With the continued growth and normalization of the cannabis industry, patent protection of cannabis innovations remains a key consideration for those working in the space. At a high level, patents are granted by the U.S. Patent and Trademark Office (USPTO) on new, useful, and nonobvious inventions and create the right to exclude others from making, using, and selling the invention in the United States. While the USPTO has been granting patents on cannabis-related inventions (including the plant itself) for years, the industry is just starting to see cannabis patents be enforced and challenged in judicial proceedings.
Although much uncertainty continues to surround how federal courts will handle canna-patent infringement lawsuits given that cannabis is still federally classified as a controlled substance, a canna-patent owner should be aware that a third party has at its disposal means to invalidate patents via post-grant proceedings before the USPTO’s Patent Trial and Appeal Board (PTAB). In particular, an inter partes review (IPR) proceeding is a mechanism by which a party (e.g., a competitor) can challenge a patent’s validity, provided they have not previously challenged the validity of the patent in a declaratory judgement action or been served with a complaint alleging infringement more than a year prior to the PTAB challenge. In essence, the third party (referred to as the “petitioner”), makes a case before the PTAB that the USPTO never should have issued the patent in the first place because it is not new or nonobvious in the face of other patents and printed publications (technical documents, trade papers, etc.) that published before the patent application was filed. If a petitioner is successful in invalidating one or more patent claims in an IPR proceeding, the scope of the canna-patent owner’s right to exclude others from practicing the patented invention may be reduced or entirely lost.
As an example, there is an IPR currently pending before the PTAB (IPR2017-00503) involving a patent related to treating seizures with cannabidiol (CBD) and owned by GW Pharmaceuticals plc (GW Pharma). GW Pharma, along with its U.S. subsidiary, Greenwich Biosciences, made history in the cannabis industry this past June by winning FDA approval of Epidiolex, the first drug containing an active ingredient derived from a cannabis plant (in this case, CBD). The company also has a large patent portfolio with many patents directed to treating diseases with cannabis-based formulations.
In the IPR, Insys Development Company Inc., a pharmaceutical corporation that focuses on cannabinoids, filed a petition on December 16, 2016, to cancel all thirteen claims of U.S. Patent No. 9,066,920 (“the ’920 patent,” entitled “Use of One or a Combination of Phyto-Cannabinoids in the Treatment of Epilepsy”) for obviousness based on three different combinations of several different references.
Claim 1 of the ’920 patent is directed to “[a] method of treating partial seizure comprising administering cannabidiol (CBD), to a patient wherein the CBD is present in an amount which provides a daily dose of at least 400 mg.” In its preliminary response, GW Pharma asserted a person of ordinary skill in the art at the time of invention would not have been motivated to increase the dosage of CBD taught by one of the primary prior art references and would not have had a reasonable expectation that higher CBD dosages would treat partial seizures.
Nevertheless, the PTAB instituted the IPR of the ’920 patent on July 7, 2017, finding that Insys had established a reasonable likelihood that it would prevail in showing claim 1 was unpatentable based on two of the three asserted combinations of references.
While many in the cannabis industry wait for the PTAB’s determination, the ’920 patent case raises some important implications for challenging and enforcing patents in the space.
First, although uncertainty about enforcement of canna-patents in U.S. federal courts remains, what does seem clear based on the PTAB’s institution of IPR2017-00503 is that IPR proceedings are at least one option for challenging cannabis patents. Likewise, this IPR indicates that other USPTO post-grant proceedings potentially could be utilized to challenge cannabis patents. Perhaps this is unsurprising given the USPTO’s historic willingness to examine and grant cannabis patents despite the plant’s Schedule I classification.
“If a canna-patent can withstand an inter partes review challenge, the value created for the patent’s owner is tremendous”
Second, identifying publications that can be used to challenge patents directed to the chemical makeup of cannabis plants may prove difficult, as such publications do not seem readily available and would be required to support an IPR. But with regard to patents directed to methods of treatment using cannabinoids (e.g., the ’920 patent), there are likely more research-based scientific publications and patents available to third parties to initiate such challenges. Therefore, owners of canna-patents directed to plant-related inventions (cannabinoid formulations, treatment methods, etc.) may be more susceptible to IPR challenges than owners of patents covering the cannabis plant itself.
Third, if viewed myopically, this case presents what may be perceived as a potential disadvantage to canna-patent owners and applicants in the current legal landscape. Specifically, if U.S. courts were to begin declining to hear cannabis patent infringement cases, then an unfortunate circumstance may arise where cannabis patents are challenged and invalidated via an IPR without the owner’s ability ever to enforce them in U.S. courts.
On this point, however, innovators should not be deterred from filing canna-patent applications, because the benefits of seeking patent protection almost certainly outweigh any theoretical disadvantages. Given the rapid growth of the industry, enforcing canna-patents may become less complicated as new cannabis products are allowed on the market. Take, for example, GW Pharma’s patents directed to Epidiolex. Following the FDA’s approval of the drug, the DEA accepted the Department of Health and Human Services’ finding that Epidiolex’s formulation has “a very low potential for abuse,” and transferred Epidiolex from a Schedule I controlled substance to a Schedule V drug, the lowest restrictive class. (See 83 Fed. Reg. 48,950, Sept. 28, 2018.) Post-rescheduling, Epidiolex is available by prescription and GW Pharma should be able to enforce related patents in U.S. courts.
If a canna-patent can withstand an IPR challenge, the value created for the owner is tremendous. Surviving an IPR strengthens the patent by demonstrating its validity over the challenging references and also shows the canna-patent owner’s commitment to protecting their intellectual property, which can add leverage value in patent licensing negotiations.
The very existence of the PTAB’s willingness to engage in cannabis-patent IPRs further confirms for everyone participating in the canna-patent process (judges, attorneys, examiners, inventors, etc.) that property rights bestowed in canna-patents are no different from those created in any other patent. In turn, canna-patents, like the cannabis industry as a whole, will continue to normalize in the American judiciary (as cannabis has in the American psyche)—and, hopefully, some of the recurring challenges will be alleviated along the way.
Despite these developments, the takeaway for canna-patent owners and applicants seeking to protect their innovations should remain largely unchanged. Obtaining canna-patents is still highly valuable for companies in this industry and will serve as irreplaceable stakeholders in an ever-normalizing and expanding market.
Nicole E. Grimm is a partner with McDonnell Boehnen Hulbert & Berghoff LLP (MBHB). George “Trey” Lyons III and Brett W. Scott are associates with MBHB. With offices in Illinois, California, and North Carolina, MBHB provides comprehensive legal services for intellectual property owners.