Can You Patent a Pot Plant?

Marijuana PlantAccording to the Huffington Post, legal marijuana is now the fastest-growing industry in the US. If present trends continue and pot becomes legal in all 50 states, marijuana cultivation and retailing could become bigger than the organic food industry.

Four states – Alaska, Colorado, Oregon, and Washington – have legalized retail sales of marijuana so far. Medical marijuana is legal in 23 states.

The ArcView Group, a cannabis industry investment and research firm, reported that that legal cannabis market grew 74% in 2014 – from $1.5 billion to $2.7 billion. 34% growth is projected for 2015.

However, marijuana is still illegal at the federal level, and that creates a variety of problems for people in the industry.

Cash Flow

One problem is what to do with all the money.

As the New York Times reports, banking regulators just denied the application of a Denver credit union seeking to serve the Colorado marijuana industry.

As the Times noted,

Although recreational marijuana has been legalized in Colorado, it is still illegal on the federal level, discouraging most traditional banks from working with pot businesses….

Nearly all banks have refused to open accounts for the hundreds of marijuana businesses in Colorado and other states with similar laws, leaving the businesses to operate in an all-cash economy with the significant dangers that can bring. Many small-business owners in the state have had to improvise with safes, armored cars and other alternatives to banking.

Trademarks

Intellectual property protection is another challenging area for legal pot marketers.

As cannabis-industry attorney Hillary Bricken points out in Above the Law,

Like all good businesspeople, those in the cannabis industry are interested in both boosting their brands and in protecting their trademarks. There is, however, one big impediment to these things: federal registration for trademarks on marijuana goods is generally not possible. This means state trademark registration is usually the only option for most cannabis trademarks.

Federal trademarks are off-limits because the federal Lanham Act bars trademark registrations for “immoral, deceptive, or scandalous matter” – which includes drugs illegal under federal law.

Plant Patents

The US Patent Office has long granted patents for plants:

A plant patent is granted by the Government to an inventor… who has invented or discovered and asexually reproduced a distinct and new variety of plant, other than a tuber propagated plant or a plant found in an uncultivated state. The grant, which lasts for 20 years from the date of filing the application, protects the inventor's right to exclude others from asexually reproducing, selling, or using the plant so reproduced. 

As I wrote about here, one such plant patent case involved genetically engineered soybeans:

The Federal Circuit has upheld a finding of patent infringement against a farmer who planted “next generation” Roundup Ready® soybean seeds derived from commodity seed he purchased from a grain elevator.

Bricken points out that patent law isn’t governed by the same morality standards as trademark law, and that a number of marijuana patent applications are already being processed.

Some startup marijuana companies are already getting letters from companies claiming to own marijuana patents and demanding licensing fees from “infringing” growers and sellers. However, Bricken notes that these claims may not stand up in court.

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