I wrote last week about how Big Ag combines its patent strategies with commodity-market pressures to force farmers to stop growing their own plants and start growing Big Ag’s patented GMO plants or eventually go out of business. While Big Ag can’t directly make you stop growing your own plants, they can make it impossible for you to compete with the farmers who embrace their system of patented seeds and related Big-Ag products to produce maximum-efficiency yields. The whole program is designed to drive you out of business if you don’t go along. And it will do exactly that.
If that sounds crazy or impossible, click over and read that blog. It’s scary stuff, but it has happened in the soy and corn industries, and Cannabis* is next if we don’t learn the lessons that history stands ready to teach us. Go ahead and read it; I’ll wait.
(*When I refer to Cannabis in this article and in most places I do so as plant geneticist, which is why I almost always use the capital C. I’m referring to the genus Cannabis, which ignores distinctions between “hemp” and “marijuana.” I care about the Cannabis industry and Cannabis breeders, growers, workers, and businesspeople whether they are on the high-THC or the low-THC side. Here’s hoping that distinction goes away. And, frankly, our brothers and sisters working in “industrial hemp” need the most help standing up to Big Ag because they will be on the front lines of the coming commodity wars.)
Welcome back. Now let’s talk about what we can do to avoid being the next soy or corn — how not to become Big Ag’s next edible. We’ll start by learning from another industry where things are different: the electronics industry.
Mutual Assured Destruction – Crazy But It Works
In the electronics industry, for the most part, there are several huge players, all of which own an immense number of patents. And, generally, they stay out of court. There are some conspicuous exceptions — like the recent Apple v. Qualcomm litigation which ended up costing Apple something like $4 billion — but that is unusual. Most of the time, these companies know they each have so many patents they could sue each other all day every day, and everyone would end up losing — like nuclear war; mutual assured destruction; MADness. So, they just don’t. Sometimes they cross-license each other, but they rarely end up in a fight to the death in court.
When I was newly graduated from law school, my law firm had an electronics client that didn’t like its balance of power with respect to one major competitor. I never knew exact details, but our client was paying its competitor a very high license fee for some computer chips they were using in their products — let’s say their license fee was about $10,000,000/year; I don’t think that’s too far off. So, they hired our firm to identify patents this competitor might infringe, in order to sort of level the playing field.
The lawyer in the office next door to mine spent all day every day searching for patents that the competitor company could possibly infringe, and then he would call the owner — usually a solo inventor or a small company — and simply ask them whether they would consider selling their patent. So, my colleague was a very highfalutin telephone solicitor. After a couple months of this, the lawyer had amassed a few dozen patents for our client, which apparently shifted the balance of power so much that the license they paid went down something like 99%! (From about $10,000,000 to about $100,000.) The details might be off, but the number of zeros is in the right range. I think my firm’s client spent around $250,000 on the legal fees and the purchase of the patents so, overall, it was a great investment.
It’s All About Leverage
The message is this: without ever going to court, having some patents you can use to THREATEN to go to court is VERY POWERFUL LEVERAGE — a lot like nuclear weapons. Nobody wants to use them; they are terribly destructive. Patent litigation is terribly expensive. If you have a large warchest of patents you can use to sue someone, chances go way down that you will be sued for patent infringement. In other words, patents can be used offensively AND defensively.
Here is how to stand up to the patent strategies of Big Cannabis. United Small Cannabis[1] needs its own patent strategy; if you have a gun ready for this kind of gunfight, chances are there won’t ever need to be an actual gunfight.
Greece is a Badass?
A useful analogy in international law is NATO, the North Atlantic Treaty Organization. Under NATO, every member country has agreed to come to the defense of every other member country if any member country comes under attack. So, nobody messes with Greece. Is that because Greece is a badass? Well, Greece was a badass a long time ago; but, right now, it’s more because Greece has some very powerful friends.
If every member of the Cannabis community who isn’t Big Cannabis agreed to join an alliance of some sort, it could have a power more-than-sufficient to counterbalance Big Cannabis.
An Effective Alliance Needs…
What would this sort of alliance need to look like in order to be effective?
It would need to have at least four characteristics:
- It would need to have some criteria for membership — to know who qualifies as Small Cannabis in the first place, and whether someone who qualifies is in good standing at the moment.
- It would need to agree and commit to some sort of mutual non-aggression or respect for each other’s rights.
- It would need to agree and commit to some sort of mutual defense.
- It would need to have some minimal level of funding and administration.
Starting A Discussion
This blog isn’t about having all the answers or solving all the problems. Hopefully it will start a discussion. But here are some ideas about points 1 through 4.
- Criteria for membership: Not every member needs to have patents. Greece doesn’t have any nuclear weapons — it has people who are worth protecting; it has an economy that can contribute a little to the NATO budget. By analogy to Greece and NATO: the more members of Small Cannabis, the more power it has, I think.
- Mutual non-aggression: Basic respect for each other’s brands, patents, reputation, and rights; community ethics; things that hopefully the community has stood for since before legalization. And — when it comes to Intellectual Property — a promise not to sue each other. Perhaps a binding agreement to start with mediation or arbitration if a genuine dispute arises. This would be much less expensive for all involved, anyway.
- Mutual defense: If anyone in United Small Cannabis is sued by Big Cannabis, EVERY SINGLE PATENT AND TRADEMARK in the portfolio of EVERY MEMBER of United Small Cannabis is available in a countersuit against the Big Cannabis plaintiff. If you sue my friend, I sue you. If you attack Greece, NATO attacks you — all day, every day, and twice on Sunday. (The practical result of this is that nobody will ever attack Greece, and hopefully nobody would ever sue a member of United Small Cannabis.)
- Funding and administration: Actually making any of items 1-3 work will be impossible without 1) someone running United Small Cannabis and 2) some funding to actually file a countersuit, if Big Cannabis ever were to test the resolve of United Small Cannabis the first time. So United Small Cannabis members would need to create a nonprofit administrative body and fund it with dues in order to make the counterbalancing power credible.
One other comment
There actually are SOME valid patents, even in the hands of Big Cannabis.
Let’s suppose that Big Cannabis actually does invent something stupendously useful, valuable, and meritorious and it has wide applicability. Just as an example, it’s a non-GMO approach to some kind of disease resistance that really works for all cultivars and really is new and non-obvious. In other words, it’s a genuine invention that benefits everyone, just like inventions are supposed to be when they’re truly patent-worthy. (Face it — that happens sometimes, even when it’s done by someone you don’t especially like.)
There could be an approximately equal balance of power and equal strength of patents between Big Cannabis, with its patent portfolio, and United Small Cannabis, with its aggregate patent portfolio.
This could be very useful if Big Cannabis ever actually did invent something that everyone in the entire Cannabis community really did need access to. Maybe that will never happen, but maybe it will. It would be nice to have some negotiating leverage if that situation should ever arise, instead of being completely locked out of a game-changing technology. That sort of lockout is what Big Cannabis promises to its investors. (Maybe you’ve seen a video like that.)
Remember – It’s All About Leverage
So, if the aggregate patent portfolio — a patent pool as these things are sometimes called — included some things that Big Cannabis needed, or perhaps some things that Big Cannabis happened to be infringing and could be threatened with, then the two sides would have a balance of power that would otherwise be unthinkable under any other scenario. It would make it so the parties could negotiate genuinely fair licensing terms.
Going back to this imaginary situation in which Big Cannabis has a technology that everyone needs access to — United Small Cannabis could, in this case, have the kind of leverage necessary to be able to negotiate a license that would fairly compensate Big Cannabis for the legitimate discovery while making the technology accessible to the entire industry.
Make This Happen – Tell A Friend – Start a Movement
What are our next steps? If you know someone who has a small Cannabis-related business of any kind (and don’t forget hemp!), share this with them. Ask them to share it with others. Go to plantlaw.com, risingtidecollective.co, cannabiscultivatorsunite.com, and futurecannabisproject.org. The community needs to create some momentum behind the creation of a NATO-like organization – in this blog it is called United Small Cannabis, but the name doesn’t matter. What matters is that it can be a genuine counterbalance to the power of Big Cannabis.
[1] United Small Cannabis is an arbitrary placeholder name for a coalition of growers, breeders, and other small Cannabis-related businesses that are struggling not to be overwhelmed by Big Cannabis, whether that is a Monsanto-like GMO-purveying Big Ag company or a massively funded, monolithic, vertically integrated, publicly traded giant. Organizations that have started from grassroots and are working to address these concerns are the Rising Tide Collective (risingtidecollective.co), and Cannabis Cultivators Unite (www.cannabiscultivatorsunite.com).