As the pot industry grows up, protecting intellectual property becomes critical.
The tech companies of Silicon Valley know that when they develop new products, patent protection will insure exclusive revenues for many years. But with the growing legalization movement, the marijuana industry is struggling with little experience in patenting products and an unclear legal landscape.
Currently just four states allow recreational use of cannabis by adults, with 23 others plus the District of Columbia allowing medicinal uses, according to the San Francisco Chronicle. Legalization is expected to be on California’s ballot in 2016, which if passed would open a huge market for the product.
Some in the industry fear that an explosive California market would change the industry from a sector made up of small growers and independent dispensaries to an industry dominated by major pharmaceutical and agribusiness interests.
Just last month, California adopted rules that for the first time allow medical marijuana companies to take on investors, and already many are interested, especially from the tech industry. But tech investors are savvy about the importance of securing a company’s intellectual property through patent and trademark protection. This notion is new to many pot growers and pharmacies, who have until lately been operating in the underground economy.
That’s now changing rapidly. This year California has seen a 50 percent increase in patent applications related to cannabis, though the total number of applications is still just around 100. Industry experts say that patent and trademark applications are also increasing at the federal level.
A challenge to patenting is the open-source nature of the pot business, and the lack of industry standards. There are even few rules for naming varieties, with growers changing or appropriating names of products that seem to sell best.
Still, some companies are forging ahead with patent and trademark applications. One company uses a $1 million gene sequencer and is trying to define a genetic map of all pot strains on the market, in order to identify and patent the most successful ones. Other companies are applying for trademarks for their logos, or for patent protection on equipment used to extract cannabis from pot plants.