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The constantly evolving legal landscape and regulatory challenges facing cannabis and hemp cultivators, manufacturers, and retailers require close attention to compliance with local, state, and federal regulatory bodies.
As these industries mature and converge, operators should be equally vigilant about avoiding infringement of intellectual property rights held by others. To minimize the risk that investments in a new product or brand run afoul of protected IP rights, cannabis and hemp businesses are well advised to undertake a freedom-to-operate (FTO) analysis. An FTO analysis helps preemptively defend against possible assertions of infringement, minimize litigation risk, and provide comfort to investors regarding the marketability of goods and services.
Each stage of developing and bringing a product or brand to market presents significant risks of infringing another's intellectual property. These risks include patents directed to methods of processing cannabis and hemp into finished products, as well as the marketing and presentation of products through distinctive trademarks and trade dress. This is especially important considering that many cannabis strain names and brands reference popular music or musicians—such as "Garcia Hand Picked," "Fat Axl," "Deep Purple" and "Willies Wonder"—or other well-known brands and trademarks.
In the cannabis and hemp industries, intellectual property rights may protect particular plant strains, methods by which plants are harvested and processed into consumer products, desired physical and chemical properties of processed materials (such as terpene and moisture content), methods of achieving those properties, and the branding and presentation of products to identify the underlying business as the source of goods-building consumer appeal and goodwill.
Violating the intellectual property rights of others can torpedo the substantial investment required to bring a product to market. An infringement claim can bring an operator's business or new product to a halt and result in costly litigation, undermining the foundation on which an operator has built its business. In one recent example, Spotify successfully opposed registration of "POTIFY" on grounds of dilution of the "SPOTIFY" mark.
FTO analysis is an essential component of the product development cycle in mature industries, and it should be standard practice in the cannabis and hemp sectors as well. An FTO analysis conducted by experienced intellectual property counsel helps ensure that your hard work will not be undermined by the later assertion of third-party IP rights when your product reaches the market.
To learn more about freedom-to-operate issues impacting cannabis and hemp companies, join Duane Morris IP attorneys at our upcoming March 31 webinar focused on FTO issues for the food and beverage sector. The program will provide an overview of practical strategies for navigating FTO in this rapidly evolving landscape. Register and learn more here: https://www.duanemorris.com/events/consumer_branded_products_webinar_series.html
Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.
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