In the case between United Cannabis Corp. (UCANN) and Pure Hemp Collective (Pure Hemp), filed in the US District Court for the District of Colorado last summer, Judge William Martinez denied the Defense’s motion for partial summary judgement based on unpatentable subject matter under the Alice test. The case is set to move forward to a jury trial in this landmark marijuana patent suit.
The case is being watched closely by cannabis industry attorneys and companies because UCANN’s patent, issued on August 15, 2017, is related to a cannabinoid-based medical product formula. If upheld as intellectual property, formulations such as UCANN’s have the potential to greatly increase the value and competitive advantage of cannabis companies. Pure Hemp argued that UCANN’s claims were invalid, and their motion raised a patentability challenge to the validity of the asserted claims. Essentially, Pure Hemp’s argument was that the claims in UCANN’s patent were not patent protectible.
UCANN’s patent claims were tested against the patentability framework established in Alice Corp. Pty. V. CLS Bank Int’l to determine whether the claims covered laws of nature, natural phenomena, or abstract ideas. Judge Martinez ultimately concluded that, even though cannabinoids in nature can take the form of a resin, the case didn’t involve unpatentable subject matter as the UCANN patent specified threshold concentrations of cannabinoids and related chemicals, therefore, UCANN’s claims were not merely reiterations of nature, but rather their own creation.
For this case alone, the damages could be substantial, depending on Pure Hemp’s sales. Other companies should take note and consider their potential exposure to future IP related issues that could potentially lead to litigation. What other IP issues could the cannabis industry face as courts begin to rule on issues like this? The elephant in the room is most certainly the legalization of Federal cannabis related trademarks, and the subsequent litigations that are bound to follow. Other issues include hemp or CBD related trademarks, cannabis/hemp strain patents, and future USPTO challenges that will come as the market continues to grow.
CONSOR recently wrote a case study regarding the importance of licensing and valuation of trademarks and brand names within the cannabis industry. The case study can be found here.