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The concept on intellectual property derives from the fact that certain products of human intellect should be provided with same protective rights that applies to physical property. For any company, their intellectual property holds high value, as it requires heavy investments, brainpower and skills to produce it. This makes it essential for them to protect their IP from others. This IP can take many forms. Although IP are intangible assets, they can be far more valuable than a company’s physical assets. According to its definition, Intellectual property refers to creations of the mind, such as inventions, literary and artistic works, designs & symbols, names and images used for trade and commerce.
For any industry whether manufacturing, fashion & clothing, or even cannabis, companies need to remain vigilant about threats to their intellectual property. In our article today, we will be taking example of different industries while highlighting the legal issues pertinent to those industries, especially in relation to IP complications.
1. The fashion industry
As of 2022, the global fashion industry stands at $1.7 trillion. The sector witnessed a growth rate of 5.46% in 2017 to 6.2% before the COVID-19 pandemic. The fashion industry is highly competitive and fast driven. It is possible that the styles which are trending now will become outdated as the seasons pass. Often we witnessed that fashion designs seen on the runway of Lakme Fashion Week or New York Fashion Week are copied and sold cheaply the following week. Additionally, fashion designers also draw inspirations from different cultures and sometimes from their competitors too. They use the essence from other people’s design and present it using their own creativity. But, this gives rise to an important question, does such practice put these designers under scrutiny and how do they get away with it? Moving on, there exists a complete industry consisting of knockoff purses, shoes and other fashion goods and more than often analysts have found that instead of harming the high-end fashion designers’ brand, these cheap knockoffs are actually impactful when considering to enhance the brand’s value.
Coco Chanel once said, “if you want to be original, be ready to be copied.” In the apparel industry, IP plays an important role, however, largely through trademark law, not copyright. If we take example of the U.S. copyright laws, similar level of protection is not provided to fashion designs as those provided to other creative media such as art, literature and film. The U.S. law states that for an item to be protected under copyright, it cannot be functional, and because of this, the basic design of any garment can be copied without being faced with any consequence. But this does not mean that the fashion industry does not get any protection. Fashion brands widely use trademarks to protect themselves from knockoffs, and other infringing products. Many brands use trademark law to protect certain characteristics of their products, it could be their pattern, colour or more. Additionally, brand names and logos also carry IP value and need to be protected. If a consumer views names such as Gucci or Louis Vuitton, on any product, it is certain their expectations will rise. These brands carry a social status with the product they endorse. As a result, to protect this status and the company’s name, apparel companies can protect their brand names or trademarks through means such trademark infringement claims or cease and desist letters.
2. The cannabis industry
In 2020, the global cannabis market size was $20.47 billion, with a projected growth of $197.74 billion in 2028. The industry was also expected to grow at a CAGR of 32.04% from the period of 2021-2028. Over the years, the recreational and medicinal use of marijuana has grown, which has proved to become a driver in its growth in the society as a whole. The cannabis market is also witnessing a lot more products being developed, which means that consumers under this sector will be provided with a lot of choice. If we consider the legalisation of cannabis, this still remains a relatively new phenomenon. Many countries have already legalised the use of cannabis, which has also become a factor in the increase in its demand. As laws will become more flexible in this industry, we can expect the demand of cannabis to increase in the coming years. If we consider IP issues in the cannabis industry, the same becomes very tricky. The prime reason being, the use of cannabis is still illegal under federal law, for the time being. For each nation, laws in this regard varies widely.
Therefore, for companies under this sector, how can they protect their brands? Taking example of the scenario in the U.S., cannabis is still listed as a Schedule I drug (the same category used for LSD and heroin), under the Controlled Substances Act. As a result of this companies cannot obtain federal trademark registrations for cannabis products. The reason for the same being, that the U.S. Lanham Act only allows registration of goods that are lawfully “sold or transported in commerce.” Moving on, if we consider trademark registrations for companies involved in cannabis businesses, the same can only be done in states where cannabis products are legal, however, this does not grant broader, nationwide protection to companies seeking to enforce their marks in other states where there may be infringers.
Let us take another example, considering India. The nation has had a relationship with cannabis for a prolonged period of time. Even the early texts such as the Vedas have references to these plants. However, even after the historic ties, it is currently illegal to possess or make use of cannabis in India. The only exception provided are to government authorised premises that produce or sell “bhang” or allow research and medical use of it. In India, only a few places have been authorised to conduct clinical trials of the use of CBD. These include the Indian Institute of Integrative Medicine, which is backed by the Tata Memorial Hospital in Mumbai.
The concept of cannabis is largely misunderstood in India from legal viewpoint. If we refer to the Narcotic Drugs and Psychotropic Substances Act of 1985, both trade as well as consumption of cannabis of any form is illegal and an individual who is found guilty could be imprisoned for the same for 20 years. But in recent years, India has been witnessing many startups within the cannabis industry coming into existence. These startups have been focusing mainly on medicine, cosmetics, textile, and food. As of now, the entire control regarding the production and research surrounding the cannabis is given solely to the state government. For instance, in the states of Uttarakhand, the states have received license for hemp production. Through this we can understand that it isn’t possible for a cannabis business in India to get a trademark in the country. While we can expect that in the future, businesses will have this power to trademark their products or brands, but as of now the cannabis industry of India is completely controlled by the government.
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