Until recently, the United States did not recognize cannabis or products derived from it as being relevant to the medical field. See, e.g., Jan Wolfe, “ANALYSIS—Patents on pot? US lawsuit puts cannabis claims to the test,” CNBC, Nov. 29. 2018, at https://www.cnbc.com/2018/11/29/reuters-america-analysis-patents-on-pot-us-lawsuit-puts-cannabis-claims-to-the-test.html (last visited Dec. 6, 2018). However, marijuana is at least partially legal in many states, and the United States Patent and Trademark Office (PTO) has already issued thirty-nine patents for formulations that contain the name “marijuana” or “cannabis.” See id. This number is a marked increase from the last few years, when far fewer patents of this type were awarded. See id. Medical marijuana and cannabis-based patents have raised some difficult questions for the legal community. See id.
Patent attorneys may wish to pay close attention to recent developments pertaining to medically-recognized cannabis products to get a feel for how the judicial system will treat such matters. For example, in July, one company sued a competitor for “infringing its patent covering a liquid formulation with a high concentration of CBD, a non-psychoactive cannabis ingredient touted for its health benefits.” Id. This represents the first case of its type, but others are likely to follow as cannabis-based medical treatments gain acceptability.
Lawsuits concerning cannabis patents are complex for a number of reasons, perhaps primarily because of the decades of illegality of marijuana and its derivatives for human consumption or medical use. See, e.g., id. In typical intellectual property (IP) cases, one way that courts resolve such issues is to determine whether a “patent is overly broad or obvious in light of ‘prior art, the existing level of science or technology against which an invention’s novelty can be judged.’” Id.
Experts in the field have offered varying perspectives regarding how prior art might be evaluated in cannabis patent litigation. One company’s representative argues that “[g]iven the long history of experimentation with marijuana, patents claiming new formulations or methods of using the drug could have trouble withstanding legal challenges.” Id.
On the other hand, a cannabis researcher argues, “[O]ne factor that could help patent holders defend their products is the lack of documented previous research. Because marijuana has been illegal, many of its uses have not been written about in the sort of scientific articles typically presented as prior art in patent cases.” Id.
In truth, a marijuana-based patent could not be tested when “cannabis was broadly illegal,” and even businesses that might have wished to challenge a competitor on intellectual property grounds would understandably feel reluctant to “call attention to potentially illegal activities.” Id. Now that many states have recognized the medical value of products derived from cannabis, new markets are opening, and patent challenges are inevitable. See, e.g., id.
As one commentator noted, “[I]n a climate of increasing tolerance[,] the number of marijuana formulas and extracts being brought to market has exploded, opening the door to challenges from patent-holders. The worldwide cannabis industry is expected to reach $75 billion by 2030,…making it one of the world’s fastest growing industries.” Id.
CBD, a cannabis compound that can be found in many American health and wellness stores, is at the heart of the current patent litigation. See id. One company claims its CBD formulation is unique, while others argue that “similar formulations have been used for decades.” Id.
How this and other cases get resolved may be largely decided by expert witnesses, who can discuss the scientific properties of various cannabis formulations and explain whether they constitute unique intellectual property or not.
Although the United States Drug Enforcement Agency (DEA) still views CBD and related products as illegal, federal attorneys do not plan to prosecute such cases or pursue criminal action against manufacturers or sellers. See id. Given the receptiveness of many states to full or partial legalization, the case filed over cannabis patents in July may be the first of many.
Unfortunately, “experts say the marijuana industry is largely ill-prepared for patent litigation and battles over licensing fees that may lie ahead.” Id. Attorneys who deal with IP cases should follow the developments in this industry carefully and prepare their own strategies in the event that clients seek help for such issues. Expert witnesses may hold the key in cannabis patent litigation. Their guidance is particularly important because of a lack of legal precedents, and the stakes involve large amounts of money and potentially lucrative market shares. Companies involved in manufacturing cannabis products should consult and retain experts in the field to better assist their enterprises.