Patents on the pot? US lawsuit puts cannabis claims to the test

(Reuters) – In October, the US government released Axim Biotechnologies Inc. (AXIM.PK) a patent for a cannabis-based suppository for treating irritable bowel syndrome.

The British company GW Pharmaceuticals Plc (GWPRF.PK), which recently put on the market a marijuana derivative drug for the treatment of epilepsy, is now seeking to obtain patent protection for another drug intended to treat eczema.

As marijuana is now fully legal in Canada and at least partially legalized in most US states, companies are eager to patent new formulations of secular botany. This year, the US Patent and Trademark Office issued 39 patents containing the words cannabis or marijuana in their abstracts, compared with 29 in 2017 and 14 in 2016.

(Graphic: tmsnrt.rs/2Ri9sON)

It remains to be seen how resistant patents are in the courts. If this is the case, a handful of companies might be able to charge license fees from the rest of the industry.

The first American case is being processed in the courts. In a lawsuit in July, United Cannabis Corp (Colorado)CNAB.PK), accused Pure Hemp Collective Inc of infringing its patent covering a liquid formulation with a high concentration of CBD, a non-psychoactive cannabis ingredient touted for its health benefits.

According to the experts, one of the main problems in this and other cases is to determine whether the patent is excessively broad or obvious in the light of "the state of the art", the current level of science or the technology against which the novelty of an invention can be judged.

Given the long experience of experimenting on marijuana, patents claiming new formulations or methods of using the drug could encounter legal difficulties, said John Stewart, a member of the board of directors. from the Canadian cannabis company Emblem Corp.

Nevertheless, the lack of previous documented research could help patent holders defend their products. Since marijuana is illegal, many of its uses have not been described in the type of scientific articles generally presented as part of the state of the art in patent cases.

"Due to 80 years of prohibition, there is a massive lack of prior cannabis literature for cannabis," said Beth Schechter, executive director of the Open Cannabis Project, an organization with a goal nonprofit that opposes patents on cannabis. "The popular knowledge and information that is clear to the industry might not be seen or taken into account by the patent office."

OBVIOUS OR INVENTIVE?

Marijuana-based patents could never really be put to the test until cannabis was largely illegal. Even though companies had potential reasons to challenge a competitor's product for patent infringement, they were often reluctant to draw attention to potentially criminal activities.

But in a climate of increasing tolerance, the number of formulas and marijuana extracts put on the market has exploded, paving the way for the challenges of patent holders. According to Cowen & Co, the global cannabis industry is expected to reach $ 75 billion by 2030, making it one of the fastest growing industries in the world.

The patent covering its CBD formulation is at the center of the United Cannabis business, which has become a popular health supplement and is widely available in American coffee shops and wellness shops.

Although the US Drug Enforcement Agency believes that CBD-based products are illegal, federal prosecutors do not prosecute vendors.

The United Cannabis patent covering a highly concentrated formulation of CBD could potentially apply to most of the CBD products currently on the market, said Neil Juneja, a patent attorney in Seattle.

Jesus Vazquez, United Cannabis's general counsel, declined the invitation to an interview but referred to an article published on his blog in August in which he defended the company's patented technology as "new and inventive" .

Others say similar formulations have been used for decades.

"There are a lot of people who know the facts about cannabis extracts and biochemistry who are just mad at this patent," said Dale Hunt, a California patent attorney.

Donnie Emmi, a lawyer for Pure Hemp, said he believed the company had a good chance of canceling the United Cannabis patent. In a court file, Pure Hemp said that highly concentrated liquid CBD formulations were "ubiquitous" and "not invented in this millennium."

INDUSTRY MUST "WAKE UP"

Still in their infancy, experts say the marijuana industry is largely unprepared for patent litigation and disputes over license fees that may be charged to it.

"The cannabis industry needs to be aware of this reality," said Reggie Gaudino, Vice President of Cannabis Research Company Steep Hill Inc.

According to analysts and investors, companies have been slow to recognize the threat, in part because the patents are foreign to the laissez-faire, open-source culture that has always surrounded marijuana.

"This industry is traditionally made up of people who really believe in this cause, this plant and its health benefits," said Kris Krane, a cannabis industry consultant.

"Most of the new players that are involved now are engaging in a business perspective and they will see patents as a commercial factor."