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16 April 2018
The federal government is moving quickly towards legalising the possession and consumption of cannabis for recreational purposes. Although Canada's cannabis industry is already 'overgrown' with many licensed and unlicensed producers all vying for consumers' attention with different brands and strains of cannabis (for further details please see "Don't let your brand go to pot: what cannabis brand owners need to know"), only a few have taken advantage of the exclusive rights afforded producers under the Plant Breeders' Rights Act.
This update discusses the importance of plant breeders' rights for producers in Canada's cannabis industry and explains how they can protect their brands and strains of cannabis under the Trademarks Act and the Plant Breeders' Rights Act.
Licensed producers in Canada's cannabis industry are uniquely positioned to take advantage of these two complementary and overlapping IP regimes. Both the Trademarks Act and the Plant Breeders' Rights Act afford registrants exclusive rights to use registered trademarks to distinguish their goods and services, and to use registered denominations to distinguish their plant varieties (or 'strains') in Canada's marketplace.
However, licensed producers seeking to protect their IP rights should be mindful of the intersection between these two pieces of legislation. It is important to understand that plant variety denominations and trademarks afford their owners separate rights, and that there is a danger inherent in conflating the two.
Under the Plant Breeders' Rights Act, a plant breeder may apply to the Canadian Food Inspection Agency (CFIA) to obtain legal protection of a new 'plant variety', with the exception of algae, fungi and bacteria. A 'plant variety' is a plant grouping defined by a set of unique, genetically-governed characteristics that will not change on reproduction of the plants in the grouping.
The owner of registered rights in and to a particular plant variety enjoys the exclusive rights to protect that plant variety by managing and controlling the use of its propagating material (eg, seeds and stalks) for a limited period of time. Plant breeders' rights are granted for a term of either 20 or 25-year terms, depending on the category of plant variety. For example, a strain of the hemp plant, or cannabis sativa, is entitled to a 20-year term of protection, while a new tree or vine is entitled to a 25-year term. After the term of protection expires, the plant variety may be used freely by persons other than the plant breeder in Canada.
In many ways, the Plant Breeders' Rights Act affords a registered plant breeder a 'bundle of rights' similar to those granted to a copyright holder under the Copyright Act. For example, the holder of the plant breeder's rights in respect of a plant variety has the exclusive right to, among other acts:
In order to obtain these exclusive rights, a plant breeder – or its legal representative – must file an application to register its plant variety with the CFIA. As part of the application, the plant breeder must propose a name, or denomination, for its plant variety. The application can also be filed under an experimental number or proposed denomination, which can be changed any time before rights are granted. The commissioner of plant breeders' rights must ultimately approve the proposed denomination, which will then be recorded on the Varieties Register,(1) which is maintained by the CFIA.
The denomination is the designation by which a registered plant variety will be identified and protected. Once the commissioner has approved the proposed denomination and the plant breeder's rights have been granted in respect of the applied-for plant variety, the denomination must be used by anyone designating the variety for the purposes of selling the propagating material of the variety, during and following the expiry of the term of protection.
Cross-border rights, denominations and implications
If the plant breeder or another person has applied for, or already obtained, protection of the plant variety in another country, then that denomination must be used in Canada to identify and protect that plant variety. Similarly, if the plant variety is not protected in another country but is being marketed under or is known by a particular denomination in that country, that same denomination must be used if the variety is protected in Canada. However, the commissioner of plant breeders' rights may, in its sole discretion, reject the proposed or foreign denomination if it is "likely to mislead or to cause confusion concerning the characteristics, value or identity of the variety in question or the identity of its breeder" or considered "unsuitable for any reasonable cause", in which case the commissioner will direct the applicant to submit a suitable denomination instead.
Choosing a denomination
While neither the Plant Breeders' Rights Act nor its regulations offer detailed requirements for the suitability of a proposed denomination, the CFIA has published Variety Naming Guidelines to assist plant breeders in selecting suitable denominations for their new plant varieties:
"2. Denominations liable to mislead and/or cause confusion should be avoided. A denomination should be avoided that gives the impression that the plant variety:
3. Denominations should not cause confusion concerning the value of the plant variety by the use of comparatives or superlatives, such as better, best, superior, sweeter, etc.
4. The prior rights of third persons shall not be affected by the use of a proposed denomination. A denomination cannot be accepted if another right, already granted to a third party under any intellectual property legislation, is already in use.
8. A variety name shall not be such as to be considered offensive."
Using denominations and trademarks together
To prevent a plant breeder from monopolising the name of a new plant variety, and to ensure the free use of the plant variety after the plant breeder's rights have expired, the CFIA's Variety Naming Guidelines are clear that no person, including the plant breeder, may subsequently register a denomination – or any part of a denomination – as a trademark. If a plant breeder has obtained registered plant breeders' rights in and to a plant variety of a particular denomination, the plant breeder cannot claim the denomination as its trademark, even after its plant breeders' rights have expired. On the expiry of the term of protection, the denomination becomes the plant variety's generic name and cannot be registered as a trademark. Unlike plant breeders' rights, trademarks rights may be renewed indefinitely – which would inhibit the use of the plant variety by persons other than the plant breeder in Canada.
However, the Plant Breeders' Rights Act does permit plant breeders to market and sell their propagating material using "a trade-mark, trade name or other similar indication" in association with an approved denomination if that denomination is "easily recognizable". For example, the approved denomination of a hemp plant variety may be HTC123, but the licensed producer that owns the plant breeder's rights in and to the denomination may wish to market the variety as GREEN MONSTER. In this case, the propagating material of the variety could be sold as HTC123 or as HTC123 GREEN MONSTER, but not as GREEN MONSTER alone.
A trademark registration entitles its owner not only to exclusively use the subject trademark in Canada in connection with the registered goods or services, but also to prevent – and permanently enjoin – others from using the same mark, or a confusingly similar mark, in Canada in connection with the same or similar goods or services.
However, the Trademarks Act contains several provisions that restrict plant breeders and other persons in Canada from adopting, using and registering trademarks or trade names that are the same as, or "so nearly resembling… as to be likely to be mistaken" for, a denomination registered under the Plant Breeders' Rights Act.
Specifically, the Trademarks Act prohibits the adoption of a registered plant variety denomination as a trademark in association with the plant variety or another plant variety of the same species. Similarly, an application to register a plant variety denomination in association with a wide variety of goods and services, including seeds, may be considered objectionable by the Trademarks Office. Also prohibited is the use of such a plant variety denomination "in a way likely to mislead", and the adoption or use of "any mark so nearly resembling that denomination as to be likely to be mistaken therefore". The Trademarks Act also prevents the use in connection with a business – as a trademark or otherwise – of a registered plant variety denomination, and prohibits the registration of any such denomination as a trademark.
When the amendments to the Trademarks Act come into force in 2019, these prohibitions will not be repealed. Plant breeders and brand owners will still not be permitted to adopt, use or register plant variety denominations previously registered under the Plant Breeders' Rights Act.
That said, the amendments to the Trademarks Act will significantly expand the definition of the term 'trademark' to include – among other things – a scent or a taste, which are not likely to be mistaken for an alphanumeric plant variety denomination.
It is therefore possible that savvy licensed producers that own registered plant breeders' rights may still obtain registered trademark rights in and to the distinctive scents or tastes of their cannabis strains, having benefited from 20-year monopolies on the use of such strains by virtue of their plant breeders' rights.
Indeed, the 20-year term of protection during which a registered plant breeder is entitled to exclusively use its plant variety should afford the plant breeder ample time to develop a protectable reputation and goodwill in Canada that will assist it in establishing that an applied-for scent or taste is distinctive of the plant breeder as of the filing date of its trademark application.
Finally, where a plant breeder has not registered its rights under the Plant Breeders' Rights Act (or its plant breeder's rights have expired), but registers a trademark to protect its brand of a particular strain, there remains some risk that the mark will fall victim to 'genericide' if it is not properly policed.
For example, a cannabis brand owner's trademark may be rendered generic, and thus unprotectable, if the trademark becomes inextricably linked or synonymous with the plant variety and is used by consumers or other producers to describe the strain itself.
Cannabis brand owners should therefore keep a close eye on the cannabis marketplace to ensure that their trademarks do not fall into generic use, but instead remain distinctive indicators of their own brands of a particular strain of cannabis.
The Plant Breeders' Rights Act and the new Trademarks Act are of critical importance to licensed producers that are looking to make their mark in Canada's cannabis industry. Each piece of legislation presents unique opportunities for licensed producers to protect and exploit their intellectual property in order to maximise their market share. In view of both the practical and legal implications of the intersection between the Plant Breeders' Rights Act and the Trademarks Act, licensed producers – as plant breeders and brand owners – should consult local trademark counsel to help them to navigate the intricacies of these IP regimes.
For further information on this topic please contact Kwan T Loh or John Sparks at Smart & Biggar/Fetherstonhaugh's Vancouver office by telephone (+1 613 232 2486) or email (firstname.lastname@example.org or email@example.com). Alternatively, contact Graham Hood at Smart & Biggar/Fetherstonhaugh's Toronto office by telephone (+1 416 593 5514) or email (firstname.lastname@example.org). The Smart & Biggar/Fetherstonhaugh website can be accessed at www.smart-biggar.ca.
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