A Chicago-based intellectual property firm launched a practice group dedicated to cannabis businesses, entering a rapidly growing marketplace.
McDonnell Boehnen Hulbert & Berghoff LLP partners George “Trey” T. Lyons III and Nicole E. Grimm, the new practice group’s co-chairs, have worked on intellectual property matters for cannabis companies for almost four years, attempting to dispel rampant misinformation in the field. But the firm did not move to make the practice an official specialty area until this week.
“The firm is thrilled to launch this practice group to support the emerging cannabis industry,” MBHB Managing Partner Gavin O’Keefe said in a statement. “Our lawyers’ unique combination of legal and scientific credentials will be especially beneficial in this space, and we are eager to help the industry as it matures.”
Illinois legalized recreational marijuana use for adults in January. Now 14 U.S. states and territories allow recreational use, and an additional 23 permit it for medicinal use. Fifteen other states and territories allow for medical use of marijuana- or hemp-derived CBD oil that has low THC content. As the professional market for marijuana continues to expand, a number of legal issues have arisen, particularly since marijuana remains illegal under federal law. MBHB’s lawyers said they hope to be a frontrunner in the market’s intellectual property field.
“A lot of cannabis businesses were dealing with more basic problems, like finding locations and meeting regulatory standards when things started out,” Lyons said. “They had bigger problems to worry about, so they hadn’t really turned an eye to intellectual property. That’s starting to change now.”
“Cannabis clients have a lot of legal issues to navigate, so they have a whole gamut of attorneys they work with,” Grimm said. “Our focus is just going to be on intellectual property, which aligns with what our firm does already with other clients.”
Grimm said the primary service the group will provide for clients is procuring patents on their cannabis and hemp innovations.
Since cannabis is still an illegal substance at the federal level, businesses cannot obtain federally protected trademarks on products related to its sale. However, the same products are not excluded from patent and copyright laws.
“It’s a bit of a technicality,” explained Lyons. “A patent gives you the right to exclude others from making something, even if using it is illegal. It doesn’t mean you necessarily have the right to use it, just that other people can’t make it, whereas a trademark is protecting things like logos used to identify your products to consumers in the marketplace.”
Patents in the cannabis industry can be obtained on things ranging from technological devices for plant cultivation, packaging designs, recipes and formulations for edibles and therapeutics, and even strains of the plants themselves.
“Plant patents are very limited because they only apply to the one specific strain, but you can get them,” Grimm noted.
Although the cannabis practice group is going to be based in Chicago, the firm plans on serving clients nationwide as most cases appear in federal court or before the U.S. Patent and Trademark Office’s Patent Trial and Appeal Board.
While the most visible piece of the market is dispensary companies, Grimm and Trey said their client base is comprised of multiple industry sectors including dispensaries, growers and manufacturers.
“It’s quite a mix of small and big businesses and even individual inventors. We’re here for anyone in the industry,” Lyons said. “There’s no one single answer for how to protect all the things they do on the market, so what we do is we look at the company, where they are now and where they want to be in five or ten years, and we create a multifaceted, holistic plan for what they can do to get where they want to go.”
Lyons and Grimm said they became interested in the idea of cannabis IP law after observing how misunderstood the field was.
“We were talking with another colleague, and we realized we all had an interest in the subject and identified the need for more education in the field,” Grimm said. “The biggest thing we noticed is how quickly the industry was growing and that no other firms were handling it.”
Grimm, who has also worked with biopharmaceutical clients, and Lyons, who has practiced in technology, are writing and publishing information about cannabis IP issues to help clarify the questions that still surround the developing market.
“The field is getting much more sophisticated,” Lyons said. “Everybody benefits from having better information available.”
“We’re very excited to see where this industry is going,” he added. “It’s experiencing a meteoric rise, and we’re excited to be a part of it.”