The Legal Landscape of CBD Product Patents

The Legal Landscape of CBD Product Patents

July 2, 2019

While CBD products may be flying off shelves, CBD product patents exist in an interesting legal grey area. Learn more with myCBD.org.

Why The Law Is Hazy For CBD Patent Eligibility

Cannabis-related U.S. patents have been issued since at least the mid-1990s. In the 2018 case, United Cannabis Corp. v. Pure Hemp Collective Inc. a biotechnology company sued a vendor of cannabis extracts for patent infringement. One of the patent’s claims is for a concentrated liquid formulation of tetrahydrocannabinol (“THC”). However, the actual preparation of the formulation would be a violation of the Controlled Substances Act.

In United Cannabis Corp. v. Pure Hemp Collective, Inc., Judge Martinez of the U.S. District Court for the District of Colorado determined that UCANN’s CBD patent was not invalid under 35 USC § 101. The court reached its conclusion, in an analysis that draws a line between products of nature and nature-based products. The decision was rendered on Pure Hemp’s motion for partial summary judgment, and so may not be immediately appealable.

The CBD Patent At Issue

The patent at issue was UCANN’s U.S. Patent No. 9,730,911, entitled “Cannabis extracts and methods of preparing and using same.” The court generally considered all asserted claims (claims 10, 12, 14, 20–22, 25, 27, 28, 31, and 33). According to Claim 10:

10. A liquid cannabinoid formulation, wherein at least 95% of the total cannabinoids is cannabidiol (CBD).

As summarized by the district court, “the obvious thrust of the patent is a supposedly new means by which humans can consume cannabinoids so that those cannabinoids can produce the pharmacological effects they are known to have, thus  (hopefully) treating or ameliorating various diseases and symptoms.

The Hazy State Of The Law

In their review of the case, the district court reviewed Supreme Court decisions from Funk Brothers to Chakrabartyto Mayo, and the Federal Circuit decision in Ariosa, and concluded:

As the foregoing summary of case law suggests, the proper application of the Supreme Court’s Alice standard is an evolving and sometimes hazy area of law. Deciding whether a patent claim is “directed to” a law of nature is not as straightforward as the Supreme Court makes it sound in Alice itself. Moreover, the Federal Circuit itself has remarked on the difficulty, at times, of distinguishing the first Alice inquiry from the second.

What Are The Claims Directed To?

According to the analytical framework used by Judge Martinez, the answer of the patents legality was dependent whether the claimed are “directed to” a judicial exception. Pure Hemp argued that the claims were “directed to” the natural products (e.g., the “cannabinoids, terpenes, and flavonoids” recited in the claims), while UCANN argued that “the claims are not directed to laws of nature or natural phenomena because they claim human-modified liquid formulations that require converting solid cannabinoids into a different state with markedly different  physiological characteristics.”

To that end, the district court made the following findings favorable to UCANN:

  • Pure Hemp has failed to establish beyond genuine dispute that a liquefied version of cannabinoids and related chemicals at the concentrations specified in the 911 Patent is anything like a natural phenomenon.
  • [T]he 911 Patent specifies threshold concentrations of cannabinoids and related chemicals. Pure Hemp nowhere claims that these precise concentrations, or anything close to them, occur in liquid form in nature

Thus, the court determined that the claims are not “directed to” a natural product, and are not invalid under 35 USC § 101.

Not Just Blowing Smoke

All joking aside, this decision illustrates how a practical reading of the claims can support a finding that a “nature-based product” is not a patent ineligible product of nature. Instead of focusing on the gist of the invention or individual compounds present in the claimed compositions, the court considered the claimed compositions as a whole.

Interestingly, the USPTO Examiner originally rejected the claims under 35 USC § 101, but withdrew the rejection after the Applicant argued that the liquid state of the claimed compositions distinguish them from naturally occurring cannabinoids which exist in a resinous (solid) form. The Applicant cited Example 30, Claim 4, of the USPTO’s 2016 Subject Matter Eligibility Examples as supporting eligibility.

Are Cannabis Patents Possible?

Unlike in the case of trademarks, patentability of cannabis-related products and processes is much more clear-cut. The USPTO routinely grants utility patents to cannabis and cannabis-related inventions, and has done so for decades. A search of the USPTO’s own database (patft.uspto.gov) reveals that, since the beginning of 2018, more than 120 U.S. Patents have issued with at least one claim containing the word “cannabis” or “cannabinoid.” The USPTO applies the same legal standard when reviewing utility patent applications related to cannabis, as it does to all other inventions. In short, a substance’s Schedule I classification is irrelevant to its patentability.

Further yet, it may surprise some that the U.S. Department of Health and Human Services (HHS) owns a patent for a cannabis-related invention. U.S. Patent No. 6,630,507 issued in 2003 and entitled “Cannabinoids as antioxidants and neuroprotectants,” was at one point internet-famous as legalization activists pointed to its ownership by the Federal Government as being at odds with the Drug Enforcement Administration (DEA)’s continued refusal to move cannabinoids from the Schedule 1 Classification. Specifically, the ‘507 Patent includes statements such as “Cannabinoids have been found to have antioxidant properties … This new found property makes cannabinoids useful in the treatment and prophylaxis of wide variety of [diseases].”  On the other hand, a Schedule I classification according to the DEA is for substances that have high potential for abuse and no approved medical use.

What Does this Case Mean for CBD and Cannabis Products?

While it is clear that the USPTO would, and does, issue utility patents directed to cannabis-related products and processes, the validity and enforceability landscape of such patents remain less clear.

The patent at issue in this case is UCANN’s U.S. Patent No. 9,730,911 for “cannabis extracts and methods of preparing and using same.” The ‘911 Patent contains 6 independent claims each directed to a liquid cannabinoid formulation wherein at least 95% of the total cannabinoid is a specific cannabinoid or combination of cannabinoid (tetrahydrocannabinolic acid (THCa) (claim 1), tetrahydrocannabinol (THC) (claim 5), CBD (claim 10), combination of THCa and cannabidiolic acid (CBDa) (claim 16), combination of THC and CBD (claim 20) and combination of CBD, cannabinol (CBN) and THC).

According to their Complaint, UCANN purchased and analyzed Pure Hemp’s Vina Bell 5000 mg product, which analysis revealed that it contains a formulation infringing one or more claims of the ‘911 Patent, in particular claim 10. More recently, Pure Hemp filed an Answer on November 5, 2018, also asserting counterclaims, and UCANN filed their Answer to the counterclaims on November 19, 2018.  As such, the initial pleading stage has been completed. Submission of briefs regarding claim construction was scheduled for June of 2019 and the case is still ongoing.

Keep Your Thumb on the Legal Future of Cannabis and CBD Products with myCBD.org

The UCANN suit may shed light on how infringement actions involving cannabis-related patents would be handled by the federal courts, as well as other questions involving validity and enforceability of such patents. Yet further, the claims of the ‘911 Patent have been widely criticized for being too broad in scope. Some have suggested that the lack of readily available prior art in this area due to the federally illegal status of the claimed substance may be to blame. If upheld by the court, UCANN and other patentees holding similarly broad patents could decide to assert their patents against many more cannabis businesses, spurring a flurry of similar patent infringement litigations. All of the foregoing could have far-reaching effects on this still-growing industry. Stay tuned for mycbd.org updates!

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