But other pot monikers – like “Charlie Sheen” – don’t refer to a plant variety, but to . . . well, how you might behave if you smoke it. These labels could serve as trademarks – i.e., names or other symbols that identify the source of products. But does what works for apples work for marijuana? In 2010, the federal Patent and Trademark Office created a medical marijuana category for trademark registration. After receiving a number of submissions, someone at the PTO—perhaps wise in the ways of Congress—thought better of this idea and killed it.

The brief life of the federal pot category doesn’t mean a trademark cannot be claimed for a medical marijuana name. It appears that no such trademark has ever been successfully registered at the federal level. And when someone tried to trademark “Marijuana” for a drink, the PTO denied it on the grounds that “the term MARIJUANA refers to an illicit drug that is associated with illegal behavior and adverse health consequences. The proposed mark is therefore immoral or scandalous and thus unregistrable.”

That said, trademark protection under both state and federal law does not require registration of the trademark with the government, but merely that the mark actually be used in commerce to identify the source of a particular product or service. That is already happening. But that doesn’t mean that courts are ready yet to enforce pot trademarks. Medical marijuana lies at the frontier of licit and illicit goods, and until that changes, courts are apt to find ways to avoid lending the business any additional legitimacy. So for the moment, the pot industry lacks many of the protections other products have against copying. Much the same used to be true for pornography—another field that went, more or less, from illegal to legal and along the way gained greater IP protections. Some 17 states, and the District of Columbia, permit medical uses of marijuana. If (or, more likely, as) this trend continues, IP protection is sure to follow.