Canada: IP Strategies for the Cannabis Industry

Intellectual Property (“IP”) typically provides a significant commercial advantage in the marketplace. With the legalization of cannabis in Canada in 2018 and increasing competition among cannabis producers, the cannabis industry has been exploring ways to protect its cash crop. Given that proprietary varieties of cannabis plants are highly valued in the cannabis industry, a lesser known and very specific type of IP right called Plant Breeders’ Rights (“PBR”) may see a rise in prominence. Cannabis producers would be well advised to consider how PBR can be used to protect their commercially valuable proprietary varieties and supplement their existing IP arsenal.

PBR Eligibility and Scope of Protection

The federal Plant Breeders’ Rights Act enables the protection of a plant variety where that variety is:

• new, in that its propagating or harvested material has not been sold by or with the concurrence of the breeder inside or outside Canada within a prescribed time period (either one, four, or six years) before the filing date of the application;
• by reason of its identifiable characteristics, it is clearly distinguishable from all varieties whose existence is a matter of common knowledge at the filing date of the application;
• stable in its essential characteristics, in that after repeated propagation it remains true to its description; and
• having regard to the particular features of its sexual reproduction or vegetative propagation, it is sufficiently homogeneous (i.e. in the event of sexual reproduction or vegetative propagation in substantial quantities, any variations in characteristics are predictable, capable of being described, and commercially acceptable).

The term of PBR protection is 25 years in the case of a tree or vine and 20 years in any other case from the day on which the certificate of PBR is issued. PBR grants to the holder the following exclusive rights:

• to produce and reproduce propagating material of the variety;
• to condition propagating material of the variety for the purposes of propagating the variety;
• to sell propagating material of the variety;
• to export or import propagating material of the variety;
• to make repeated use of propagating material of the variety to produce commercially another plant variety if the repetition is necessary for that purpose;
• in the case of a variety to which ornamental plants belong, if those plants are normally marketed for purposes other than propagation, to use any such plants or parts of those plants as propagating material for the production of ornamental plants or cut flowers;
• to stock propagating material of the variety for the purpose of doing any of the foregoing activities; and
• to authorize, conditionally or unconditionally, the doing of any of the foregoing activities.

In addition, the PBR holder has the exclusive right to do any of the foregoing activities in respect of harvested material, including whole plants or parts of plants, that is obtained through the unauthorized use of propagating material of the plant variety, unless the holder had reasonable opportunity to exercise their rights over the propagating material and failed to do so. In effect, this allows a PBR holder to exercise their rights over any harvested material arising from propagating material where one or more of the persons who previously possessed and sold the propagating material was not authorized to do so.

The rights granted to a PBR holder extend to plant varieties that are essentially derived (i.e. predominately derived from the protected variety and expressing the protected variety’s essential characteristics while being clearly distinguishable). Accordingly, other breeders cannot circumvent the PBR holder’s exclusive rights by breeding a variety that is only superficially distinct from the protected variety.

Exceptions to Protection

A PBR holder’s rights generally do not apply to the production, reproduction, conditioning, and stocking of harvested material by farmers for the sole purpose of propagation of the protected plant variety. Moreover, a PBR holder’s rights do not apply to acts done for (i) private and non-commercial purposes, (ii) experimental purposes, or (iii) for the purpose of breeding other plant varieties.

Acts done in relation to propagating or harvested material that has been sold in Canada by the PBR holder or with the PBR holder’s consent are also excluded from the application of the PBR holder’s rights, unless the act involves the further propagation of the plant variety or its export to a country that does not protect the variety if the exported material is not intended for consumption. Accordingly, the PBR holder cannot exercise rights over such activities as processing and consumption of propagating or harvested material that has been legitimately purchased.

Choosing the Right IP Protection: PBR and/or Patent

Canadian courts have held that higher life forms (including plants) are not patentable, meaning that a plant variety cannot simultaneously be protected under PBR and a patent. However, genetically modified cells and methods for producing genetically modified plants are patentable, and such patents grant to their owners the right to indirectly restrict cultivation of whole plants. Accordingly, given that the strength of patent protection is generally greater than that afforded by PBR (e.g. due to the exceptions to PBR protection outlined above), breeders who have developed novel plant varieties using genetic engineering techniques may find it advantageous to secure both patent protection over the transformed cells and PBR protection over the resultant plant varieties. Notably, plant varieties that have been developed using only traditional methods of selection and cultivation to yield varieties with distinguishing characteristics are not patentable and may only be protected under PBR.

Cannabis producers that have developed cannabis varieties that meet the eligibility criteria for PBR should evaluate how adding this IP right to their existing IP portfolio of patents and trademarks can enhance their competitive position in the marketplace.