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IP Protection For Schedule I Substances: Trade Secret Law Supplements In The Cannabis Industry

Written By: Cinder Cancilla

The protection of intellectual creations afforded by the law of Intellectual Property is comprised of the following four categories: patents, copyrights, trademarks, and trade secrets.[1] IP law aims to encourage a creative and innovative climate by balancing public interests with those of the innovators.[2] However, this balancing of interests becomes problematic when an inventor or producer is in the industry of Cannabis, where it is legal under State law but remains illegal under Federal law.[3] Fortunately, State-governed trade secret laws provide an alternative route of access to protection for those innovators’s intellectual creations in the Cannabis industry.

Under trade secret law, almost anything may qualify for protection as long as it has the potential to yield commercial value,[4] regardless of novelty.[5] Coca-Cola’s claim to “the world’s most guarded secret” is a famous example of where protection under trade secret law is favored over patent law; had Coca-Cola patented their recipe rather than keeping it a secret, exclusive use would be limited to merely twenty years.[6]

Categorically, trade secrets are fundamentally distinct because liability does not arise from mere appropriation like it does with patent, copyright, and trademark law.[7] Instead, liability under trade secret law requires the misappropriating party wrongfully acquire, disclose, or use an innovation that is, in fact, a secret.[8]  Secrecy need not be absolute, as disclosure may be necessary to exploit the innovation for commercial value.[9] However, reasonable precautions of preventing disclosure are necessary.[10] In the context of trade secret law, the term ‘wrongful’ may include a breach of contract (such as an employment contract), theft, bribery, misrepresentation, or a violation of some other confidential relationship.[11]

If we apply the principles of trade secret law to the cannabis industry, keeping in mind that it is an industry that is and has been largely criminalized for some time, it becomes clear that one’s good will and pedigree are critical to promoting new products or services, and to distinguishing between existing products or services.[12] In a landscape of vast products and services constantly emerging and evolving, intellectual property that the creators and inventors might seek to protect include: methods of treatment or application of cannabis products to one’s person; recipes for cannabis infused edible products; THC, CBD, and other chemical extraction techniques; consumption methods; indoor/outdoor growing processes[13]; customer lists; preferred vendors; business plans; or a variety of other proprietary information.[14] These products or services may be protected under state trade secret law where other categories of IP law can’t under the Controlled Substances Act,[15] so long as they are kept secret, through means such as: employment contracts for those involved in the production or services; non-disclosure agreements with specific vendors or retailers; or perhaps concealing access to greenhouses. Creators and inventors in the cannabis industry might also consider connecting their secret information with other materials, such as marketing collateral, apparel and accessories, etc., as additional means of placing intellectual products into commerce[16] to potentially bolster their ability to enforce protection of their products or services.

At the heart of trade secret laws are relationally specific duties.[17] As long as precautions preventing disclosure are reasonable under the circumstances, creators and innovators, i.e. those in the Cannabis industry, may protect their intellectual products from unauthorized use under trade secret laws. Accordingly, it is critical for those in the Cannabis industry to determine whether protecting their intellectual products under trade secret law is a practical alternative to the other categories of intellectual property that cannot provide adequate protection.

 

[1] https://www.law.cornell.edu/wex/intellectual_property.

[2] https://www.wipo.int/about-ip/en/.

[3] 21 U.S.C.A. § 841(a)(1) (West through P.L. 115-231).

[4] Cal. Civ. Code § 3426.1 (West current with all laws through Ch. 1016 of 2018 Reg. Sess., and all propositions on 2018 ballot).

[5] Robert G. Bone, A New Look at Trade Secret Law: Doctrine in Search of Justification, 68 Calif. L. Rev. 241 (1998) [hereinafter A New Look] (introduction to trade secrets).

[6] Alison Malsbury, Now is the Time to Identify and Protect Your Cannabis Trade Secrets, Canna Law Blog (June 12, 2018), https://www.cannalawblog.com/now-is-the-time-to-identify-and-protect-your-cannabis-trade-secrets/.

[7] A New Look, supra.

[8] Cal. Civ. Code § 3426.1 (West current with all laws through Ch. 1016 of 2018 Reg. Sess., and all propositions on 2018 ballot).

[9] A New Look, supra.

[10] Cal. Civ. Code § 3426.1 (West current with all laws through Ch. 1016 of 2018 Reg. Sess., and all propositions on 2018 ballot).

[11] A New Look, supra.

[12] Nicole Grimm, George Lyons III, and Brett Scott, Protect Your IP, Cannabis Business Times (July 11, 2018), https://www.cannabisbusinesstimes.com/article/protect-your-ip/.

[13] Nicole Grimm, George Lyons III, and Brett Scott, Protect Your IP, Cannabis Business Times (July 11, 2018), https://www.cannabisbusinesstimes.com/article/protect-your-ip/.

[14] Larry Sandell, What Cannabis Entrepreneurs Need To Know About Intellectual Property, Marijuana Moment (June 14, 2018), https://www.marijuanamoment.net/what-cannabis-entrepreneurs-need-to-know-about-intellectual-property/#your-business-secrets.

[15] 21 U.S.C.A. § 841(a)(1) (West through P.L. 115-231).

[16] Larry Sandell, What Cannabis Entrepreneurs Need To Know About Intellectual Property, Marijuana Moment (June 14, 2018), https://www.marijuanamoment.net/what-cannabis-entrepreneurs-need-to-know-about-intellectual-property/#your-business-secrets.

[17] A New Look, supra.

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Non-Appropriation in Space: A Surprisingly Old Dilemma with Patent Law

A Brief History on the Need for Patent Reform as More Nations and Private Entities Enter Space

Written By: Jessica Ramsey

On January 27, 2017, the Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space, Including the Moon and Other Celestial Bodies (the “Outer Space Treaty”) celebrated its fiftieth anniversary.[1] Arguably the most important body of space law with 89 signatory states[2], it is both shocking and predictable that the Treaty has never been amended.[3]

Why?

History explains. In October 1957, the U.S.S.R. successfully launched the first artificial satellite, Sputnik I, effectively initiating the Space Race.[4] The following July, the United States founded the National Aeronautics and Space Administration (“NASA”).[5] Less than a year later, the United Nations created the Committee on the Peaceful Uses of Outer Space (COPUOS).[6]

In 1967, COPOUS created the Outer Space Treaty, which was signed by over 50 nations amid the Cold War and global fear of nuclear weapons positioned in space.[7]  The Treaty is seventeen Articles of broad, cautionary language, warding against extending the arms race beyond the atmosphere.[8] Yet, because of its breadth, it has proven significantly more difficult to amend than to sign.

But here is where questions regarding patents in space likely began. Article II of the Outer Space Treaty explicitly states that space, including celestial bodies, “is not subject to national appropriation” by any means.[9]

Put bluntly, this is the precise opposite objective of a patent. Patents are territorial rights and almost every country has its own patent laws.[10] There are cooperative international systems like the Patent Cooperation Treaty (WIPO patents),[11] but these still do not remove the territorial nature of patents.[12]

Thus, the dilemma is revealed: patent law only provides protection in the territory of the country the patent is filed within. Even international patent laws require the territory be under control of a party state.[13] If no one country can control any territory in space, how is the appropriate patent law in space determined?

In 2004, this question was considered in “Intellectual Property and Space Activities,” a WIPO issue paper.[14] The document explains reconciling patent and space law is important mostly because space activities are becoming increasingly privatized.[15] These non-governmental entities tend to be “more conscious of their ‘property,’” including intellectual property.[16] This, paired with increasing international cooperation and immense private investments required in space activities, heightened the need for “simple, uniform and reliable” IP laws.[17]

Yet, the Outer Space Treaty and both national and international IP laws remain largely unchanged.[18] The only United States code specifically regarding IP in space was enacted in 1990 and merely overlaid current patent laws onto the territory of outer space.[19] This rather cookie-cutter approach is not in alignment with the Outer Space Treaty’s stance on “no national appropriation” in space.[20]

As of 2019, it has been 61 years since the first artificial satellite launched into space and 51 years since the signing of the Outer Space Treaty.[21] COPUOS membership has risen from 18 to 92 member states.[22] The Cold War has ended, the Internet was created, and the world has reached new heights of globalization.

Yet, the dilemma remains. The faster people enter space; the faster inventions will be produced as problems are experienced and subsequently solved through technology. The more technology created in space, the higher the need for uniform patent laws.

How will territorial patent laws and non-appropriative space law be reconciled?

 

[1] Jonathan Lim, The Future of the Outer Space Treaty – Peace and Security in the 21st Century, Global Politics Review 4, Oct. 2018, http://www.globalpoliticsreview.com/publications/2464-9929_v04_i02_p072.pdf (last visited Feb. 17, 2019).

[2] Id.

[3] 18 U.S.T. 2410.

[4] Steve Garber, Sputnik and The Dawn of the Space Age, NASA, Oct. 10, 2007, https://history.nasa.gov/sputnik/ (last visited Feb. 17, 2019).

[5] Steven J. Dick, The Birth of NASA, NASA, Mar. 28, 2008, https://www.nasa.gov/exploration/whyweexplore/Why_We_29.html (last visited Feb. 17, 2019).

[6] Committee on the Peaceful Uses of Outer Space, United Nations Office for Outer Space Affairs,

http://www.unoosa.org/oosa/en/ourwork/copuos/index.html (last visited Feb. 17, 2019).

[7] 18 U.S.T. 2410.

[8] Id.

[9] Id.

[10] Protecting intellectual property rights (IPR) overseas, United States Patent and Trademark Office, Jul. 4, 2009, https://www.uspto.gov/patents-getting-started/international-protection/protecting-intellectual-property-rights-ipr (last visited Feb. 17, 2019).

[11] Inside WIPO: What is WIPO?, World Intellectual Property Organization, https://www.wipo.int/about-wipo/en/ (last visited Feb. 17, 2019)

[12] PCT FAQs: Protecting your Inventions Abroad: Frequently Asked Questions About the Patent Cooperation Treaty (PCT) (status on October 2017), World Intellectual Property Organization, https://www.wipo.int/pct/en/faqs/faqs.html (last visited Feb. 17, 2019).

[13] Id.

[14] Intellectual Property and Space Activities: Issue paper prepared by the International Bureau of WIPO, World Intellectual Property Organization, Apr. 2004, https://www.wipo.int/export/sites/www/patent-law/en/developments/pdf/ip_space.pdf (last visited Feb. 17, 2019).

[15] Id.

[16] Id.

[17] Id.

[18] 18 U.S.T. 2410; World Intellectual Property Organization, supra note 12.

[19] 35 U.S.C § 105 (1990).

[20] 18 U.S.T. 2410.

[21] Garber, supra note 4; 18 U.S.T. 2410.

[22] Committee on the Peaceful Uses of Outer Space: Membership Evolution, United Nations Office for Outer Space Affairs, http://www.unoosa.org/oosa/en/ourwork/copuos/members/evolution.html (last visited Feb. 17, 2019).

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Mind What You “Like” on Facebook

Written By: Ali Mousavi

The connection between a person’s browsing history and his or her own state of health is too tenuous to support plaintiffs’ contention that the disclosure requirements of HIPAA or California Civil Code section 1798.91 apply in the Smith case.[1]

Facebook has been capturing and selling the details of users who browse third-party health sites.[2] Plaintiffs, Winston Smith and two Jane Does, alleged that Facebook violated numerous federal and state laws by collecting and using their browsing data from various healthcare related websites.[3] The suit names Facebook and seven cancer institutions as defendants.[4]

The suit alleges that Facebook’s use of tracking cookies means that any site with a “like” button can potentially send browsing data to Facebook. That includes the site they have visited, any pages within that site, and anything they might enter into the search bar.[5] Plaintiff Smith alleges that Facebook captured the information about his “likes” and sold the information without his consent.[6]

In determining consent, courts determine “whether the circumstances, considered as a whole, demonstrate that a reasonable person understood that an action would be carried out so that their acquiescence demonstrates knowing authorization.”[7] The court cited an excerpt of Facebook’s disclosure that explains its collection and use of information of a person who visits or uses a third-party website that in turn uses Facebook’s services, for example, the “like” button.[8] The Ninth Circuit’s reading of the disclosure is that a reasonable person viewing the pertinent part of the disclosure would understand that Facebook maintains the practices of “(a) collecting its user’s data from third-party sites and (b) later using the data for advertising purposes.”[9] Consequently, the court held that knowing authorization of these practices constitutes the plaintiff’s consent.[10] Therefore, the Ninth Circuit held that the district court properly dismissed the action due to the fact that knowledge is a consent.

Plaintiff also argued that the collected data is subject to more stringent disclosure requirement under the Health Information Portability and Accountability Act of 1996 (“HIPAA”).[11] The court rejected this argument stating that the connection between a person’s browsing history and his or her own state of health is too “tenuous” to be protected under HIPPA.[12] The court reasoning was that the information available on publicly accessible websites “stands in stark contrast” to the personally identifiable patient record and medical histories protected by the statute.[13]

What is left as an option for Smith and other Facebook users is to be mindful of what they “like” on Facebook.

 

[1]Smith v. Facebook, Inc., 745 F. App’x 8 at 9 (9th Cir. 2018).

[2] Emma Woollacott, Man Called Winston Smith Files Lawsuit Against ‘Big Brother’ Facebook, Forbes, Mar. 19, 2016, https://www.forbes.com/sites/emmawoollacott/2016/03/19/man-called-winston-smith-files-lawsuit-against-big-brother-facebook/#1217059c7e28 (last visited Mar. 10, 2019).

[3] Smith, 745 F. App’x 8 at 8.

[4] Woollacott, supra note 2.

[5] Id.

[6] Id.

[7] Smith, 745 F. App’x 8 at 8.

[8] Id.

[9] Id. at 8-9.

[10]Id. at 9.

[11] Id.

[12] Id.

[13] Id.