July/29/2019

Patent litigation has for long been common in the world of technology, but has begun expanding into the cannabis field. The first of its kind happened last summer when United Cannabis Corporation (UNCANN) sued the Pure Hemp Collective Inc. for patent infringement.

UCANN is a publicly-traded biotechnology company with its headquarters in Golden, Colo. The company specializes in developing, distributing, licensing, and selling medical marijuana products in the U.S. and Australian markets. On the other hand, Pure Hemp Collective is a privately-held company based in Conifer, Colo. That manufactures and retails marijuana-based wellness products on the internet and through its distributors across the United States.

The case highlights the rising competition between cannabis-based companies and the ways by which investors are trying to gain an edge over their rivals. This case is a reminder that cannabis companies too ought to be mindful since productions methods, technologies, business processes, logos, and product packaging are subject to legal protection, implying that they may also be subjected to enforcement efforts like litigation. As laws surrounding cannabis production and sale begin to relax, companies are likely to be more willing and eager to enforce their intellectual property rights more than they did before.

Although the patent case at its early stages, the continuing proliferation of concentrated marijuana products and producers is a clear indication that the ramifications of this case could go beyond the spat between these two companies.

The sale of products with 95% cannabis extract is now growing and spreading throughout the country.

Besides, these extracts are the intermediate used to make an array of consumer products raging from edibles like sodas and candies to wellness products such as salves and tinctures. Should this patent be upheld, it would potentially get infringed by a section of the cannabis industry and make sellers and producers vulnerable to infringement suits.

what Happened?

UNCANN sued Pure Hemp on July 30, 2018, alleging that Vina Bell products by Pure Hemp infringe UNCANN’s 9,730,911 patent (the 911 patent). On this lawsuit, the 911 patent basically covers any liquid CBD formulation with at least 95% total cannabinoids that have one or more flavonoid or terpenes. In the lawsuit, UNCANN claims that the product line of Pure Hemp includes an array of ingestible and topical cannabis preparations with CBD concentrations that exceed 95%.

Pure Hemp made an early attempt on November 29, 2018, to dispose the case by filling a motion for partial summary judgement, In this motion, Pure Hemp argued that the 911 patent is not valid since the claims that define the patent’s scope of protection are precisely directed to “natural phenomena” namely terpenes and cannabinoids, which are found natural in the marijuana plant.

On April 17 this year, the court denied the motion by Pure Hemp. The court found that Pure Hemp failed at showing a liquefied version of cannabinoids and linked chemicals as a natural phenomenon at the concentrations specified in the ‘911 patent. Hence, the court held that the 911 patent was eligible.

The significance of the court’s patent decision is two-fold. If the court had ruled that cannabis extracts were patent-ineligible, the case would be over and the patent done away with. Such a ruling could also tamper with any future efforts of patent enforcement in the cannabis space. On the other hand, there are high changes of valid cannabis extract patents in future since the court found that cannabis extracts are not patent-ineligible. This is great news for cannabis industry players who invest in technologies, formulations, and treatment regimens. Hence, companies may want to explore if they have patent-able subject matter in their businesses and pursue patent protection.