Cannabis Litigation, Part 2: How to Avoid IP Disputes by Changing Your Oil Filter
The first step to protect your IP is to know that you have it
In a 1970s TV commercial, the Fram oil filter pitchman observed that it is cheaper to change your filter than to rebuild your engine: “You can pay me a little now. Or you can pay him (expensive engine rebuilder) a lot later!” This auto maintenance rule also applies to your cannabis business in the area of intellectual property (IP) litigation. Today’s post is on avoiding expensive IP litigation later by doing preventative maintenance on your IP now.
The first step to protect your IP is to know that you have it. You may not realize it, but almost every cannabis business has one or more of these kinds of IP assets: trademarks, copyrights, trade secrets, or patents. Even if you’ve never registered your IP, you almost certainly have some combination of the first three IP types, which don’t require registration. But just like your oil filter, you can’t maintain it if you don’t know it is there.
Once you know what you have, the next step is to protect it. Each type of IP is protected differently. Here is an overview that will fit in your glove compartment:
- Trademarks: Trademarks protect brand names, e.g., “FlyBoy Cannabis,” that signify you as the source of the goods and services you offer. Although trademark rights are established by use of the trademark, not registration, you should still register your trademark with state trademark office(s), and the federal trademark office in some cases. Once you’ve registered your trademark, you should tell the world this is your trademark. Using ® is a good first step, but you should also establish a trademark use policy so that your customers consistently link you with your products. Registering your mark makes it easier to protect your brand in court, and will give notice to infringers that your brand belongs to you.
- Copyrights: Copyrights protect the expression of a creative idea in a tangible form, not the idea itself. Your copyright applies as soon as your creation goes from your mind into a tangible form, such as writing an article on your computer or creating a CAD drawing of your design. You should take steps, including using the ©, to identify your work as yours. You should also register with the U.S. Copyright office (don’t bother sending your content to yourself in certified mail). As with trademarks, copyright registration gives you increased protection over your rights. Being able to threaten a lawsuit can be a powerful incentive to convince an infringer to stop instead of litigate.
- Trade secrets: Trade secrets are commercial information, including technical and business information, which give you a competitive edge because they are not publicly known. For example, your confidential process for extraction could be a trade secret, so long as it cannot easily be “reverse engineered.” The most important step to protect trade secrets is to keep them secret. However, you will likely need to share trade secrets with your own employees, and also with others outside your organization with whom you do business. Thus, nondisclosure agreements are one important feature of a trade secret policy. Depending on your business, you may need to take other steps as well. By the way, you can’t “register” a trade secret.
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