Monthly Archives: August 2018

Cannabis Patents – The Elephant in the Room?

By Kevin Wimberly*

I write a lot about trademark issues within the cannabis industry, but there is another aspect of intellectual property that I believe will have a greater impact on the industry than even brand/trademark disputes, and that is patent infringement.
Cannabis-related patents have been around for years, but we’re just starting to see those patents being challenged and asserted. Two recent examples are illustrative of what I believe will become more and more commonplace in the very near future.

Case 1: Insys Development Co. v. GW Pharma Ltd.
This case is actually an “inter partes review” (or “IPR”) before the United States Patent and Trademark Office’s Patent Trial and Appeal Board (“PTAB”). In a nutshell, the IPR process allows a party to challenge the validity of another party’s patent prior to any claims of infringement. The argument is that the patent never should have been issued because the invention was already known or was obvious before the application was filed.
GW Pharma owns U.S. Patent No. 9,066,920 for “Use of one or a combination of phyto-cannabinoids in the treatment of epilepsy”. Claim 1 of the ‘920 Patent is simply this:

A method of treating partial seizure comprising administering cannabidiol (CBD), to a patient wherein the CBD is present in an amount which provides a daily dose of at least 400 mg.

Thus, if your CBD product is used to treat partial seizures and the treatment method includes CBD “in an amount which provides a daily dose of at least 400mg” then you arguably infringe the patent.

Insys filed an IPR petition to cancel the ‘920 Patent based on “prior art” (i.e. relevant evidence) which Insys believes shows that the invention in the patent was already known or was otherwise “obvious” in light of other prior art that existed prior to the filing of GW Pharma’s application. The IPR process (and patent law in general) is very complex and beyond the scope of this post.

One reason this IPR is so important is because the claims in the patent are fairly broad and could implicate many, many products that are already being marketed (albeit perhaps without the claims of treating epilepsy and seizures, which is part of what complicates these cannabis-patent issues). So, just how easy is it to challenge a patent like this via an IPR? Well, you’ll need over $30,000 just in filing fees to the USPTO if your petition is accepted by the USPTO and the proceeding is instituted ($15,000 just to file the petition, and another $15,500 if the USPTO “takes the case” and starts the review process). You read that correctly – over $30,000 just in government filing fees to get started. That does not include the attorneys’ fees that Insys (and GW Pharma) are paying, which I conservatively estimate are already in the hundreds of thousands of dollars. This is all to invalidate a single cannabis-related patent.
This is complicated litigation that few businesses can afford despite the fact that some of these patents affect the very ability of such businesses to exist.

There are many supplemental procedural issues involved in this case, but I expect a decision regarding the ‘920 Patent’s validity will be reached within the next couple of months.

Case 2: United Cannabis Corporation v. Pure Hemp Collective, Inc.
This case is different than the above IPR because this is a “classic” patent infringement case that is being brought within the United States District Court for the District of Colorado. Whereas Insys brought an IPR at the USPTO to try and invalidate GW Pharma’s patent prior to GW Pharma asserting the patent against Insys, here, United Cannabis Corporation owns a patent and is alleging that Pure Hemp Collective’s products infringe the patent. The similarity to the IPR is that it is typical practice for the defendant in a patent infringement case to defend against the infringement by counterclaiming that the patent is invalid. Thus, the Colorado court will likely address the validity of the patent should the case proceed.

The patent at issue in this case is U.S. Patent No. 9,730,911 for “Cannabis extracts and methods of preparing and using same.” Claim 1 is simply:

A liquid cannabinoid formulation, wherein at least 95% of the total cannabinoids is tetrahydrocannabinolic acid (THCa).

The case was just filed early August 2018, so it’s too early to see how Pure Hemp Collective intends to respond. It is a pretty typical example of the type of a patent infringement complaint which I predict we will see more and more of in the very near future as cannabis-patent owners start asserting their patents.

In sum, I expect to see more patent friction within the cannabis industry, and I also expect the media attention to increase as the gravity of cannabis-related patents becomes more well-known. There are already “patent busting” projects out there related to cannabis-patents, and I would not be surprised to see an increased focus on those efforts.

* This article, in its entirety, was first published on Kevin’s personal blog, www.floridaiptrends.com.