Jonathan Purow, Shareholder at Gottlieb, Rackman and Reisman P.C.
Jonathan is a shareholder in a boutique 18-attorney law firm that exclusively practices intellectual property law. Jonathan focuses on trademark, copyright and trade secret litigation and transactional work. He works with clients to register their intellectual property rights domestically and internationally, and license these rights when fruitful for his clients. He enforces and defends copyright, trademark and trade dress infringement and other claims, either via online enforcement, cease and desist letters or, if it cannot be avoided, litigation.
Jonathan has a particular interest in intellectual property law in the field of cannabis, as its status as a federally illegal drug causes some IP issues.
EPISODE TRANSCRIPT
[00:00:01] You're listening to Thinking Outside the Bud where we speak with entrepreneurs investors thought leaders researchers advocates and policymakers who are finding new and exciting ways for cannabis to positively impact business society and culture. And now here is your host Business Coach Bruce Eckfeldt.
[00:00:30] Welcome everyone this is thinking outside the bite. I'm respectful. I'm your host and our guest today is Jon Purow and he is a shareholder at Gottlieb Rockman reason. And we're going to talk a little bit about the IP about intellectual property about how the law works when it comes to the field of cannabis.
[00:00:48] And he's with a boutique firm in New York that focuses exclusively on intellectual property. And we're going to talk about how intellectual property works in this cannabis field particularly because of all the kind of legality complexity both federally and state.
[00:01:02] So I'm looking forward to this is going to be a good conversation section something I don't know a whole lot of so I'm looking looking forward to learning and kind of expanding my knowledge on that. So John welcome to the program.
[00:01:13] Thank you so much for having me. And welcome to all friends of the pod to borrow a term from another podcast that I'd like you to listen to. I look forward to your education Bruce. I make this as fun as possible.
[00:01:23] I have no doubt it will be fun on the podcast. We've talked a little bit with some folks about the legality issue as we talked about it when it comes to big game. We've talked about interstate transport and all that kind of the machinations of the state legislation versus federal legislation. So I think we have a general idea of this but help us frame this up a little bit when it comes to the question of IP and educate us a little bit about IP law works and then why this gets complicated from the cannabis field and then we can talk really about how it's kind of impacting folks and what does it mean for the business people that are in the space. Once we kind of understand a little bit of the framework for IP law and cannabis.
[00:02:00] Got it so exactly like you said you hit the nail on the head right in this field just like any other the federal illegality creates certain wrinkles that mean that we have to be a little bit more strategic. The main thing that you cannot do right. And let's talk about you know the different types of IP right trademarks. Think about it as your brand. Anything that indicates source with respect to a certain type of good or service is a trademark. Right. So you know typically we think about a brand name. We think about a product name. But there are more unconventional types of trademarks out there. For example I think U.P.S. owns a federal trademark registration for the color brown in relation to shipping and services like that. Right. Their trademark only extends to that type of shipping service. It doesn't mean that when you go.
[00:02:45] Number two you're committing infringement of their registration. So a royalty to defecate.
[00:02:52] Yes. So the I told you we'd make it this again. So the main thing that the federal illegality prevents you from doing which everyone would love to do in the cannabis field is to register a trademark in the name of a strain. Everyone would love to become the Marlboro of cannabis. Right. And have that recognizable brand. Unfortunately that's what you really can't do right now.
[00:03:15] That's because trademarks are issued by the federal government.
[00:03:17] Exactly. And you know what happens you know to a lot of people who've tried it and tried to do it creatively as you file a trademark application for your wonderful strange name say Puro Pop. All right. I went for that I would get a refusal from the Patent and Trademark Office on the basis that it is illegal under the Controlled Substances Act. And you know and so you would not be permitted to proceed to registration. Now people tried to start getting clever and you know the basic summary is if it's a plant touching goods or service you know if it's cannabis itself or anything else that's plant touching you're not getting that application through to registration right now. There had been a little bit more interesting wrinkles in relation to CBD but planned touching you're not going to get a registration. And so people have gotten creative and they've come up with you know non plant touching you're kind of ancillary goods or services like smoking products. You could try and get a federal trademark registration and using this idea of kind of expanding your goods and services a bit beyond the scope of the registration you could kind of enforce if people are trademarking that people are infringing on the name of your strength. But right now I mean the main thing you could do and this is important because you also can't you know sell cannabis across state lines is you go for state trademark registrations in relation to the if you want to trademark the name of the strain you go for state trademark registration in any state in which you're selling. So yeah this is. I know we have multiple clients in the space but you know obviously besides you know strict on personal feelings as to why that should be legal nationwide you know trademark perspective you know there's always strategy involved in you know advising clients what makes the most sense for them. But there's even more strategy in the cannabis industry because of the wrinkle specific to it and where it's a win win win.
[00:05:09] You uncrossed the line like what you talked about. People can kind of expand out or people figure out these these sort of creative or silly expanded versions of how they do it to actually get these at some level of protection like whereas that Leonard you have a good example of someone who's been able to kind of make this work at some level for federally.
[00:05:27] Here's the question right. People being to get their registration for their now unplanned touching products say no smoking products and accessories pipes or anything. Has anyone turned around and gone to a dispute where they've used that registration on the federal level to enforce against someone infringing on the name with their strain of cannabis on a state level. I can't really think of any examples. I mean the fascinating thing is you know over on the patent side we've had finally had our first patent litigation relating to cannabis. But I think there's limited things that we're seeing in terms of conflicts like that trademark side. One thing that I just wrote an article about that's interesting on the trademark side is there are a number of strains out there that infringe well-known business names. So a really good example was Gorilla Glue was a very popular strain of cannabis. That's when it was just a black market calling it Gorilla Glue. Laughter Look we're gonna go after like trying to track down to your dealer by Daria. Now that doesn't work. But you know whence it you know once it became legal in certain states they had a party to go after who is growing that I think in one specific state. And so we're starting to see you know you're not going to see all of the enforcement related to this because a lot of it's going to happen behind closed doors with cease and desist letters. But you've seen some major brand owners start going after you know the strain. So I mean we saw you know there's Air Jordan but yeah you've seen Gorilla Glue. Hershey's has been very proactive in terms of trying to tamp down on different strain names that are similar to their trademarks. And so what I would say is if you are operating dispensaries you know be careful that you might get a cease and desist letter because ultimately you're going to walk away from the strain that you're not going to win that you're going up against big brands most likely and the cost benefit is not really going to justify fighting back. Yeah yeah.
[00:07:16] So. So talk to us a little bit about that trademarks. What are the other things that come into this kind of intellectual property or protect all assets from a legal point of view.
[00:07:27] Ok. So I mean the the different boxes of IP are trademarks which are all we discuss briefly copyright protection. All right. So when you think copyright protection you're typically thinking of you know a piece of music you're thinking or a film but copyright can protect a lot of you know anything that has a certain amount of originality and creativity outside of like say three words. Right you're not going to be able to take a trademark name like Gorilla Glue and get a copyright on Gorilla Glue. No but if there's a logo associated Gorilla Glue that includes some artwork you could get a copyright protection and that possibly. And so you know let me just also say that you know copyright could protect all the content of a Web site. You know we felt for a lot of our clients that are in e-commerce you copyright your entire Web site infringers are lazy and they will rip off your photographs when they want to sell a similar product to you. So one interesting note in relation to the and cannabis and copyright is you know you can't. Some people are also experimenting with getting copyright protection for their logos if they're nice and distinctive potentially for their packaging. If there's really artwork on the outside of it. Yeah. So that's one application to this field that I think is it should be noted in relation to copyrights.
[00:08:40] If I tried to do that if I tried to copyright my packaging my creative design and my packaging and it's clearly Canada's or it's touching the plan that federal governments you know say no no you don't run into the same issues and can't real could they do a much more limited review.
[00:08:55] You're not saying what goods and services you're using in relation to really you know when they review a copyright application it's almost a rubber stamping process if they look out and say you know what. There's enough originality here. This isn't just two squares next to each other. Yeah right. They say look here's a logo. That's a really nice roster lion. Bob Marley's family I wouldn't really put some effort into drawing that. You get a copyright registration and then if someone comes up with a well that's too similar copyright infringement and copyright infringement is actually a really nice weapon because the Copyright Act has built into it you know a certain amount of damages that are pretty onerous. So whereas infringing a trademark you know most of the time you're looking it was know a good result is to get that person to stop infringing someone infringes the copyright registration you're potentially could get money out of it. They can have to pay damages. So next is patents and patents are actually very interesting in the cannabis world because you can. There are patents already that have been granted on different types of strains. There are patents regarding you know that are extremely valuable in terms of methods of extraction to convert cannabis flour into to oil. We've already seen our first cannabis patent litigation got launched to think about a month ago. And there's also something even more interesting is there's a patent troll lurking and there are white knights trying to fight that patent troll.
[00:10:24] Yes there is a company called Biotech Institute out in California that people are concerned as you become a patent troll and for those unfamiliar with the concept to give you now we're talking about parties that have you know have really saddled a patent law in the courts with a bunch of litigation effectively effectively I go out I register a patent and rather than actually trying to monetize that patent and by innovating or anything I am just going to take that pattern offensively as a weapon by suing people and effectively extorting settlements out of them or royalties out of them. And so there's a really very very cool GQ article I think of it year old at this point that I would recommend Friends of the pot check out which the GQ reporter you know found out that this Biotech Institute was you know applying for patents on all sorts of different strains among you know broad swaths of cannabis plants itself and was trying to figure out who was behind it. But the bottom line is this party is spending a lot of money to win a lot of patents and there is a large concern that these people are going to turn around and start trying to sue everyone in the industry and really cripple innovation and frankly it'll be completely unfair from the beginning because one of the concepts in patent law. And I'll give a disclaimer that I'm actually not a patent attorney but we have some wonderful attorneys at our firm who are very knowledgeable types that if you know the requirements to get a patent is has to be non obvious and there can't be prior art. You can't just take someone someone's already done and say I'm going to get a pat on it. That's you know that's reasons for invalidation that's effectively fraud. And what's happened is you know this party Biotech Institute is being super aggressive saying oh everything we're doing is innovative but someone saw it because apparently it's happened with the human genome that once you sequence the genome a bunch of people got patents that they shouldn't have gotten in different parts of the genome.
[00:12:17] And so white knight you know I think they're two groups recognize the potential for abuse in relation to cannabis and so they sequence the you know the cannabis genome and what they're going to try and do is if you know parties like Biotech Institute or other places and enforce these patents they're going to have evidence that these strains or whatever cut me a part of the genetic sequence so if cannabis it is that they're trying to we're trying to protect and enforce that they can say oh no sorry. That's fine out since 2007. You filed your application to 2015. Let's invalidate that. So it could end up being very very interesting.
[00:12:55] So interesting in fact that I was a non patent person I've been reading all about it learning about it and who funds the white knights I mean what's what's the what is their motivation was are there underpinnings.
[00:13:05] They're two different white knights. I'm not sure if one is a not for profit but I can tell you that with the high stakes you know the amount of investment in this industry the billions of dollars that if this part you know some of these potential patent trolls start getting going on the offensive I don't think that there would be. And the cost of fighting and invalidating a patent is very expensive and we're talking you know easily six figures. I don't think you'd have a problem with multiple parties getting together and ponying up to big years to ensure that they don't have to pay an ongoing royalty to some patent troll in perpetuity.
[00:13:41] Yeah. So it could be it could be into the enemy of my enemy is my friend.
[00:13:47] Yes. And then the last box that we call you know typically falls under IP or trade secrets guidance or the sample that I always love to give trade secrets or Colonel Sanders eleven you know blend of alert level Spice I used to be a lot more familiar with that until my wife wisely is cutting down on my fast food habit that doesn't prevent it however from whatever we're in the car and we drive by KFC for me going through the kernel. Keep on driving. So the Coca-Cola recipe is also an example. She's totally going into this.
[00:14:23] I might get in trouble. Exactly. Not my fault not my fault.
[00:14:28] She's got a great sense of humor her whole will laugh about this. I'm a lucky bet. Let me just say that on the right. Right. And so the idea behind a trade secret is you know it could potentially run in perpetuity if Coca-Cola has a patent as formula. Eventually that goes into the public domain. Yeah. Just as we see with generic drugs. But by protecting as a trade secret kind of like a little was it a Lord Of The Rings keep it secret keep it safe and you could prevent people from infringing that in perpetuity.
[00:14:57] Just clarify that for me because I think I get it because you have to fight. You have to demonstrate and show and illustrate what it is you're trying to patent. Yes a trade secret. You don't have to reveal the underpinnings to the whole.
[00:15:08] The whole purpose of it is that you do not. Yeah. And you consistent maintain it as a trade secret. So you need to have as part of your business as best practices. We're talking about whatever you hire anyone who's going to be exposed to whatever the secret is let's say it's a specific method of extracting you know a specific method of extracting you know super high THC content better than anyone else in the market right.
[00:15:32] Anyone is going to come in contact with that needs to sign an employment agreement.
[00:15:36] The non compete and a confidentiality clause and then any third party say that you need to develop some of the technology or to manufacture the product for you. They have to also be tied to it. Anytime you're printing anything relating to a confidential you know material if you don't maintain the secret properly you lose your claim and you could lose your secret. So it's very like I said practices need to be in place to maintain the secrets.
[00:16:03] So so those are kind of four boxes now.
[00:16:07] Some of these is some of these run amok with the federal legislation. Some of it doesn't.
[00:16:13] From a sort of practical business owner point of view how do I start deciding whether or not I need. Or I'm gonna start intersecting with some of these things.
[00:16:22] What what is it that I do either in terms of my business operations or business process or business transactions that are going to start touching these things and how do I start assessing my risk or at least figuring out where I need to be mindful when it comes to intellectual property law as early in the process.
[00:16:38] You hire an informed intellectual property attorney preferably a boyishly good. Oh wait wait sorry I forgot. We're only doing the audit. You know I'm being completely honest right in. You need to. The problem look. Besides people in the cannabis industry that I assist you know I'm helping startups in all different industries. And my main one of my main jobs I always say is as an educator and the earlier that you're dealing with an IP expert the less likely you are. I would say this right. Look when you're starting a business every dollar counts but when you're talking about intellectual property which could end up being some of your most important assets. Right. A dollar spent now could save you ten thousand dollars later and certainly at the point where you're looking to raise funds and get investors one of the first thing that any investor is going to do is say OK. Is your IP fine. Do you have your trademark registered. Oh you have kind of a patent specific business model. Did you file for your patents. Or did you start selling you know something that's supposed to be covered by a patent and then shoot yourself in the foot and you get patent protection anymore because you started selling more than a year ago. So I just think that you know get educated as quickly as possible by talking to an IP attorney I mean I talk to prospective clients all the time. Right. And I'm not you know they're not certainly going to become a client right then.
[00:18:00] I'm not charging them for the education and you know what happens a lot of time. You know I believe in karma if people go on to do great things and they sort of go back and go and have a client right. But speak to someone and people don't think of attorneys like they do of doctors right. I like to say no I'm going to fail. I'm the black sheep in a family full of doctors right. So what I hate. So whenever I my family reunions I'm getting a lot of flack for it and what inevitably happens is doctors. You know my family come to me and they say hey I need your help with this real estate issue. And I say that's awesome. You're a cardiologist right. Do people who come to you and ask you to look at something growing on their Gyn. Well it's the same thing. Right. So when you're considering intellectual property issues make sure that you are talking to someone who was an intellectual property attorney and all the better if they have experience in this industry because of the specific wrinkles because of the federal illegality affecting the ability to trademark cannabis strain. You know someone who's familiar with filing state trademark registrations that that if you're dealing in a plant touching business. So that's what I'd say as early as possible. Talk to an IP law in cannabis and all of the businesses.
[00:19:09] A couple of scenarios or situations that I've seen I'm kind of curious to understand the intellectual property angle to them. So these brands like Bob Marley and stuff is coming out with now cannabis brands and they're making cannabis products in there. They've got all these packaging and they're saying what are the dynamics for these folks. They've got a brand which is you know a brand out there in the world that is I'm assuming they've got protected in various ways. Now they're getting into this kind of stuff. What are the risks or what are the complexities that they face trying to bring these brands into the cannabis base and then do their problems are they protected because of the way they've set it up.
[00:19:40] All right. So we're talking about a specific example of like a Bob Marley brand that's a pre-existing brand who's now coming in and.
[00:19:48] Yeah. So I mean what we're seeing already is a lot of celebrities that have any association whatsoever with cannabis have their own lines. Right. So there is a Tommy Chong line there is the you know the Bob Marley line so let's take Bob Marley for an example and his family owns the rights. I actually just went to the Wailers concert a week ago which was fantastic. Know I was just singing every single word swaying. I spent my first 15 birthdays in Jamaica. I mean small wonder that I like reggae and you know arrested in certain industries but for Bob Marley right. They sell shirts they license his music and they decide to make them move into the cannabis industry. So you're not going to be able to get a trademark registration federally for Bob really I think it's called Mali natural brand.
[00:20:31] Yeah. Mali natural and the respect to cannabis. But they're going to. I'm pretty sure I just checked. They have probably trademark registrations for Mali natural in relation to smoking accessories. Then I would almost guarantee you that in the specific states where Mali natural cannabis is sold they have state registrations in each of those states.
[00:20:52] So they go right by state. Again you can say is this something people can do before I can then go on and do this in all 50 states right now. Even if it's not legal in the States.
[00:21:00] Bruce fantastic question. Right. You could do that on the federal level by what's called an intent to use trademark application but on the state level there are only very very specific states I think actually two that have any equivalent intent to use application. So I've actually you'll see that yes there are certain student parties who know what those specific states are right and will file an application say up to six months ahead when they're actually gonna start selling in the state just in case someone else would come along using similar name to cut them off and laid the groundwork for their protection because otherwise I can't I can only do it once I've got the product they've got actually actively sell.
[00:21:39] Yeah I guess that is speculative.
[00:21:41] I can't say oh I just want to lock this up so I'm going to file this on a state now a fantastic statement.
[00:21:47] Yeah fantastic question that I should have addressed right from the beginning but yes. Right. You need to have use in the different states and then it gets interesting in relation to specific states because some of them rely on the federal classification of goods. So you can't say there's no classification under the federal system for cannabis. Yes marijuana. So instead you're going to be saying things like smoking bowl plants or something something something along those lines or if it's an infused edible product then you just get the registration for that product in general you're not going to get it for barbecue sauce containing cannabis. You're gonna get your state trademark registration for barbecue sauce most likely.
[00:22:26] And so then what prevents a dispensary company in a local state from just trading and creating their own Bob Marley cannabis product.
[00:22:33] I mean what or how do I think about from a consumer point of view. How do I know that that's really the Bob Marley brand versus someone who just came up with their own logo and stuff and is calling it Bob Marley cannabis.
[00:22:45] I look at infringement happens. So it's possible so in my mind a consumer and there's an infringer comes along and some of this bet you know unscrupulous dispensary and start selling something it says Marley Natural odor.
[00:22:56] I mean look that's the whole reason the trademark law exists. Yeah right. You are a brand that sells quality right. People associate your name with that quality you are building up goodwill. So the whole purpose of protecting trademarks is to prevent parties from coming along stealing your name and getting the benefit of the goodwill you built up. So what happens. You have to enforce your trademark. You have your state trademark registration for Marley Natural. If someone comes along and you find out that someone's doing that you send a cease and desist letter and you nipped in the bud as quickly as you can.
[00:23:26] Yeah so a lot of those taking action and how and how did companies monitor this stuff like how do I know. How do I know that that's happening. I'm just relying upon reports from the public.
[00:23:36] Am I out there mystery shopping to figure out what the what the competitors there are different levels of how you go about doing it in certain you know there are things that we call watching services there are third party watch services you could be paying hundreds of dollars a year it's nothing BS I mean you get to common law searching you know and so essentially there are people watching for you in my clients what they do is they go you know as pretty frequently on a weekly basis you know they search for their names and they see if there's anything else out there. Yeah. And so people watch on their own. But it's also you can outsource that to watching services that are very very comprehensive and so they'll cover federal applications or cover a state trademark applications or cover business names which don't necessarily equate to trademarks. That's just the name business and not the name that people associate with you.
[00:24:27] What we call common law is a common law is since trademark rights flow through use in the US. Common law is who's using it which is super relevant for the cannabis industry because most people are just using it. A lot of companies don't necessarily file for the state trademark protection and a fair amount of them are or are cannot file for trademark application federally. So keep your eyes or your ears open maybe use a Washington service and do some policing on your own.
[00:24:57] Yeah so then started to other big country questions. The first one is international.
[00:25:02] Like how does this stuff kind of play out. Now that we're really looking at an international cannabis market you've got Canada is now legal. Israel Germany and like you've got all these countries that are now legalizing cannabis in various ways.
[00:25:13] And then you can answer this kind of with the other one too which is you know what happens when it is federally legal. What's the you know assuming that at some point we won't prognosticate timeframes necessarily but assuming that it goes legal on a federal level like what is the what do people need to do to kind of prepare for that or does it isn't naturally going to kind of fix itself.
[00:25:33] And what are the kind of the dynamics that will change once that happens once that happens domestically and then internationally.
[00:25:40] So it's the first address. You know the different foreign countries we buy inside our you know our businesses in foreign countries that are starting to look to enter into the US market. And so you have to become you have to be very very strategic. All right say the same issues apply the same issues apply ultimately. So whereas in certain fields you know a lot of times we have our foreign clients and they come in immediately and take their registration and file our vacation based off of it. You're not necessarily be able to do that. So to address the second part question which is really interesting is you know when that last gigantic domino falls and presumably you know fingers crossed it becomes federally legal then the then I think to me this green rush people are going rely upon their use in different states.
[00:26:26] But one of the interesting things is that you know in order to obtain know trademark registration there has to be used in commerce which means interest it in commerce which means goods going from one state to another you know where possibly you know people from multiple states coming to one but what's going to happen is there's going to be a gigantic rush. And what's gonna happen is when it seems like it's even getting close along with the money you're going to file and tend to use trademark applications you know months before then there's there's strategy involved. And ultimately without a doubt as soon as it goes legal they're going to be a ton of earmark applications relating to this industry being filed.
[00:27:05] Yes it's going to be interesting to see how that builds up and where we are at that point and what's going on.
[00:27:10] John this is great. So mission accomplished. So I learned a lot and it was fun. It was really helpful.
[00:27:19] I really appreciate the time. If people wanna find out more information about you about sort of the arty side of cannabis what's the best way to get it get better. Or contact you.
[00:27:30] All right. So my name is you know Jonathan J when 88 and last name is Puro Pierce and Peter you are O W I'm the only one of me. So if you Google me I'm the one you'll find. And then the other thing I'd say is our web you know our firm name is Gottlieb Rockman Greaseman. Our Web site is easy. It's just the initials G R dot com and my email address if you want to reach out directly to me is my first initial J last name. P U R R O W at G R R dot com and I like I said I'm happy to speak with anyone you know. Free of charge. See if there is a way we can help and go from there.
[00:28:10] Awesome and I'll make sure that those links and email address are on the show notes here so people can click through again on this. This is great. I really appreciate it.
[00:28:19] I'm looking forward to keeping in touch and seeing how all this kind of plays out as as the states continue to convert and continue to pass legislation and as we'll figure out what federally happens here when it happens.
[00:28:31] But I really appreciate the time.
[00:28:33] Thank you for having me. I really enjoyed it and I hope that the Friends of the part enjoy it as well.
[00:28:37] I'm sure they have. I'm sure there. Thanks again.
[00:28:41] You've been listening to Thinking Outside the Bud with Business Coach Bruce Eckfeldt to find a full list of podcast episodes. Download the tools and worksheets and access other great content. Visit the Web site at thinkingoutsidethebud.com. And don't forget to sign up for the free newsletter at thinkingoutsidethebud.com/newsletter.