A budding industry for cannabis products in New Zealand – Lexology

Recreational Cannabis Legalisation

In New Zealand, the Misuse of Drugs Act 1975 prohibits the use and supply of recreational cannabis. However, the use of cannabis for medicinal purposes is legal, and licensed commercial cultivation and manufacture of medicinal cannabis is permitted.

In September 2020, New Zealanders will participate in a non-binding cannabis referendum on the question whether to legalise the use and supply of cannabis for recreational purposes.

New Zealanders will be given the option of voting either for or against the proposed Cannabis Legalisation and Control Bill (the Bill). The final version of the Bill, which was released in May 2020, legalises the use of cannabis for persons over the age of 20, but places severe restrictions around the promotion and packaging of cannabis products.

The proposed Cannabis Legalisation and Control Bill

As part of its harm prevention approach, the proposed Bill places severe restrictions on the promotion of recreational cannabis products and imposes strict packaging standards. This AJ Park article provides more information about these provisions.

The Bill also places limitations on the use of cannabis product trade marks. In particular, the Bill prohibits cannabis product trade marks from being:

  • promoted or advertised;
  • displayed outside a retailer’s place of business;
  • used on non-cannabis products; or
  • used in relation to services, activities, events, scholarships and sponsorships.

In addition, the Bill gives the Governor-General the power to make regulations prescribing the appearance of packaging for cannabis products, including the font, size, and colour scheme of cannabis product trade marks. These regulations are likely to be similar to the Smoke-free Environments Regulations, which prescribe a standard font and size for tobacco product trade marks.

Trade marks for recreational cannabis

Notwithstanding the current prohibition on use and supply, trade marks covering recreational cannabis can nevertheless be registered with the Intellectual Property Office of New Zealand (IPONZ).

Article (15)4 of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), which New Zealand has ratified, provides that ‘the nature of the goods or services to which a trade mark is to be applied shall in no case form an obstacle to registration of the trade mark’. Consequently, IPONZ should not raise a section 17(1)(b) Trade Marks Act 2002 (TMA) ‘contrary to law’ objection to a trade mark application covering recreational cannabis, and the application should proceed to registration if there are no other issues.

Trade mark owners should note, however, that if a trade mark is not used for a continuous three-year period, it may become vulnerable to revocation for non-use. Although a trade mark owner in New Zealand can successfully defend such a non-use action by showing ‘special circumstances that are outside the control of the owner’ under section 66(2) of the TMA, it is unlikely that the prohibition against the use and supply of recreational cannabis will qualify as ‘special circumstances’.

Anyone who registers trade marks for recreational cannabis before the Bill passes is therefore at risk of having their registrations revoked for non-use.

Trade marks for medicinal cannabis

Trade marks covering medicinal cannabis can be registered with IPONZ, provided the specifications are restricted to class 5 (pharmaceutical products). If the trade mark contains elements indicating that the goods are medicinal cannabis, but covers goods in other classes, IPONZ will raise a section 17(1)(a) TMA ‘likely to cause confusion’ objection against the application.

Acceptable descriptions in class 5 would include ‘medicinal cannabis oil; medicinal cannabis balm; medicinal cannabis cookies’. Trade mark owners should take note of this policy and cover all relevant medicinal cannabis products in class 5, regardless of whether these products are in capsule, oil, or edible form.

Patents for medicinal or recreational cannabis

It is currently possible to obtain patent protection for inventions related to medicinal or recreational cannabis products. For example, patents could be granted for new methods of purifying cannabis oil, new medicaments containing active ingredients isolated from cannabis, or new nutrient growing mediums. There are a number of granted and pending patents in this space.

However, a patent only provides the owner with the right to stop others from copying their invention, and does not provide the owner with a positive right to carry out the invention.

Plant variety rights (PVRs) for cannabis varieties

Under the current rules, it is possible to apply for a PVR for a cannabis variety. However, before granting an application, the PVR Office usually requires a field trial to compare the new variety with varieties that were already known. The rules regulating possession of cannabis plants mean it may be difficult for the applicant to carry out the required testing in New Zealand.

For example, the trial may include comparator varieties that the applicant is not authorised to possess, or may require growing more plants than the applicant is licensed for. In those circumstances, the applicant may need to rely on testing carried out overseas.

There are currently no applications or granted PVRs for medicinal or recreational cannabis varieties in New Zealand.

Key takeaways

If there is a majority ‘yes’ vote in New Zealand’s upcoming cannabis referendum, and the proposed Bill passes, New Zealand’s trade mark, patent and PVR landscape will likely change significantly.