In the field of medicinal cannabis, plant varietal or cultivar names that are protected by a registered right such as a PBR (plant breeder right) are often mirrored in commercial trade names of products derived from such plants. However, for the reasons we explore below, this can adversely affect a business’ long-term commercial strategy.
Trade marks and cannabis – why now?
The junction between trade marks and plant varietal names for cannabis has recently come into focus thanks to the easing in many jurisdictions of criminal restrictions on the possession, use and supply of cannabis products.
Australian law does not allow the registration of trade marks that are “scandalous” or the use of which would be “contrary to law”. Prior to amendments in 2016 to the Narcotic Drugs Act 1967, this would have been a barrier to the registration of trade marks associated with cannabis and cannabis-related goods and services. However, as the production of cannabis and cannabis resin for medical and scientific purposes is no longer “contrary to law”, this has opened the door for the registration of trade marks in this space in Australia, and many other jurisdictions where similar transitions have occurred.
The difference between varietal names and trade marks
In Australia, plant breeders can protect new varieties of plants by way of a registered PBR. During the application process, the breeder will be required to assign a name to the varietal (and optionally provide a synonym for the varietal). A registered PBR lasts for 20 years in Australia. For more information on PBRs and medicinal cannabis, read Part 4 of this series.
A key restriction on the naming of varietals for PBR purposes is that the varietal name cannot be, or include, a registered or pending trade mark for any goods related to live plants, plant cells and plant tissues.
While a PBR confers various exclusive rights to produce and commercialise the relevant plant variety material, it does not provide any exclusive right over the name. That is, a purchaser or licensee of such plant variety material will be entitled to use the varietal name to market the material, or products derived from it, themselves. Indeed they are likely to need to do so, in order to properly describe such material.
A trade mark, on the hand, is a ‘sign’ (most commonly a name and/or logo) that distinguishes the goods and services of one trader from those of another. Trade marks can be registered or unregistered. Registered trade marks are initially granted a 10 year term, but can be renewed in perpetuity for 10 years at a time, provided the trade mark is still being used.
In order to obtain registration, trade marks must be deemed by IP Australia capable of distinguishing the goods or services of one trader from another. This precludes the registration as trade marks of words which are descriptive of the goods or services to which they are applied. As a result, the name of a plant that is listed a varietal name (or synonym) on the PPBR register cannot be registered as a trade mark.
Both PBRs and registered trade marks create commercialisation opportunities and can be used in tandem. For example, rights to the varietal could be licensed to a third party, while a trade mark can generate a customer following for a specific product derived from the varietal. A sophisticated commercialisation strategy will integrate all available forms of IP to ensure the maximum return on investment.
Future proofing your brand management strategy for medicinal cannabis
With market players rapidly developing new and useful cannabis strains and expanding their medicinal product offerings, it is important to ensure from the outset that approaches to PBR and trade mark protection are aligned.
Consider the following (not uncommon) scenario: a company develops a new medicinal cannabis strain that it wants to protect via a PBR. When applying for the PBR, it provides a varietal name and a synonym, which are placed on the PBR listing. The new varietal proves to be very useful and the company develops a product line from the new plant, adopting the varietal name of the PBR listing as a brand for the product line. As the product line becomes a commercial success and the product brand becomes strongly associated with the company and attracts goodwill, the company smartly seeks to protect the brand name with a trade mark registration.
Unfortunately, the trade mark application would almost certainly be rejected as being descriptive thanks to the PBR listing.
While the company could continue to use the varietal name to refer to its products, it would not be able to prevent other traders selling products derived from the same variety from using the same varietal name in respect of those products, for example where the company on-sells material from the varietal to other traders. Where such third party traders are required to identify the origins of the material by way of the varietal name, this can create confusion between the company’s products and those of the other traders. Thus, the market value associated with the brand name is severely diluted, and may even be threatened by undesirable characteristics of the products of the third party traders, which the consumer believes originate from, or are associated with, the original company.
Moreover, once the 20 year monopoly granted by the PBR has expired, and provided the product is not protected by other IP, other traders would be free to market products which contain the varietal without any licence from the original company, and to refer to their products by the varietal name, allowing other traders to benefit from the goodwill generated in the company’s brand.
The Solution?
Developing different names for a varietal (and its synonym) and your brand name. One option is to use alpha-numeric denominations or appropriate scientific terminology to name plant varietals in PBR applications, while creating a distinct, original brand name for the products derived from, or related to, such varietal. This is not a barrier to also using the varietal name in your marketing material, and indeed that is preferable in order to clearly differentiate the trade mark. But this allows for a branding strategy that is not encumbered, and can outlive, the 20 year term of a PBR.
It is also important to consider the reverse situation where a distinctive trade mark adopted by a PBR owner becomes known and used as a generic name for products derived from their varietal. In that circumstance, the trade mark owner can lose their exclusive rights in respect of the trade mark, allowing anyone to use it. To avoid this scenario, care should be taken to ensure that the trade mark is always clearly identified as such, and that any unauthorised third party use is appropriately policed.
As always, appropriate searching of the trade mark register, the market place and the PBR register is also essential before committing to any branding strategy.
Pearce IP’s branding and trade marks team has broad experience in all aspects of trade mark strategy, protection and enforcement and works closely with clients in the medicinal cannabis industry.