This summer, in addition to stepping up my research (and getting married), I’ve been helping run a class on intellectual property (IP) strategy in the business school here at Ohio State. The experience has been eye-opening. I had no concept of the magnitude of the role that the IP market has on our overall economy, and that single, massive transactions of IP between companies can have far-reaching socioeconomic effects. For most of us, I think the concept of IP is mostly a black box, and while we’re familiar with the general idea of a patent being a way to legally exclude one’s competition, we don’t know much about how they work. But whether we understand them or not, the reality is undeniable; in 2015, 84% of the combined market value of the firms indexed in the S&P500 was attributable to intellectual property, versus 68% in 1995 and 17% in 1975. Furthermore, consider Microsoft as an extreme example: in 2014, fully 70% of revenues at the firm were attributable to intellectual property licensing.

Here in the realm of plant science, we aren’t strangers to intellectual property. Many CAPS-affiliated faculty members hold patents on inventions that stem from CAPS-supported research. Furthermore, both scientists and the general population alike are familiar with one of the larger plant breeding-related IP stories of recent years, where Monsanto sued to protect its IP through disallowance of sowing the offspring of purchased seeds. But I was interested in looking for a newer, less-trodden story to write about for this blog post, so I searched around to find some novel, breeding-related IP news. Unexpectedly, my searches yielded a subject matter with many results from news outlets and academic journals: cannabis breeding. Bolstered by recent state-level legalization events, as well as the full legalization of cannabis in Canada, much of the news in plant-related IP right now is related to the sudden business opportunities in the nascent cannabis industry. It would seem that the fragmented nature of the black-market economy that supplied cannabis to American consumers for decades has upon legalization resulted in a patent and/or trademark goldmine. Cannabis-related firms now have the opportunity to monetize well-recognized cultivar/strain names that are holdovers from the black-market era, e.g. “Pineapple Express,” which was made famous in Judd Apotow’s 2008 movie of the same name (incidentally, in an act of solid IP strategy, “Pineapple Express” is now the trademarked name for a publicly-traded cannabis industry VC firm).

I suspect that the best case scenario for the nascent cannabis industry is similar to what the apple-growing industry has also achieved: development and marketing of niches within a single crop species. Many of us will be familiar with the fact that Granny Smiths are famous for being a baking apple, while the Cortland is better-suited to eating out of hand. Niche creation has resulted in substantial economic success for apple growers in Ohio and beyond for decades. This is to say nothing of the explosion of popularity experienced in recent years by the Honeycrisp apple, which is a patented plant owned by the University of Minnesota that has generated tens of millions in royalties for the institution. The revenue potential for patenting cannabis plants has begun to be realized, as in the past few years the US Patent and Trademark Office (USPTO) has granted patents to cannabis plants (e.g. Ecuadorian Sativa ‘CTS-A’, patent code USPP27475P2) and cannabis breeding and production methods (e.g. the utility patent US9095554). Therefore, I think that whatever happens on a macro-level for the cannabis industry will present a unique object lesson for future generations about the unusual circumstance of an instantiated market being subsumed by the market forces and regulatory structures of our economy. What does the future hold for the newest American crop, and how will firms make use of the USPTO to create and defend their markets?

Written by TPS Fellow Alex Turo