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Cannabis Patents – The Elephant in the Room?

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.

Kevin Wimberly Presents to the OCBA IP Committee

October 4, 2016—With the pending Florida Constitutional Amendment on the November Ballot regarding medical marijuana, Kevin Wimberly provided a CLE-credit presentation entitled Medical Marijuana & Intellectual Property in Florida. Kevin discussed distinctions between Florida trademarks and federal trademarks while also providing examples and strategies for obtaining a medical marijuana trademark should the constitutional amendment pass. He also addressed marijuana patent issues and how local government regulations may affect medical marijuana dispensaries.

BWSM’s IP Series at Florida Institute of Technology Continues

September 26, 2016—Fred Romano and John DeAngelis are scheduled to present another in a series of intellectual property law luncheon seminars at Florida Institute of Technology on October 11, 2016. All seminars in this series are open to the public at a minimal cost to cover lunch for the participant. At the October seminar they will discuss commercial transactions, especially as related to start-up and new businesses. Previous seminars in this series covered other aspects of intellectual property, including patents, copyrights and trademarks. For further information or to register for the seminar please contact Fred or John through our website or Mary Tabeling at Florida Tech at mtabeling@fit.edu or 321-674-8382. The seminars will continue monthly through June 2017.

Attorney Wimberly Guest Lectures at Barry University

September 21, 2016—Kevin Wimberly guest lectured during the Copyright Law class at Barry University’s School of Law. Kevin’s lecture used several real world case examples to teach the students about certain copyright issues, including the registration precondition to filing suit, the Digital Millennium Copyright Act (“DMCA”), preliminary injunctions, and the way that copyright prosecution intersects with copyright litigation.

BWSM Presents Trade Secrets Presentation to the Association of Corporate Counsel

September 14, 2016—BWSM attorneys Terry Sanks, Robert Wolter, Amber Davis and Fred Romano provided a multifaceted presentation to members of the Association of Corporate Counsel entitled “Can You Keep a Secret? Considerations When Protecting Trade Secrets.” After a thought provoking overview of why trade secrets are so important in today’s business economy, a detailed review of the Florida Uniform Trade Secrets Act followed. The recently enacted Defend Trade Secrets Acts of 2016 was then discussed which was followed by a detailed analysis of restrictive covenants in Florida. The presentation concluded with a review of recommended best practices for in-house attorneys.

BWSM Attorneys Play Key Role in the OCBA IP Committee for 2016-2017

September 10, 2016—After a year hiatus, BWSM is again leading the Orange County Bar Association’s Intellectual Property Committee. Shanti Hill is Chair of the Committee for 2016-2017, and Erica Cipparone is Co-Chair. In addition to her role as Chair, Shanti kicked off the committee meetings this term with a presentation entitled “Copyright Litigation Post-Petrella v. MGM: Special Issues with Old Infringements.” Kevin Wimberly is scheduled to provide a presentation entitled “How Florida’s Medical Marijuana Vote Might Affect IP” on October 4, 2016. Then, as part of a three-hour Continuing Legal Education program on November 4, 2016, Terry Sanks is providing a presentation on “Recent Trade Secrets Protection Developments and Practitioners’ Tips: What is the Defend Trade Secrets Act of 2016? How Does It Vary from the Florida Uniform Trade Secrets Act?”

Best Lawyers®Recognizes Attorneys Beusse, McLeod and Sanks

August 15, 2016—Beusse Wolter Sanks & Maire, PLLC is proud to announce that Jim Beusse, Christine McLeod and Terry Sanks have been selected by their peers for inclusion in the 2017 edition of The Best Lawyers in America©. The categories in which each of these attorneys were chosen include:
Jim Beusse: Patent Law
                      Trademark Law
                      Patent Litigation
Christine McLeod: Patent Law
Terry Sanks: Patent Law
                      Trademark Law
                      Copyright Law
Since it was first published in 1983, Best Lawyers® has become universally regarded as the definitive guide to legal excellence. Best Lawyers® lists are compiled based on an exhaustive peer-review evaluation. Over 83,000 leading attorneys globally are eligible to vote, and we have received more than 13 million votes to date on the legal abilities of other lawyers based on their specific practice areas around the world. For the 2017 Edition of The Best Lawyers® 7.3 million votes were analyzed, which resulted in almost 55,000 leading lawyers being included in the new edition. Lawyers are not required or allowed to pay a fee to be listed; therefore inclusion in Best Lawyers® is considered a singular honor. Corporate Counsel magazine has called Best Lawyers “the most respected referral list of attorneys in practice.”

Several BWSM Attorneys Recognized by Super Lawyers Magazine

June 9, 2016—Super Lawyers magazine recently published the 2016 edition of its magazine and several BWSM attorneys were included. Terry Sanks and Jim Beusse were recognized as Super Lawyers. Amber Davis and Kevin Wimberly were recognized as Rising Starts. Each year, no more than five percent of the lawyers in Florida are selected by the research team at Super Lawyers to receive this honor. With respect to Rising Stars, no more than 2.5 percent of lawyers in Florida are selected to receive this honor.
Super Lawyers, a Thomson Reuters business, is a rating service of outstanding lawyers from more than 70 practice areas who have attained a high degree of peer recognition and professional achievement. The annual selections are made using a patented multiphase process that includes a statewide survey of lawyers, an independent research evaluation of candidates and peer reviews by practice area. The result is a credible, comprehensive and diverse listing of exceptional attorneys.