ASIPI 2019: Pot luck

In recent years, the legal status of cannabis has come increasingly under the spotlight. Canada made headlines last year as the first nation from the G7 and G20 economies to fully legalise the drug, which had been permitted for medicinal use since 2001.

Canada may be the biggest country to do so, but it was not the first. That was Uruguay in 2013—there is arguably no other region in the world with as liberal an approach to cannabis, in terms of the plant’s formal legal status, as Latin America. Possession below a certain weight is now decriminalised across huge swathes of the region.

While few countries have lifted all legal restrictions, the growing trend away from criminal sanctions for possession suggests that the direction of travel is moving ever more towards legalisation. Leaving aside the moral and political arguments in favour of legalisation, the undeniable shifts in global regulatory approaches throw up challenges and questions for brand owners.

When products are taken out of the black market and become legal, there will then be opportunities for brands to establish themselves in the market. With this, of course, comes the challenge of registering, protecting, and enforcing IP related to those products.

Overcoming obstacles

How difficult is it for cannabis brand owners to protect their IP? Article 7 of the Paris Convention provides that the nature of a good or service will not act as an obstacle to registration of trademark.

As Helena Camargo, partner and head of IP at Posse Herrera Ruiz in Bogotá explains, however, across Latin America the registration of cannabis marks is still subject to differing approaches in national law.

In Colombia, Camargo says, cannabis marks may be registered in all classes, including for terms featuring the word ‘cannabis’ and images of the plant itself. In Mexico, however, trademarks cannot contain the word ‘cannabis’ in the scope of coverage or images of cannabis plants.

In Peru, the situation is more nuanced: trademarks covering cannabis-related goods and services may be registered only in class 5, indicating that they are for medical purposes.

“Colombia has been one of the pioneers when regulating cannabis-related issues, and seed protection is no exception.” - Helena Camargo, partner and head of IP at Posse Herrera Ruiz

It is not just the registration of cannabis marks that poses issues for brand owners. As cannabis enters the sphere of legal goods and services, whether it be only for medicinal purposes, or for recreational use, like in Uruguay, it increasingly comes into contact with other industries and sectors. This has posed legal and regulatory challenges, particularly on a regional level.

According to Camargo, the interaction between cannabis and other industries has “unfortunately not played well across the region, precisely due to its lack of regulation all the way through these sectors in most Latin American countries”.

Leonardo Costa, partner at Brum Costa in Uruguay’s capital city, highlights one such example of conflict between cannabis laws and the regulations governing other industries in Uruguay.

Following the full legalisation of cannabis cultivation, possession and sale for both recreational and medicinal purposes, Costa says businesses involved in these industries may find themselves excluded from international trade.

US-based correspondent banks, which receive funds transferred from Uruguay to the US, are not permitted to accept money from businesses involved in the distribution of cannabis, with the hemp production stage being the only exception.

“This is a huge issue across all of the Americas,” Costa says. It is of particular concern to small markets such as Uruguay, he adds, as such transactions now carry legal risk.

On the domestic level, the way retailers can brand and market cannabis goods is still extremely limited, which will inevitably have an impact on trademark strategy. Uruguay and the Canadian province of Ontario have both adopted a similar model of uniform packaging, similar to the regulation of tobacco branding in many jurisdictions around the world, Costa says.

Plant varieties

Trademarks aside, what about the plants themselves? As more Latin America countries open up a legal space for cannabis producers, what mechanisms are available to protect different varieties?

“Colombia has been one of the pioneers when regulating cannabis-related issues, and seed protection is no exception,” Camargo says. Producers were invited to register their seeds and varieties with the Phytosanitary Authority by the end of 2018.

“Those who did not start their registration before said date must now buy their seeds from an allowed company or person, or import them,” Camargo advises.

Amid legal uncertainty and the ongoing political and moral debate, the situation regarding cannabis and IP remains volatile. What seems certain, however, is as more countries lean towards opening up a legal market for cannabis, the IP industry will have to grapple with the challenges of protecting IP.

Helena Camargo and Leonardo Costa will be speaking on ‘Cannabis & IP: where do they meet?’ on October 30 at 09:00 in Limatambo 3, 4, 5.