Cannabis and Federal Intervention: Could The End Be Near?

The STATES Act of 2018 was introduced to ensure each State has the right to determine, for itself, the best approach to marijuana use, sales and enforcement within its border.

Forty-six U.S. states have laws permitting, or decriminalizing, marijuana or marijuana-based products. Each of these states has developed their own approaches to marijuana enforcement.  As more continue to consider updates to their marijuana regulations, it has become crucial that Congress take action to safeguard the states’ enforcement autonomy.

On June 7, 2018, the first bicameral, bipartisan legislation was introduced that could end the threat of federal intervention and prosecution – in states that regulate marijuana use and sales.  This legislation appears to have Presidential support, and now Congress must do its part by moving this legislation forward.

The STATES Act

The Strengthening the Tenth Amendment Through Entrusting States (STATES) Act of 2018 was introduced to ensure each State has the right to determine, for itself, the best approach to marijuana use, sales and enforcement within its border.  This bill also contains common-sense guardrails to ensure states, territories, and tribes, which regulate marijuana, do so in a manner that is safe and respectful of the impacts on their neighbors. 

What Does The Act Do?

Here are some highlights:

  • Amends the Controlled Substances Act (CSA) so, as long as states and tribes comply with a few basic protections, its provisions no longer apply to any person acting in compliance with state or tribal laws relating to marijuana activities
     
  • Excludes industrial hemp from the CSA
     
  • Provides banks with additional guidance, thus lifting prior restrictions. The act states that compliant transactions are not trafficking, and do not result in proceeds of an unlawful transaction
     
  • Prohibits the following:
    • Distribution of marijuana at transportation safety facilities such as rest areas and truck stops
    • Distribution or sale of recreational marijuana to persons under the age of 21. There is an exception for medical purposes
    • Employment of persons under age 18 in marijuana operations

What Does The Act Not Do?

The Act does not amend the CSA as to marijuana (other than hemp) which in turn does not alleviate the effects of Tax Code 280E for the marijuana industry

Could this be the first step to the end of federal intervention?

Stay tuned.  Lindsey Weidenbach, at JDSA Law, is closely following this developing legislation regarding marijuana use and sales, and will update the JDSA Blog as the topic unfolds. 

Cannabis Regulations: The Positive Side of Federal Enforcement

Yes, the Feds are coming, but there is a positive side to their approach.

When federal enforcement of the cannabis regulations is mentioned, there is most often a negative reaction:  fear of raids, property seizure and court battles.

Yes, the Feds are coming, but there is a positive side to their approach.  Federal enforcement has begun, and it is focusing—exclusively—on the black market. This is the positive side to the flurry of cannabis enforcement, and the legal, regulated cannabis industry is benefitting.

Recent Examples

  • In the Seattle area, U.S. authorities arrested several illegal, unlicensed cannabis growers in an investigation into what is said to be an international black market cannabis operation financed by Chinese money. Authorities are still searching for the two men who are suspected of leading a crime ring that used hundreds of thousands of dollars wired from China to illegally grow cannabis in 17 homes around Washington State, and then shipped the cannabis to New York's black market.
  • Hundreds of federal and local law enforcement agents raided 74 houses in the Sacramento region – breaking up a network of illegal cannabis growers financed by dark money from China.
  • In Sacramento, federal and state authorities announced a joint effort to target illegal cannabis grows, with $2.5 million in federal money backing the effort.

Authorities Are Assisting the Industry

The federal Drug Enforcement Administration (DEA) and Department of Homeland Security are leading the efforts to crack down on the cannabis black market, and are supporting the state-legal cannabis industry.  Arrests are being made to those who violate cannabis licensing laws, in an effort to protect the investment and businesses who are following state law.  The black market is a competitor of the legal, regulated market, and the elimination of the black market is necessary for the legal, regulated market to thrive.

While it may seem the majority of information we hear regarding federal involvement in cannabis is in a negative light, on the brighter side, the U.S. Department of Justice is enforcing the legalization rules and regulations established in the nine legal cannabis states by shutting down the black market.  Enforcement can help legitimize the industry, and any assistance to eliminate the black market is federal money and time well spent.

For additional information on changes that impact the cannabis industry, check out the JDSA website regularly or contact Lindsey Weidenbach with questions.

ICE Audits Expected To Increase This Summer

As previously reported, investigations by the U.S. Immigration and Customs Enforcement (ICE) officials are expected to increase, especially throughout this summer.  They will be scrutinizing suspected, undocumented workers and the businesses that employ them. 

Time is of the essence. Review your ICE Audit & Raid Plan in the event your business receives an unexpected visit from this federal agency.  Your ICE Audit & Raid Plan should establish your protocols for responding to a workplace audit or raid.

WHAT EMPLOYERS SHOULD KNOW

  • Be aware — Understand that violations have serious consequences including monetary penalties and arrests of unauthorized workers and employers.
  • Be prepared — Plan for the possibility of receiving a Notice of Inspection (NOI) of your Forms I-9 or a workplace "raid."
  • Be ready — Ensure the identity and work authorization is verified for each employee with a Form I-9.

DON’T DELAY – PREPARE NOW

You can never anticipate if this activity will impact your business. It is important to have proactive measures in place including an ICE Audit & Raid Plan, and to keep your employees calm during such a disruptive time. 

If you need assistance or advice, contact an attorney at JDSA Law.

IMPACT: The Tariff War on Washington Apple Growers

These tariffs could end up hurting not only the growers in our state, but also families across Washington and the larger Washington economy.

At the end of May, U.S. President Trump imposed import tariffs on steel and aluminum from Europe, Mexico and Canada. This could have a significant economic impact far beyond the steel and aluminum industries. 

On the heels of this announcement, Mexico declared they, in turn, will levy tariffs on imports of U.S. products including pork, cheese, potatoes and, you guessed it, Washington State apples.  And, as the largest foreign customer for Washington State Apple Growers, the effects of these tariffs will hit those in our own backyard.

How might this effect our local economy?

As widely known, Washington exports apples across the globe. This has a huge impact to our local economy —  not only for the companies that grow, pack and ship apples, but also for the workers who harvest them.  Mexico is the largest export market for Washington Apple Growers.  Each year, Washington exports $200-$250 million in apples to Mexico, which is approximately 10 percent of its total market.  Mexico's recent announcement to impose their own tariffs on apple imports from the U.S. means that Washington apple growers have to find other markets, to export apples. Perhaps, shipping to other states within the U.S. or exporting to other countries who do not impose import tariffs.  Regardless of where these new buys come from, creating and fostering those relationships does not happen overnight.

While the Trump administration says the goal of these import tariffs is to improve American manufacturing and protect U.S. steel and aluminum producers, members of the Washington State Senate and House of Representatives disagree. Many fear that American farmers and American companies will lose their foreign markets due to these import tariffs, which could take years to get back if tariffs are ever lifted.  Additionally, these tariffs could end up hurting not only the growers in our state, but also families across Washington and the larger Washington economy. 

What will be the lasting impact? 

On the surface, it may seem these import tariffs could benefit American makers of steel and aluminum by making foreign metals more expensive. However, a lasting negative impact on other U.S. companies, the economy, and consumers across the country is quite possible.  Only time will tell the true impact of these tariffs on the U.S., and how long the impact will last.

We will update you as additional information on this topic emerges.

Visit the JDSA Blog regularly, and stay up-to-date with news and information that impact you. 

Tip Pooling: Is Now Permissible

In March, the U.S. Department of Labor’s Wage and Hour Division issued a Field Assistance Bulletin that announced a rollback in the tip credit rules under the Fair Labor Standards Act (FLSA).  This changes the way Washington employers can administer tip-pooling in their businesses.  Under the rollback, “back of house” employees (e.g., cooks, bussers, or even stock clerks), can now benefit from—and even share—tips with “front of house” employees (e.g., wait staff, food and beverage servers).  So whether you own a winery, restaurant or other business that employs staff who receive tips, it is important to understand your tip-pooling options.  

What Does This Mean for Employers?

With this rollback, employers now have the option to implement back of house tip-pooling and can implement a policy that shares tips received by front of house staff with back of house individuals. However, back of house tip-pooling is entirely optional: employers are not required to adopt this change. 

Employers that choose to adopt this change may select any method to disburse the funds. Some employers may elect to have the front of house employees choose how much they tip back of house staff, while others may elect to disburse a certain pre-defined percentage from all staff to back of house workers.

However, tip-pooling can be a trap for the unwary.

Regardless of the tip-pooling method chosen, the change in the FLSA has other stipulations employers should be aware of:

  • The FLSA prohibits employers, managers and supervisors from participating in tip pools
  • Employers can also withhold certain fees and costs from pooled tips (such as credit card processing fees if tip was paid via credit card), but not others
  • The FLSA also contains a monetary penalty for violations that employers should be aware of 

To learn more about these changes or how tip-pooling may impact your business, visit the U.S. Department of Labor’s website, refer to the published Fact Sheet or contact an attorney at JDSA Law.

Cannabis Businesses: Insurance Needs 101

Regardless of what provider you use, it is important to consider six primary types of insurance coverage for your operations.

It’s no surprise. New issues arise practically daily for cannabis business owners and they often feel like an uphill battle.  While this industry is still prohibited on a federal level, cannabis business owners have traditionally looked to smaller or state licensed resources for support finding a friendly approach.

Insurance agencies may be opening doors, rather than closing them.  As the number of cannabis businesses in need of coverage has grown, a handful of larger carriers, most notably Germany's Hannover Re, have begun offering insurance products tailored to the cannabis industry.  Regardless of what provider you use to obtain insurance for your cannabis business, it is important to consider purchasing six primary types of insurance coverage for your operations.  


Six Major Types of Coverage:

First-Party Property

Comprehensive first-party property insurance is an important policy for any cannabis business.  The policy should include coverage for theft, property damage, and business interruption costs and in particular, ensure it contains the following:

  • The highest possible policy limits to protect against theft as cannabis businesses tend to be cash-heavy
  • A higher-limit property damage coverage for those businesses in the cultivation and processing sectors of the industry to address the heightened risk of fire associated with these types of operations
  • Robust business interruption coverage to offset any losses or delays resulting from a break in the supply chain
  • Language ensuring the carrier won't later seek to deny coverage on the basis of cannabis being prohibited on a federal level

Commercial Auto

For those cannabis businesses that transport products, it is essential to obtain commercial auto coverage. Cannabis-specific commercial auto policies extend many of the same benefits as traditional auto policies, such as accident coverage and rental reimbursement but many traditional auto insurers will refuse coverage to businesses that haul cannabis.  For companies that do provide commercial auto policies to cannabis business owners, pricing for these policies may differ depending on the type of cannabis business (processor vs grower vs retailer) you are.  Make sure your employees are not use their own vehicles to transport product because their personal insurance will not cover the transportation of cannabis.

Product Liability

Every cannabis business should consider purchasing product liability insurance as they can be brought into litigation with the wide range of legal exposure tied to their products.  The industry is vulnerable to product liability litigation due to the numerous different cannabis strains and derivative products of varying potency available for purchase.  When reviewing such a policy for your business, it is critical to review any exclusions to ensure the products you provide are covered.  

Cyber Insurance

Cannabis businesses are not exempt from the threat of cyberattacks and should consider purchasing specialized cyber insurance.  Data obtained from seed-to-sale tracking is a vulnerability to cannabis businesses as data hackers are known to target customer’s personal information. We have seen this play out in Washington State many times.  In addition to the seed-to-sale information, any kind of ‘trade-secret’ stored on company computers may be vulnerable as well to cyber threats.  Cyber policies for cannabis businesses can be customized to cover a wide range of risks to protect this sensitive information.

Directors and Officers

As cannabis in an emerging industry, robust directors and officers (D&O) insurance is recommended to shield executives and board members against potential claims by disgruntled investors and others.  For those individuals looking to join the board of directors of a cannabis business, it is encouraged to review the company’s D&O policy to ensure the insurance is sufficient and has a high policy limit. 

Crop Insurance

Indoor growers may be able to secure insurance over their crop.  Coverage includes crop failure due to bugs, natural disaster and mold.  We have not seen the same coverage for outdoor producers but it may be coming.


How JDSA Can Help

These are just some of the types of insurance cannabis owners should consider.  There may be additional insurance needs depending on the type of cannabis establishment you operate.  If you have questions or need advice regarding this—or maintaining a compliant cannabis business—contact me, Lindsey Weidenbach, at JDSA Law for assistance.

Technology + Agriculture = Success
 By Colleen M. Frei

By Colleen M. Frei

Technology is everywhere.  For most, it's the method utilized to consume news, plan vacations, and communicate with friends and family.  But when you enjoy a glass of delicious Washington wine, or take a bite of a crisp Washington apple, do you ever stop to consider the technology needed to fulfill that experience?

Technology is increasingly important—and necessary—for how agricultural businesses evolve and thrive.  Consider these recent examples:

In an article published by Bloomberg, establishing a winery goes beyond purchasing a vineyard and simply growing grapes.  Larry Stone, a master sommelier and former Napa Valley resident, uses technology and innovation in his custom-made tanks to integrate lines that allow for both heating and cooling. Plus, his chardonnay room has a separate heating system to accommodate the colder Oregon nights.  This winery also utilizes a unique European press device that controls the intensity of the grape press in order to produce the desired result.  Technology is something this winery is proud to incorporate into its business.
Equally impressive is a new technology being used at Iowa State University (ISU) to study the effect of water on plants.  In an article published by Science Daily, scientists at ISU have developed graphene-based, sensors-on-tape that can be attached to plants to provide data to researchers and farmers about water use in crops.  This technology opens doors for scientists and farms to begin breeding plants with better water efficiency, and paves the way for further expansion of technology sensors to monitor the environment and test crops for diseases or pesticides.

These examples highlight some different ways innovation and technology is shaping the way the agriculture industry is doing business.  As always, the attorneys at JDSA Law strive to remain current with the latest news and technology, and assist our clients in this dynamic and exciting agricultural landscape. 

Stay current with us, about the changes that may impact you. Check out our podcast and blog for more news and legal topics.

Washington’s "Ban-the-Box" Law

Effective: June 7, 2018


 By Kellen Norwood, Attorney

By Kellen Norwood, Attorney

Employers in the State of Washington may be restricted from asking about a job applicant’s arrest or criminal background history during the initial stages of the job application process.  On March 13, 2018, Washington Governor Jay Inslee signed into law the Washington Fair Chance Act (WFCA), otherwise known as “ban the box” legislation. 

The WFCA prevents most employers from asking about an applicant’s criminal status until the employer determined the applicant is “otherwise qualified” for the position. After the employer makes this initial decision, that the applicant is “otherwise qualified,” then the employer may ask questions about the applicant’s criminal background history. 

The WFCA outlines relevant definitions for covered employers as follows: 

  • Criminal record” includes any record about a citation or arrest for criminal conduct, including records relating to probable cause to arrest, and includes any record about a criminal or juvenile case filed with any court, whether or not the case resulted in a finding of guilt.
     
  • Employer” includes public agencies, private individuals, businesses and corporations, contractors, temporary staffing agencies, training and apprenticeship programs, and job placement, referral, and employment agencies.
     
  • Otherwise qualified” means that the applicant meets the basic criteria for the position as set out in the advertisement or job description without consideration of a criminal record.

The WFCA Requirements –

The General Rules

Under the new WFCA laws, almost all covered employers in the State of Washington will be prohibited from:

Advertisements:
An employer cannot advertise openings in a way that excludes people with arrest or conviction records from applying for a job opening with their companies.  For example, employers cannot use any job publications or advertisements that contain the words “no felons,” “no criminal background,” or other words or phrases that otherwise convey similar messages;

Prescreening of Job Applications:
ntil after the employer has initially determined the applicant is otherwise qualified for the position, an employer cannot:

  • [Job Application] include any question about arrest or criminal history in an employment application; or,
  • [Interviews] ask, either orally or in writing, about the job applicant’s arrest or criminal history; or,
  • [Criminal Background Checks] receive information through a criminal history background check; or,
  • [Other] otherwise obtain information about an applicant’s arrest or conviction record.
  • [Disqualifiers] Have any automatic disqualifiers or categorically disqualify a job applicant based on a criminal record; or,
  • [Reject an Applicant for Failure to Disclose] Reject or disqualify a job applicant for failure to disclose an arrest or criminal record.

Exceptions to The General Rule

The Ban-the-Box WFCA laws do not apply to:

  • An employer who wants to hire a person who will or may have unsupervised access to children under the age of 18 years or a vulnerable person, as defined by Washington law;
     
  • An employer (including a financial institution), who is expressly permitted or required under any federal or state law to inquire into, consider, or rely on information about an applicant’s criminal record for employment purposes;
     
  • Various law enforcement agencies or criminal justice agencies;
     
  • An employer who seeks a non-employee volunteer; or
     
  • An entity required to comply with the rules or regulations of a self-regulatory organization as defined by the Securities Exchange Act.

Note: The WFCA is not intended to interfere with or diminish any collective bargaining agreements in unionized workplaces.


What If You Violate the WFCA?

First, the WFCA does not provide a private cause of action for job applicants against a potential employer who feels the potential employer may have violated the WFCA.  The WFCA provides that the State of Washington Attorney General’s Office (AGO) is granted authority to investigate possible violations of the WFCA.  The AGO has the power to assess fines, penalties, costs, and attorneys’ fees. The maximum penalties may include:

  • A notice of violation for the first violation;
  • A fine of $750 for the second violation; and,
  • A fine of $1,000 for each subsequent violation.

The WFCA and Local Governments

The WFCA applies to the State of Washington.  However, the WFCA does not preempt local governments or municipalities located within the State of Washington from enforcing their own ban-the-box ordinances.  

For example, there are currently two cities – Seattle and Spokane – that already have similar ordinances on the books.  Seattle passed the Fair Chance Employment Ordinance with similar laws to the WFCA.  Spokane passed a similar law to the WFCA, the Fair Chance Hiring Act.


How Does the WFCA Apply to You?

What should you do before the WFCA becomes effective as of June 7, 2018?  First, please note, this is a new law (outside of the cities of Seattle and Spokane).  As such, the courts in the State of Washington have not had the opportunity to interpret the law, or provide guidance on how it will be enforced or applied to employers. 

At a minimum, most employers can no longer ask about a job applicant’s arrest or criminal history until he/she has determined that the applicant is otherwise qualified for the position.  The WFCA does not expressly outline the steps an employer must follow after the employer has made this determination on the job applicant’s status. 

As a covered employer, you should, at a minimum, take the following steps now: 

  • Fulfill your obligations under the Fair Credit Reporting Act if they plan to obtain criminal history reports from third-party vendors.  
  • Follow best practices throughout the hiring process. 
    • Engage in an individualized assessment of any disclosed arrests or criminal history prior to making any employment decisions. 
    • Review and revise, as needed:
      • Your hiring practices,
      • Job application postings and advertisements,
      • Job application forms, checklists, policies, and procedures,
      • Interview questions and forms,
    • Finally, all covered employers should provide periodic training updates to its human resource and other employees involved in the job posting, screening, and interview process.

Kellen Norwood is an attorney with JDSA Law.

[Content provided in this article should be used for informational purposes only and is not intended to be a substitute for professional advice. Always seek the advice of a relevant professional with any questions about any legal decision you are seeking to make.]

 

URGENT UPDATE: Oregon Medical Marijuana Growers

Prepare for Tracking By July 1


These marijuana growers in Oregon must begin tracking their cannabis from seed-to-sale. 

In a recent memo distributed by the Oregon Liquor Control Commission, medical marijuana growers in Oregon will be required to use the Oregon Cannabis Tracking System (CTS) starting July 1, 2018

This change in tracking, outlined in the Oregon Senate bill 1544, stipulates for all Oregon Medical Marijuana Program (OMMP) medical marijuana grow sites—with three or more patients—to begin using CTS tracking by the July 1 deadline.  Medical marijuana grow sites limited to two or fewer growers and two or fewer patients are exempt from using CTS.

More than 1800 licensees in Oregon’s Recreational Marijuana system are already using CTS which tracks marijuana and marijuana products from seed to sale.  Beginning in July, these marijuana growers must begin tracking their cannabis from seed-to-sale to ensure the marijuana they grow for medical marijuana patients is tracked and reported.  This requirement is most likely a response to Oregon’s documented issues with the black market, in tandem with Attorney General Jeff Sessions’ repeal of the Cole Memo.


How Do I Comply?

A series of information sessions and workshops are being offered to help growers registered with the OMMP begin the sign-up process to use CTS.  Grow sites required to use CTS can take the following steps to prepare for this change:

  1. Designate one grower at the grow site address as the grow site administrator (GSA)
     
  2. Consider attending the following outreach, workshop or informational sessions:
  • Community outreach session administered by the Oregon Healthy Authority (OHA) for registered medical growers to help understand reporting and tracking requirements for all grow sites.
     
  • Information session for registered medical marijuana growers, processors, and dispensaries on the requirements for using CTS.  These sessions are administered by the OHA and the Oregon Liquor Control Commission (OLCC).
     
  • Workshop for OMMP registrants explaining how to use CTS.

Additional Information

In addition to the change in tracking, the memo highlights the following:

  • GSAs will be allowed to sell up to 20 pounds of marijuana into the OLCC regulated recreational marijuana system in a 12 month period.
     
  • GSAs must provide proof of legal access to water before the marijuana can be sold into the OLCC market. This sell-in option applies to a grow site as a whole, so a grow site with four growers would only be allowed to sell a total of 20 pounds into the recreational market, not 80 pounds.
     
  • In July 2018, the OLCC will begin auditing OMMP grow sites, processors, and dispensaries subject to tracking in CTS.
     
  • Later in 2018, OLCC inspectors will begin visiting OMMP grow sites required to use CTS to verify CTS tracking information, check to make sure CTS is being used properly, and look for any other violations. However, because OHA regulates the OMMP program, OHA will determine any enforcement based on investigations conducted by OLCC.

For additional information or to learn about the informational sessions, visit the OMMP website. If you need assistance or advice, contact Attorney Lindsey Weidenbach, at JDSA Law.

STEREOLITHOGRAPHY and Intellectual Property

Additive Manufacturing to some – 3D Printing to the rest of us.

“Stereo, what?”

Stereolithography or SLA, is a technology used for the 3D printing of models, prototypes and other three-dimensional products.  It is also known as additive manufacturing because the production process involves adding layer upon layer of material with photopolymerization – the application of light to cause the layers of materials to link creating a solid, three-dimensional form. 

Research in this area began in the 1970s, and a patent on the process was granted to Chuck Hall in 1984.  While the early years of 3D printing were grounded in science and technology (and of no real interest or usefulness to the average person), the evolution of the process has changed the 3D printing landscape, making it into a more creative application.  Today, 3D printing is not only more readily accessible to the average person – it can also be great fun.


SLA in the Technical World:

In recent years SLA has evolved so that many different types of materials can be used in 3D printing. For example, SLA is commonly used in the medical field for making plastic molds for hearing aids, for building a custom fit ceramic crown in a dental office, or for anatomical models to be used by doctors for preoperative planning.  The company Invisalign© has been using the technology for years to custom mold retainers.  Similarly, other companies use SLA to create three-dimensional bone-replacement devices uniquely measured for a specific patient.

 

Likewise, automobile manufacturers can print replacement parts for cars as needed whether it is made from rubber, plastic or metal.  In fact, designer, Petr Chladek built an entire car through the use of 3D printing.  His “4ekolka” all-electric car is not only lightweight but more economical.

 The 4ekolka is an all-electric car made entirely through the use of 3D printing.

The 4ekolka is an all-electric car made entirely through the use of 3D printing.

 
 Custom designs and personalization such as a 3D thermoplastic skin

Custom designs and personalization such as a 3D thermoplastic skin

3D printing can be used for elements of a car’s bodywork to allow for custom designs and customer personalization such as in the form of a 3D thermoplastic skin.[1]

The advantages of SLA include the ability to produce products, as needed, reducing the need for storage space.  Also, there is less waste. Any material not used in the product can be reused.  With 3D printers becoming more locally available it is now easier than ever to have something printed locally versus having a product shipped to you. 

However, more technical 3D printing projects may require a CAD based software program to design instructions for the printer. For the rest of us, there are simple 3D design apps drawing the schematics for the product we design—which we can then print ourselves with a relatively inexpensive home printer—or sent to a 3D printing company such as Shapeways.[2]

SLA in the Creative World:

As the scope of materials used in 3D printing has expanded, and the printers themselves have evolved to manage more complicated printing projects, SLA has evolved into an artform – literally. 

Printers can use gold, silver, sandstone, acrylics, wax—even food products such as sugar and fresh ingredients—to create three-dimensional products including jewelry, shoes, clothing, and artwork.  Even the “wings” the Victoria’s Secret models use in their fashion shows are 3D printed.[3]

Examples:

3D jewelry and household items (source: Shapeways.com):

Footwear:

Adidas is launching its Futurecraft 4D shoe.[4]

Racing to compete in the 3D market, Nike is launching its Zoom Vaporfly Elite Flyprint.[5]

Designer Katrien Herdewyn has designed 3D printed high heels.[6]

Clothing:

Paris Fashion Week presents 3D printed clothing (left).[7]
And a Victoria’s Secret Model wearing 3D printed lingerie (right).[8]

3D Printed Edibles: 

SLA has even made its way to food. These are examples of using sugar and water compounds for 3D printed cakes.[9]

Games & Entertainment: 

SLA has an application in the games and entertainment industries such as a guitar[10], and chess[11].


BUT WAIT:  Is your fun or hobby breaking the law?

SLA can appeal to scientists and artists, foodies and fashionistas. The attraction to 3D printing may be the intricacy of writing computer code for 3D artwork or the excitement of seeing your design grow layer by layer into a tangible three-dimensional form.  A 3D printed product can be unique and complex, or simple and easily mass-produced.   Children love having their faces printed on the three-dimensional image of their favorite Disney ® character.[12]  Or Star Wars® fans might want their image printed onto a model of a Storm Trooper®.[13]  

But whenever we come up with great creative ideas and different ways to express ourselves, the creativity police – commonly known as Intellectual Property Lawyers – are always hovering in the background ready to dampen our fun.  And for good reason.

Intellectual property laws are designed to help protect our creations. 

Three-dimensional models can be protected by copyright law, which gives the designer the exclusive right to reproduce and sell his design.  Similarly, trademark law protects trademarks or brands such as Disney ®, Nike ® and others from being imprinted on unauthorized products.  The technology behind the SLA printers themselves may be protected by patent law.  And the code used to program a printer may be protected by trade secret law

An Unfortunate Truth:

Technology is always attractive to infringers – those wanting to make easy money by copying other peoples’ ideas. 

SLA is a particularly attractive target for infringers as the cost to set up business is becoming more affordable.  3D printing requires only a small space for a printer versus a larger manufacturing plant and warehouse. Plus, today’s smaller printers are more mobile and can easily be moved between locations to avoid detection.  SLA does not need the shipping and distribution channels that typical product manufacturing require. The program codes, design graphics, and other schematics can be readily sent over the Internet to a local 3D printing service for in-person pick up, or for delivery service.

The intellectual property owner’s ability to control their products’ creation and distribution can be difficult.  Particularly when the cyber-technological nature of SLA means the orders and sales of SLA products can traverse international borders, or can be communicated between computer devices –virtually undetected. 

Where ordinarily imported goods would be monitored by U.S. Border and Customs Protection to ensure goods coming into the U.S. are authentic and not counterfeit, that gatekeeping step might be erased when using SLA. 

A recent study estimates the global loss of revenue to intellectual property owners in 2018 alone through the use of SLA will be around one hundred billion dollars.[14]

A Cybersecurity Issue:

An important concern is that the cyber-technological nature of SLA may make it easily accessible to hackers.  Illegally altered SLA files can result in the manufacture of abnormal 3D images including malformed medical implants, or imperfectly manufactured automotive parts that could cause physical harm if used. 

Using cybersecurity to protect SLA is more important than ever—not only in the manufacturing environment—but also for general business and home use of 3D printing.

Here are three general rules to follow when creating, selling and buying SLA:

  • Creators should identify the work they consider proprietary; that they wouldn’t want anyone else to steal from them; and use intellectual property laws to protect those rights against infringers. 
  • Sellers should know the provenance of the product they are selling: Who manufactured it?  Was the manufacturer authorized to manufacture it?  Is the seller making accurate representations about the product he is selling – is it really an authentic automotive part? 
  • Buyers must be diligent about vetting the products they buy.  Is the model an authentic Disney ® princess or a cheap knockoff?

Final Thoughts:

As we acknowledge World Intellectual Property Day on April 26, 2018, let us all admire and respect the creative processes of others.

 
 Planet Earth  [15]

Planet Earth [15]

 

This year’s World Intellectual Property Day campaign celebrates the brilliance, ingenuity, curiosity and courage of the women who are driving change in our world and shaping our common future.[16]

If you should have questions or need legal assistance with your intellectual property, contact Laraine Burrell directly and read up on all the latest IP topics on the JDSA Blog.