The cannabis industry in the IP arena

31 December 2022

The cannabis industry in the IP arena

When it comes to the legalization of cannabis, Asia lags behind Europe and North America, reports Excel V. Dyquiangco. But laws are beginning to come into play to protect the intellectual property behind a variety of hemp-based drugs.

For some countries in the Asia-Pacific region that have already legalized cannabis for its medicinal or its recreational purposes, seeking to protect brand names and innovations from other market competitors, just like those of any other business, is crucial. That is why depending upon national laws, cannabis companies and their products can be protected with the help of plant patents, utility patents, plant variety protection rights (PVPR) or plant breeder’s rights (PBR) and trademark rights. 

But more than that, the question remains whether there is any international or cross-border manufacture of cannabis products, and how companies avoid running afoul of different laws in different places. In Hong Kong, for example, you can’t even bring a small amount of CBD oil into the city for personal use. At the end of January, the city’s government banned CBD, or cannabidiol, as a “dangerous drug” and imposed harsh penalties for its possession.  

Those in favour of freer CBD use say it can help relieve stress and inflammation without the associated high of its relative THC, the psychoactive ingredient in marijuana. CBD was also banned in mainland China in 2022. 

Places with more mature cannabis use do have laws which can protect its branding and composition.  

“Generally, a genetically modified plant can be patented as this is deemed to be an invention, while a particular strain of a plant – which is made from crossing different strains of a plant – would be protected under plant variety rights,” said, George Chan, a partner and head of Beijing Intellectual Property Agency at Simmons & Simmons in Beijing. “Patent protection is preferable, when available, as this provides for a longer term of protection and is supported by a more comprehensive and developed legal framework.” 

He adds that with respect to China, people may find it surprising to note that while the Chinese government has taken a very strong position against recreational marijuana, the country is a leader in the field of marijuana innovation and holds a large majority of global patents relating to marijuana. He says that on the other hand, China does not recognize new cannabis (i.e. cannabis sativa L) strains as a variety of plant that should be protected under its plant variety laws. 

“Trademark protection can also apply to cannabis, but trademarks are used in relation to cannabis to identify its source,” he says. “The best example I can provide you with would be Coca-Cola and Pepsi Cola. Both are colas, but their trademarks are used to identify their source, which also refers to their subtle but important differences. In this way, vendors of recreational or medicinal marijuana can create a brand to market their particular type(s) of marijuana.” 

Federally trademarked? 

Given that premise, can cannabis products be federally trademarked, since the legality of such products varies from region to region? 

George says that while cannabis and cannabis products can be trademarked in some countries, cannabis per se cannot be trademarked in China. However, this does not prevent the registration of trademarks associated with cannabis derivatives. 

“Trademarks function to identify a source of goods, and the type of goods associated with the trademark needs to be listed for a trademark registration,” he says. “Using cannabis derivatives as an example, which have been shown to have some medicinal benefits, instead of using cannabis derivatives for a trademark registration, we can call it a ‘pharmaceutical preparation’. Expanding on this example, if a client wanted to apply for the BLAZE trademark for a cannabis derivative, I would recommend that they register the BLAZE trademark for use in association with ‘pharmaceutical preparations for humans’. 

In Sri Lanka, the applicable law is the specific statutory restrictions – which means a prohibition against cultivation, a prohibition against import and export, and a prohibition against possession and use of any preparation from the hemp plant.  

“There are, of course, exceptions,” says Anomi Wanigasekera, a partner at Julius and Creasy in Colombo. “The Ayurveda Act allows ayurvedic physicians to obtain opium and cannabis for manufacture of their medicinal preparations. The Ayurvedic Drugs Corporation in the Ministry of Health is the only legal source for cannabis on the island, and it mostly obtains the drug from police raids on illegal shipments. The only practitioners that are legally allowed to sell the drug are Ayurvedic physicians.” 

She adds that there have been recent political arguments relating to promoting the cannabis industry. “Cannabis cultivation can solve the foreign exchange crisis if legalized and exported with state patronage to earn foreign exchange. This is also to legalize cannabis for self-immunization. Currently, Ayurvedic practitioners obtain legal cannabis from the government as a windfall from seized illegal cannabis, which is often poor quality and old by the time it reaches them. In 2017, Sri Lanka announced the intent to create a 400-hectare cannabis plantation to provide cannabis for Ayurvedic practitioners”. 

International cross-border manufacture 

According to Mudit Kaushik, a partner at Verum Legal in Delhi, there are many big cannabis growing companies like Scotts Miracle-Gro Company and Trulieve that produce cannabis products for other countries because the demand for cannabis products is increasing daily. The global cannabis products market is expected to grow from US$28 billion in 2021 to US$35 billion in 2022. Its valuation is expected to touch US$91.5 billion in 2028 at a compound annual growth rate of 26.3 percent. 

“Many nations import cannabis for medical purposes, including Germany, which sources its supply from Portugal, the Netherlands and Canada,” he says. “In Germany, over 128,000 patients receive medical cannabis in Germany annually. More than 100,000 people in Israel require cannabis-based therapies, hence Israel imports significant amounts of cannabis from other nations.” 

He adds that the use of cannabis is prohibited by federal law in the United States, although many states have passed their own legislation to circumvent this prohibition. The recreational use of cannabis has been legalized in 21 states; Washington, D.C.; Guam; the Northern Mariana Islands; and the U.S. Virgin Islands. Another 10 states have decriminalized its use. 

“Meanwhile, the use of marijuana for medicinal purposes is permitted in the District of Columbia and 35 other states. Some of them only cover a small number of ailments. These states permit the restricted use of CBD (cannabidiol), a substance with therapeutic benefits that does not cause the user to become psychoactive. Although the Netherlands has a developed cannabis law, there are still some gaps that users take advantage of. For example, although it is illegal to sell cannabis there and only citizens are permitted to purchase it, these laws do not apply to coffee shops in Amsterdam that are permitted to sell it to non-citizens.” 

“The Narcotics Drugs and Psychotropic Substances Act of 1985 of India does not completely outlaw cannabis, and it may be utilized for industrial, horticultural, and medical uses with the appropriate permissions from the government,” he says. “This kind of oddity is also prevalent in Indian legislation. Nevertheless, different states have enacted different laws. For instance, it is permitted to smoke marijuana in Odisha, but Assam and Maharashtra have even outlawed the usage of bhang, which is made from the leaves of the cannabis plant and used in food and drink.” 

The growth of the cannabis industry 

Kaushik says that as more and more communities begin to recognize the benefits of cannabis, particularly in the medical field, the role of intellectual property law in the cannabis industry will grow.  

“Scientific research has shown that the CBD in cannabis reduces tension and anxiety in people, and as a result, it is employed in many mental health facilities throughout the world,” he says. “Increased demand will inevitably result in more competition in this field, making intellectual property necessary to safeguard the rights and interests of cannabis businesses. This is crucial in the context of India since governments like Uttarakhand have legalized commercial hemp planting, and other hilly states are also exploring doing the same to increase state revenue.” 





Excel V. Dyquiangco

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