.75 Law & Legal CLE Credit – A/V Approval #1099182 Recording Date - February 7, 2019 Recording Availability – February 8, 2019

Meeting Location Date Time Topic

King County Bar Association 1200 Fifth Avenue - Suite 700

Seattle, WA

Thursday, February 7, 2019

12:00 PM to 1:15 PM

Cannabis Law and IP

AGENDA 12:00 PM Introduction 12:10 PM Presentation: ‘Cannabis Law and IP’, by Neil Juneja, Gleam Law, PLLC

Cannabis historical regulation

2018 Farm Bill

Washington cannabis regulation relevant to IP Licensing

Notable cannabis trademarks and cases

Notable cannabis patents and upcoming litigation

1:15 PM Adjourn

SPEAKER BIOGRAPHY Neil Juneja, Gleam Law, PLLC - Neil Juneja is the founder of Gleam Law, a cannabis-focused law firm with offices in Seattle, Portland, San Francisco, and Los Angeles. His practice focuses on business law, intellectual property, and regulatory compliance. In addition, Neil has written numerous article on cannabis law and intellectual property and spoken at events including in the National Mall in Washington DC, Seattle Hempfest, Continuing Legal Education seminars, and many cannabis industry events. Neil also appeared in Newsweek, Time Magazine, and on several documentaries for his work in the cannabis legal industry. He has been awarded numerous accolades including selection as one of the 40 under 40 most influential people in the cannabis industry, four SuperLawyer’s Rising Star awards, and the National Law Journal Cannabis Trailblazer award.

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Neil JunejaManaging Partner

February 8, 2019

gleam law

Cannabis Law and IP

Cannabis• A tall plant with a stiff upright stem,

divided serrated leaves, and glandular hairs. It is used to produce hemp fiber and as a psychotropic drug.

• Most popular recreational drug around the world, behind alcohol, caffeine, and tobacco.

• 100 million Americans have tried cannabis

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What is Cannabis?

• Cannabis sativa L.• Marijuana vs Hemp

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What is Cannabis?

• 113 cannabinoids

• THC, CBD, CBG, THC-V, etc.• Endocannabinoid System

• All animals have an ECS • Terpenes

• Provide flavor, aromatics, possible effects

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What is Cannabis?

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Cannabis extracts

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BHO CO2 Rosin Rosin

Hash Kief Rick Simpson Oil

Cannabis Prohibition

• Marihuana Tax Act of 1937

• Presented an unrealistic system for tax declarations on trade in Cannabis sativa (including hemp), and any application for tax stamps could be evidence supporting a criminal charge

• Comprehensive Drug Abuse Prevention and Control Act of 1970 and the Controlled Substances Act (the “CSA”)

• Implementation of the United Nations’ Single Convention on Narcotic Drugs

• Cannabis is a schedule I controlled substance

• The Drug Enforcement Administration was established in 1973 to enforce the CSA

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The Controlled Substances Act

• The term “marihuana” means all parts of the plant Cannabis sativa L., whether growing or not; the seeds thereof; the resin extracted from any part of such plant; and every compound, manufacture, salt, derivative, mixture, or preparation of such plant, its seeds or resin. Such term does not include the mature stalks of such plant, fiber produced from such stalks, oil or cake made from the seeds of such plant, any other compound, manufacture, salt, derivative, mixture, or preparation of such mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of such plant which is incapable of germination.

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Federal Law

• Controlled Substances Act (CSA)(21 USCV 801 et seq.)

• Marijuana a Schedule 1 drug

• Federal preemption of state laws in “positive conflict” with CSA

• Current Federal “Green Light” Policies – Political Calculation

• Ogden Memo, Cole Memos, Wilkinson Memo: Guidance for prosecutorial discretion – not federal legalization

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The Cole Memo

• Preventing the distribution of marijuana to minors;

• Preventing revenue from the sale of marijuana from going to criminal enterprises, gangs and cartels;

• Preventing the diversion of marijuana from states where it is legal under state law in some form to other states;

• Preventing state-authorized marijuana activity from being used as a cover or pretext for the trafficking of other illegal drugs or other illegal activity;

• Preventing violence and the use of firearms in the cultivation and distribution of marijuana;

• Preventing drugged driving and the exacerbation of other adverse public health consequences associated with marijuana use;

• Preventing the growing of marijuana on public lands and the attendant public safety and environmental dangers posed by marijuana production on public lands; and

• Preventing marijuana possession or use on federal property.

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Sessions Rescinds Cole Memo

• January 4, 2018

• No actual change in enforcement

• Chilled investment

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Legal Status

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Legal Status

• Legalize for adult use in 10 States• Medical/Decriminalized in 26

States• Fully Illegal in 14 States

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Washington State Marijuana Laws

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• Medical Marijuana Initiative 692 (1998)• Seattle Initiative 75 – “lowest law enforcement priority”• General Adult Use (“Recreational”) Initiative 502 (2012)• Attorney General’s Opinion re: local bans• I-502 Implementation – State Liquor Control Board

• WAC 314-55 – continuous amendments

• Legislative Amendments (2015)

• SB 5052 – Cannabis Patient Protection Act - “merger” of medical and general adult use

• HB 2136 – numerous taxation and structural changes

2018 Farm Bill

• Agriculture Improvement Act of 2018

• Descheduled hemp and CBD

• CBD is expected to be a multibillion U.S. market by the 2020s

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Market Size

• U.S. legal market size estimated at $7.06 billion (2016)

• Expected to grow at a CAGR of 24.9% from 2017 to 2025

• The Legal, Global Market is expected to reach 146.4 billion by 2025

Data Collected by Grand View Research

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Mainstream Investments

• Tilray, Inc. grew 850% after its IPO

• It has fallen, but is still up seven-times from IPO price

• Constellation Brands is investing ~$4 billion in cannabis

• Current owner of over 100 brands of beer, wine, and spirits

• Seattle-based retailer Have a Heart raised $25 million

• Largest private financing event for a U.S. retail cannabis company

• Planning on 18 new stores in five additional states

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Federal Trademark Protection: Must be Lawful Use Under Federal Law

• Section 1 of the Trademark Act, 15 U.S.C. §1051, permits application for registration of “a trademark used in commerce” (15 U.S.C. §1051(a)) or of a trademark that a person has a bona fide intention to use in commerce (15 U.S.C. §1051(b)).

• Section 45 of the Trademark Act, 15 U.S.C. §1127, defines “commerce” as “all commerce which may lawfully be regulated by Congress.”

• Outside of Schedule 1 drugs, the USPTO does not routinely inquire regarding possible illegal conduct during the course of application prosecution. See Kellogg Co. v. New Generation Foods Inc., 6 USPQ2d 2045 (TTAB 1988) (noting that the USPTO will not question labeling compliance during examination of a mark); Medtronic, Inc. v. Pacesetter Systems, Inc., 222 USPQ 80 (TTAB 1984); see also TMEP §907 (noting that “The” Office does not inquire whether use in commerce is lawful unless the record shows a clear violation of law, such as the sale or transportation of a controlled substance. The Office presumes that an applicant's use of the mark in commerce is lawful).

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Trademark

• Immoral/scandalous CSA rejection

• Money laundering rejection – not a legal use in commerce

• Gonzales v. Raich, 545 U.S. 1 (2005).

• Cannabis is still Schedule 1

• Hemp is legal but CBD falls under the FDA

• Epidiolex is currently only permitted CBD product

• Marijuana leaf and CANNABIS tricky to use

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Federal Protection for Ancillary Goods/Services

• Ancillary goods/services can be registered only if lawful use.

• U.S. Reg. No. 4,742,681 for providing info related to medical cannabis (i.e., not registered for cannabis nursery services).

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Hershey Co.

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Hershey Company, The et al v. Tincturebelle, LLC et al

Gorilla Glue #4

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True Party of Interest WAC 314-55-035

Any owner, entity manager, financier, “one who exercises any control over the applicant’s business operations,” or “any entity or person who is in receipt of, or has the right to receive a percentage of gross or net profits from the licensed business during any fill or partial calendar fiscal year.”

Also, all spouses.

• Six month Washington residency

• Source of funds

• Criminal background check

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Who is not a TPOI

• Landlords

• Turn-key premises

• Equipment leasing entities

• Intellectual Property licensing

• Suppliers

• Other arms-length transactions

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Headspace International LLC v Podworks Corp.

Trademark License control requirement

1. Contract language authorizing control over the licensee by the licensor;

2. Whether the licensor exercised actual control over the licensee; or

3. Whether the product quality over time was sufficient for the licensor to rely on the licensee to ensure quality control

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Marijuana Geographical Indications?

• Article 22 of the TRIPS Agreement explains geographic indicators to be “indications which identify a good as originating in the territory of a Member, or a region or locality in that territory, where a given quality, reputation or other characteristic of the good is essentially attributable to its geographic origin.”

• The Protection of Geographical Indications Act, 2004, Act 5 of 2004, Jamaica. 2013 Bilateral Swiss Trade Agreement – protects, e.g., Jamaican Cannabis Sativa.

• California “Medical Marijuana Regulation and Safety Act (MMRSA)” Section 19332.5 – only cannabis grown in Mendocino and Humboldt maybe called Mendocino grown and Humboldt grown. Mendocino Appellations Project (grower-led terroir initiative).

Cannabis Inventions

Methods of protection:

• Utility Patent

• Design Patent

• Plant Patent

• Asexual reproduction

• Plant Protection Variety Act (PVPA)

• Sexual reproduction

• Trade Secret

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First Cannabis Patent

• First cannabis [utility] patent issued by the USPTO:

• Cannabinoids as antioxidants and neuroprotectants

• U.S. Patent 6,630,507

• Assigned to the US Department of Health and Human Services

• Primarily cannabidiol (CBD), a non-psychoactive cannabinoid, but groups in psychoactive cannabinoids

• Often brought up by cannabis culture and the industry as hypocrisy in the US government stating there is no medical use while owning patents specifically on the medical use.

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• U.S. Patent 9,095,554 (granted in 2015)

• Claim goes to a bred plant having a BT/BD genotype, terpeneprofile where myrcene is not the dominant terpene, more than 1% terpenes, and CBD greater than 3%

• PTO determined that the amount of selective breeding resulted in a plant made by man – even without genetic modification

• Additional claims to administration methods such as through pulmonary and oral means.

Breeding Production, Processing and Use of Specialty Cannabis

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Plant Patent

• Must be novel and non-obvious, but not useful.

• To date, only one cannabis patent has been issued:

• Cannabis plant named ‘Ecuadorian Sativa’

• U.S. Patent PP27,475

• Claims to be an subspecies indica with traits of subspecies sativa

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Enforcement

• United Cannabis Corporation v. Pure Hemp Collective, Inc.,

• First cannabis patent litigation

• A liquid cannabinoid formulation, wherein at least 95% of the total cannabinoids is tetrahydrocannabinolic acid (THCa).

• “” “” THC, CBD, combinations therewith

• Enforceability is uncertain and further confused by recent DEA scheduling

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• GW Pharmaceuticals

• 5 CBD patents

• Over 98% CBD

• For treating epilepsy

• DEA rescheduled CBD to Schedule 5

• ONLY for FDA approved drugs

• US15/449,084 ; US15,449,124 ; US15/449,185 ; US15/449,204 ; US15/449.177

Epidiolex

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PVPA –Department of Agriculture

• New

• Distinct

• Uniform

• Stable

Requires 3,000 seed deposit with 85% germination rate

Plant Protection Variety Act on 1970

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Neil Juneja neil@gleamlaw.com

Gleam Law—Seattle Gleam Law–Los Angeles613 19th Ave E, Suite 202 730 Arizona AveSeattle, WA 98112 Santa Monica, CA 90401(206) 693-2900 (310) 596-3226

Gleam Law—San Francisco Gleam Law—PortlandOne Market St., Floor 36 2505 Se 11th Ave, Suite 350San Francisco, CA 94105 Portland, OR 97202(415)367-1300 (503)946-9885

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Freija

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By Banjo, Snic

Barnes, Tristan

Hodges, & Tyson

Peltzer. Freija.

2016.

Price: $250,000

Bio Mech Baby

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JOP. Bio Mech

Baby. 2016.

Price: $200,000

Pirate Ship

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Buck,

Laceface.

Pirate Ship.

2010.

Illuzion

Glass

Gallery.

Denver CO.

Price:

$250,000

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Starbucks Corporation v. Hitman Glass Case No. 2:16-CV-03937-ODW(PJW) (C.D. Cal. Oct. 20, 2016)

U.S. District Court judge in New York has ordered an Oregon artist

named James Landgraf to repay Starbucks $410,800 — $300,000

for copyright infringement, $99,000 for trademark infringement and

$11,580 in attorneys’ fees.

Hitman X Evol

Glass(James

Landgraf).

Price: $800-$8000