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Legalization drives out black-market participants by facilitating a shift to IP.

Spencer Keller 20, Staff Editor of the Texas A&M Law Review, JD from Texas A&M, Fall 2020, “How Small Cannabis Businesses can Survive the Hurdles of IP Protection,” Texas A&M Law Review, 8(1), pp. 222-223, Lexis, kav

Emerging cannabis businesses face significantly different hurdles compared to emerging businesses in other industries. Due to federal laws and administrative rulings, cannabis businesses cannot and do not enjoy the same patent and trademark advantages that emerging businesses in other industries enjoy.

These IP disadvantages mean that cannabis businesses must be mindful of their legal options and take advantage of these options in an effective and creative manner. Ideally, emerging cannabis businesses should utilize a combination of IP mechanisms to protect and build their brands as each confers different protections. When patenting is not a viable option, businesses can utilize ancillary and state trademarks, carefully protect trade secrets, and capitalize on branding techniques like the first-mover advantage. But given the cannabis industry's exponential growth, the federal government must remove the IP hurdles that emerging cannabis businesses face. Congress can and should act to faithfully execute its duty to "promote the Progress of Science and useful Arts" 207and grant cannabis businesses rights enjoyed by other industries. The most obvious measure Congress can take is legalizing the cultivation, transportation, sale, and use of marijuana on a federal level. Such action would likely create uniform regulation throughout the country whereas currently marijuana law is a patchwork of state law.

Federal legalization would quickly clear the questions over the legality of marijuana-related patents and would likely fill the gap of missing prior art. Legalization may entice black-market participants to seek patent protection, or more likely, simply disclose their technology, thereby placing it into the public domain. If these inventions and innovations are known to the public, they can qualify as prior art, preventing cannabis patentees from acquiring overly broad patent rights. Over time, cannabis businesses seeking patent protection would all be on an equal playing field, as the scope of patent rights would be more precise instead of overly broad as it likely is today.

Legalization would allow for more cannabis research opportunities within the United States, adding an influx of money to the economy while helping the United States gain a global foothold on the international cannabis industry as the industry is currently digging its foundation in foreign nations. Enticing research would also help the above-mentioned realm of cannabis patents by progressing technology to a point where a cannabis patent is undoubtedly novel and non-obvious.

Furthermore, legalization would bring black-market participants into the legal market. Such a move would allow for better policing of patents, trademarks, and trade secrets as legal participants are subject to increased regulations including inspections and disclosures. Such [*223] regulations also increase the tracking of goods from production to market, increasing policing capabilities while also increasing brand competition.

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