Marijuana Business Magazine July 2019

Marijuana Business Magazine | July 2019 96 But that doesn’t mean cannabis businesses can’t protect their intellectual property and build brand awareness through patents and federal trade- marks—the latter is applicable if the application doesn’t involve a plant-touch- ing side of the business. In fact, marijuana and hemp business- es are rushing to file hundreds of federal trademark and patent applications, and it’s something many others should con- sider. Trademarks and patents not only can protect and enhance a brand, they can also increase the company’s value, experts agreed. “If you really have something novel, then you should be per- sistent,” said Constance Finley, founder of Constance Therapeu- tics. The San Francis- co-based vape and extract processor has won two federal patents, including one for a CBD-vitamin E combination. It also has several pending trademark applications to protect its wordmarks (design of the company’s name) and logos. Finley said she talked with cannabis ex- ecutives who essentially told her she was foolish to spend so much time and money to try to protect her intellectual property. But the effort has paid off, she said. Constance Therapeutics now has pat- ents in 20 countries, including Australia, Canada, Israel, members of the Europe- an Union and the United States. Finley estimates those patents have increased the value of her company by as much as $120 million. The patents provide third-party manufacturers, distributors, retailers and supply-chain partners the certainty and incentive to promote products without worry of price erosion due to competi- tors offering the same goods. Hoban Law Group patent attorney Kevin Fortin, who is working with Finley on an intellectual property strategy, said MJ and hemp businesses should look at it this way: “Trademarks insure your marketing dollars, and patents insure your product- development dollars. Both impact valuation when the wave of industry consolidation hits.” WHEN PATENTS MAKE SENSE Why should you patent something? “If you have an invention that has value, offers a competitive advantage and you believe you might want to keep other people from using it, then it makes sense to patent,” said Vincent Capuano, a patent attorney with a specialty in cannabis for the Boston office of law firm Duane Morris. A patent can be granted only for an invention that is “nonobvious” or novel. arijuana products technically aren’t eligible for federal trademarks because the plant is illegal under the Controlled Substances Act. Cannabis and hemp businesses increasingly should consider protecting their intellectual property and brand, industry officials and attorneys agreed. The process doesn’t have to be expensive: Companies can lower their costs by doing much of the research and other legwork themselves. Here are factors to keep in mind: • Patents can be obtained if the invention is “novel” and nonobvious. The U.S. Patent and Trademark Office doesn’t care that marijuana remains illegal under the Controlled Substances Act. • It’s important for patent applicants to include data or other evidence that shows the device or formula produces a surprising result or superior effect. • Plant-touching marijuana products aren’t eligible for federal trademarks. But cannabis businesses have found success in trademarking their wordmark (the design of the company name) and logos for things such as clothing, websites, consulting services, education-related information and more. • Hemp legalization has opened the floodgates for trademark applications. Cannabis companies with hemp-related trademarks may be able to enforce their trademarks against marijuana products that cause consumer confusion. Kevin Fortin Constance Finley Making & Mark your Protecting It