IP Licensing Attorneys
Who Specialize In Cannabis and Other Emerging Industries
The Evolving Role of IP Licensing in the Cannabis Space
Cannabis remains federally illegal, but that doesn’t mean that intellectual property associated with cannabis is federally illegal. Rattner Law’s attorneys routinely represent clients before the United States Patent and Trademark Office (the “USPTO”) to secure trademarks for our clients. We also engage at the state level to secure trademark protection for products that cannot obtain a federal trademark registration. And, as with all of our work, we partner with our clients to devise a holistic strategy that protects not just their current intellectual property, but positions them to expand and protect their future.
In fact, leveraging a cannabis brand’s trademarks, copyrights, and trade secrets is one of the least expensive ways for cannabis companies to expand across the United States. This is often done through intellectual property licensing agreements. Although regulatory requirements vary from state to state, agreements that allow a cannabis license-holding third party to use a brand’s intellectual property provide a brand the opportunity to expand its reach at minimal cost. There are several different ways these licensing agreements can be structured, and the attorneys at Rattner Law have negotiated and closed numerous intellectual property licensing transactions.
Unique Considerations For Licensing Intellectual Property in the Cannabis Industry
What is legal in one state is not necessarily legal in another state
Let’s assume you’ve developed a great logo for your cannabis product and it’s on sale in one state. You now want to bring that same product to market in another state using the same branding and logo. However, what worked in the first state may not be compliant with regulations in the second state.
The attorneys at Rattner Law scrutinize the proposed branding and logo to ensure it meets regulatory requirements, and if it does not, we will suggest ways to bring it into compliance with applicable regulations while changing the branding and logo as little as possible. This becomes especially important in states like New York, where the regulatory agency does not preapprove branding and logos.
Your business partner’s commitment to regulatory compliance is paramount
Imagine that you’ve entered into a long-term intellectual property licensing agreement under which your business is bringing an innovative product to a new state. Then, a few months into the relationship, you learn that the cannabis-touching licensee has been found by the regulatory agency to have committed major regulatory violations that lead to quarantine or recall of your brand’s products. That would not just hurt your business’ profitability in the short term, but it would also damage your product’s market position and the brand image.
A well-drafted intellectual property licensing agreement addresses these possibilities. However, it is even better to try to avoid this situation in the first place by partnering with a licensee who is committed to regulatory compliance, which means undertaking appropriate due diligence.
The strength of your business partner’s financials matter more than in other licensing deals
Plant-touching businesses are subject to extremely high taxation rates. This hurdle, combined with often uncertain cash flow and restricted access to capital means that your business partner may not be able to pay the licensing fees owed under the contract. Further, if there is no capital to pay licensing fees, litigation to recover these fees often will not make sense. Therefore, it is important to understand the strength of your business partner’s solvency and cash flow before entering into an intellectual property licensing deal.
Bringing Your IP To Other States: What You Need To Know
Bringing your intellectual property to a new state involves many different considerations. These include:
- What your long term goals are
- What specific intellectual property you aim to protect
- Determining whether you have adequately protected the intellectual property you seek to license
With these considerations in mind, you will want to meet decision-makers at licensed cannabis manufacturers and dispensaries to feel out entry into a new market. The attorneys at Rattner Law welcome the opportunity to partner with you and guide you through all phases of bringing your brand to market.
How To License Your IP In Cannabis
To start, you need to define what your intellectual property is and ensure that it is adequately protected. For example, has it been registered with any governmental agency?
Next, you must find a suitable business partner that you trust to use your intellectual property. That involves due diligence and agreement on what intellectual property is licensed, for what products, and how costs and revenue will be split, among many other topics.
Once you have these basics, Rattner Law’s experienced intellectual property attorneys will draft the agreements necessary to bring your brand to market while ensuring that your intellectual property remains protected.
All Practice Areas By Rattner Law
Well-drafted intellectual property licensing agreements are critical to protecting valuable intellectual property. Our experience handling numerous intellectual property matters, strong attention to detail, and understanding of likely outcomes and pitfalls in intellectual property licensing deals allow us to draft strong intellectual property licensing agreements. These licensing agreements are just one of the comprehensive suite of legal services Rattner Law offers.
These services include:
- Entity selection and formation
- Corporate governance documentation (i.e., operating agreements, shareholder agreements, etc.)
- Corporate governance advice
- Cannabis license applications
- Regulatory compliance and advice
- Contract review and interpretation
- Contract negotiation and drafting
- Deal structuring
- Mergers, acquisitions, and exits
- Real estate transactions
- Advocacy work before municipalities and community boards
- Fractional outside general counsel
- Labor and employment
- Business and commercial litigation
- Partnership disputes
- Mediation
- Arbitration
- Article 78 litigation
FAQs About IP Licensing In Cannabis
What is the difference between IP licensing and cannabis licensing?
Licensing your company’s intellectual property is not the same thing as applying for a cannabis license. An intellectual property license allows a third party to use your company’s logo, trademark, copyright, and trade secrets on certain products with defined limits. It is a business-to-business transaction.
Cannabis licensing, by contrast, is the process of applying for, receiving, and maintaining a license to “touch the plant” from a governmental agency. It is not a business-to-business transaction.
What kind of intellectual property can be licensed in the cannabis industry?
Most types of intellectual property that could be licensed in non-cannabis industries can also be licensed in the cannabis industry. However, there are often numerous regulatory considerations that do not come into play with other types of intellectual property licensing.
Contact Rattner Law
445 Hamilton Ave. Suite 1102, White Plains, NY 10601
Hours: 9:00 a.m.-5:00 p.m. EST
info@rattner-law.com
(914) 220-5468
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