In keeping with an election promise made last fall, the Trudeau government has announced plans to legalize recreational marijuana use in Canada by the spring of 2017. Among other legal and regulatory challenges, these plans beg the question of whether the Canadian Intellectual Property Office (CIPO) can expect a rush of applications for intellectual property protection related to marijuana and its uses.

On 4 August 2015, the United States Patent and Trademark Office (USPTO) granted a utility patent for a plant containing significant levels of THC (the principal psychoactive component of marijuana) – US patent no. 9,095,554, entitled “Breeding, Production, Processing and Use of Specialty Cannabis”. While US patents have previously been granted for methods of using the Cannabis plant for medicinal purposes (e.g. US patent nos. 9,149,499 and 8,337,908,this marks the first time that a patent has been granted for the marijuana plant itself. Some had previously speculated that the USPTO would potentially not grant such patents on the basis of the illegality of the substance in the US.

While legalization of recreational marijuana in Canada may stimulate a pursuit of intellectual property rights for cannabis, differences between Canadian intellectual property laws as compared to those in the US, particularly in the patent realm, are important to note. However, careful attention to these issues can still result in commercially useful protection being obtained in Canada. Applicants may also wish to consider forms of intellectual property protection beyond patent protection, including plant breeders’ rights (PBR), trademark, and trade secret protection.

Currently in Canada, there are an estimated 2.3 million users of marijuana, with 35,000-40,000 of those being medicinal users. While the market for medicinal marijuana use is currently valued in the range of $80-$100 million, it is estimated that the legalization of recreational use could increase the size of the market for marijuana to approximately $5 billion. With such a drastic increase in market size, the lure of obtaining exclusive rights to various strains of cannabis could certainly tempt Canadian and foreign breeders to rush to secure intellectual property rights. However, they would be well advised to pay close attention to the unique legal requirements for protecting such subject matter in Canada.

Patents

In Canada, judicial interpretation of what constitutes an “invention” under section 2 [1] of the Patent Act (RSC 1985, c P-4) has imposed potential hurdles on the ability of applicants to obtain patent protection for different strains of marijuana and medical uses thereof. However, with careful patent drafting, protection can be secured for developments in this field, such as genetically modified marijuana plants, and/or the use of specific strains of marijuana for medical purposes.

Higher Life Forms

A primary hurdle to be aware of in Canadian patent law is that Canada does not generally permit the patenting of higher life forms, including plants (Harvard College v Canada (Commissioner of Patents), 2002 SCC 76). The Supreme Court of Canada (SCC) in Harvard held that a higher life form meets none of the descriptions of “invention” under section 2, and in particular was not a “composition of matter”, and is thus not a patentable invention under the Act. Note that lower life forms, such as fungi or bacteria, may qualify as patentable inventions.

In the US, there is no equivalent prohibition on the patenting of higher life forms, and thus patent protection can be granted for genetically modified higher life forms, provided that the requirements for patentability are met. To be patentable, an invention must be novel [2], non-obvious [3], and useful [4]. Patent protection typically is only available for inventions where there has been a sufficient degree of human intervention, such that patents are generally not available for plants produced by traditional breeding techniques. However, new plant varieties produced by traditional breeding techniques can potentially be protected by plant patents, which are specifically provided for within US patent legislation (35 USC §161), as discussed further below.

Notwithstanding the inability to patent higher life forms per se in Canada, it is possible to claim genetic modifications made through human intervention (i.e. as opposed to traditional selective breeding techniques), and cells containing such genetic modifications. A person propagating a plant containing that genetic modification would infringe such a claim. This was the case, for example, in Monsanto Canada Inc v Schmeiser, 2004 SCC 34, in which a farmer selectively saved and reproduced canola seed containing Monsanto’s patented modification conferring resistance to the herbicide Roundup™ on the plant. The farmer was found to have infringed Monsanto’s patent by reproducing the seeds. Following a similar line of reasoning, although it may not be possible to patent a marijuana plant that has been genetically modified per se, patent protection on the genetic modification itself, and marijuana plant cells containing that genetic modification, can effectively be used to achieve a similar scope of patent protection in Canada.

Methods of Medical Treatment

The SCC held in 1974 that obtaining a patent for a method of medical treatment is impermissible Tennessee Eastman Co. v Canada (Commissioner of Patents), [1974] SCR 111. According to the SCC, such methods that may interfere with the dissemination of helpful medical knowledge to the public are not “processes” under the section 2 definition of “invention”, and so are not patentable.

However, the use of a substance for a medicinal purpose can be claimed as an invention in Canada, so long as the claims do not instruct a medical practitioner how the substance should be administered. Accordingly, with careful drafting, new medical uses of existing marijuana strains, or newly developed strains, can likely be protected by patents in Canada.

In addition to the possibility of protecting specific genetic modifications and specific medicinal uses of marijuana that are novel and inventive through the patent system, there are also other options for protecting intellectual property relating to new strains of marijuana.

Plant Breeders’ Rights

An alternative option to patent protection is the PBR regime under the Plant Breeders’ Rights Act (SC 1990, c 20). Below is a brief summary of the PBR regime. For a more extensive overview of this regime, see this guide from the Canadian Food Inspection Agency.

PBR are a form of intellectual property that allows a plant breeder to protect new varieties of their plants. In this way PBR are similar to a patent, but the two forms of IP are governed by distinct and separate systems. PBR applications are examined by the Plant Breeders’ Rights Office (PBRO), similar to the way that a patent application is examined by the CIPO. However, the requirements for obtaining PBR are different from those required to obtain a patent. To be eligible for PBR, a plant variety must be new, distinct, uniform, and stable.

It should be noted that PBR can be used to protect plant varieties that are created through traditional cross-breeding, while patent protection is typically not available for such varieties. Thus, for many strains of marijuana produced by selective breeding processes, PBR may be the appropriate form of protection that should be sought for the new strain.

Requirements and Rights

All plant species are eligible for protection using PBR, excluding fungi, algae, and bacteria. In order to be considered “new”, a plant variety must not have been sold by the breeder in Canada more than one year before the PBR application is filed, or sold by the breeder outside of Canada more than six years before the PBR application is filed for a tree or vine (including their rootstocks), or four years before the PBR application is filed for any other category of plant. To be “distinct”, a variety must be measurably different from all varieties of a particular plant that are known to exist at the time the PBR application is filed. An applied-for variety must also be sufficiently “uniform” in its relevant characteristics. This means that any variations in these characteristics must be predictable; the breeder must be able to describe the variations and they must be commercially acceptable. Finally, the essential characteristics of the variety must be “stable”; that is, relatively constant over successive generations.

Once the PBRO examines the variety to confirm that it meets these requirements and grants a certificate for it, the holder of the certificate has the exclusive rights, amongst others, to produce and sell propagating material of the protected variety in Canada, to make repeated use of the protected variety as a step to commercially produce other varieties, to use the protected variety in the production of ornamental plants and cut flowers, and to authorize a third party to exercise one of these rights. The duration of the rights is 25 years from issuance of the certificate for new varieties of trees and vines, and 20 years from issuance of the certificate for all other varieties.

An important point to note is that an applicant for PBR must also select a name for the new variety, referred to as a “denomination”. The denomination cannot be registered in Canada as a trademark, and the Trade-marks Act, RSC 1985, c T-13, prohibits registration of a trademark resembling the denomination, so that the name of the denomination will be free for others to use to describe that variety after the PBR have expired.

The US provides for protection of asexually reproduced plants excluding tuber reproduced plants via plant patents. The grant of a plant patent prevents others from asexually reproducing or selling or using the patented plant variety for a period of 20 years from the filing date of the application. US legislation also provides protection for sexually reproduced plants and tuber reproduced plants via the Plant Variety Protection Act (7 USC §57). This statute grants protection for sexually produced plants which are new, distinct, uniform, and stable, and is relatively similar in nature to Canada’s PBR regime. Both pieces of legislation derive from the International Convention for the Protection of New Varieties of Plants (UPOV).

Potential Limitations

Could Canada’s PBR regime be used to protect strains of marijuana? There are several points to note. First, the requirement that a plant variety must be new may restrict breeders’ ability to protect strains of marijuana that have been sold for medicinal purposes in dispensaries. Such strains would not be considered “new” (assuming they are sold in Canada more than one year before the PBR application is filed), and therefore would not be eligible for protection.

The second, and perhaps more obvious, consideration is whether marijuana is eligible to be protected under the PBR regime at all. In short, the answer appears to be “yes”. There are no express prohibitions against protecting marijuana under the PBR regime. Also, as seen in the PBRO database, PBR protection has been sought for one strain of Cannabis sativa subsp. Indica (i.e. marijuana). There are also several PBR registrations for hemp.

Finally, the PBRO requires field trials to be conducted in Canada as part of the application process. This is relevant to the PBR protection of marijuana where a foreign breeder wishes to gain such protection in Canada. The foreign breeder must send seeds to Canada to conduct field trials. The problem? Cannabis sativa is a controlled substance, and a license to legally import marijuana seeds must first be obtained from Health Canada before seeds can be sent to the PBRO. The Canadian Food Inspection Agency also imposes additional requirements on the importation of Cannabis sativa due to its potential to be a carrier of certain kinds of bacteria and fungi. However, importation appears to be possible so long as all requirements are met.

Trademarks

There is also considerable interest in obtaining trademark protection, for example to protect the names of new strains as they are being developed where PBR are not sought, or to provide a brand identity for competing companies in this newly emerging market. Even if breeders choose not to go to the trouble and expense of securing patent and/or PBR protection for their new strains, protecting the name of the strain as a trademark in relevant jurisdictions can help to protect the market value of that strain by preventing others from using confusingly similar names. Trademark protection is also available for existing strains of marijuana since there is no requirement that the strain be “new”. Securing official trademark protection is also an important consideration to protect established but not publicly known brands in this space as it transitions into a legal marketplace.

Because marijuana is not legal in all jurisdictions, trademarks for use in association with marijuana cannot necessarily be registered in all countries. Such trademarks are registrable in Canada, but may not be registrable in other countries. For example, in the US (at least federally), the USPTO will require confirmation that the goods and services covered by the application comply with the Controlled Substances Act (which prohibits manufacturing, distributing, dispensing or possessing controlled substances including marijuana) before it will allow an application. Thus it is important to obtain specific legal advice regarding each country of interest if protection of trademarks is to be sought abroad.

Trade Secrets

Another intellectual property protection option is to keep the marijuana strain a trade secret. For this, the marijuana seeds and propagating material would need to be kept confidential, as well as any special growing conditions that may contribute to a plant’s desirable properties. Measures should be put in place to maintain confidentiality, such as ensuring that all persons with access to the seeds and/or growing conditions are bound by confidentiality agreements and marking materials such as packages containing the seeds and instruction manuals “confidential”. It may also be necessary to sell only non-propagating (e.g. dried) forms of the plants, as a person who comes into possession of propagating material by legitimate means would be free to reproduce that plant.

While a benefit of trade secret protection is the possibility of an indefinite term of protection, the downside is that protection is lost once secrecy is lost (which could include, for example, escape of propagating plant material beyond the control of the trade secret owner). Trade secret protection is not possible of course unless one decides to forgo the option of patenting and obtaining PBR in any jurisdiction, since filing an application will result in disclosure through publication of the patent or PBR application.

Other Considerations

Apart from protecting actual varieties of marijuana or their uses, some parties might consider obtaining patent, design, or trade dress protection for ancillary goods (e.g. bongs, pipes, vapourizers, etc.) or processes (e.g. for extracting THC from plants). As things currently stand, this protection would potentially be easier to obtain than protection for marijuana itself, and may offer some consolation to breeders or other parties who are not presently able to protect their existing varieties by patent or PBR. Once marijuana is legalized, the value of these ancillary interests will undoubtedly increase.

Conclusion

The grant of US patent No. 9,095,554 by the USPTO is likely to spark significant interest in patenting marijuana-related inventions in that country, given that it was previously speculated that the US would not grant patents for marijuana per se. The impending legalization of marijuana for recreational use in Canada will likewise no doubt spark interest in protecting intellectual property relating to marijuana in Canada. While trademarks covering marijuana are likely not registrable at the federal level in the US, such trademarks are registrable in Canada.

Companies planning to enter this emerging and undoubtedly competitive marketplace should take steps now to evaluate what intellectual property they have that may be protectable, and consider filing appropriate applications to secure protection for potentially valuable intellectual property.

 

By Tyler C. Berg, David H. Takagawa and Jennifer A. Marles

 

Endnotes

[1] Section 2 reads: “invention” means any new and useful art, process, machine, manufacture or composition of matter, or any new and useful improvement in any art, process, machine, manufacture or composition of matter.

[2] A “novel” or “new” invention is one that is not anticipated or fully disclosed by a single prior art reference (e.g. another patent or a scientific paper, or prior device available or sold to the public).

[3] A “non-obvious” invention is one that comprises an “inventive step” over the prior art. The question is whether a person skilled in the art would be able to arrive at the invention without difficulty based on the prior art. If not, the invention is non-obvious.

[4] To be useful, an invention must have “utility”, the test for which is “whether the invention did what was promised” (see 2012 SCC 60).