When most people think of patented technologies, they think of cell phones, computers, and pharmaceuticals. What entrepreneurs in the cannabis industry may not know is that cannabis and cannabis-related products are also patentable. Patents are important for any business, but are particularly important for an emerging industry such as the cannabis industry. The evolving legal and regulatory framework in the industry and the development of new technologies means that those businesses taking early steps to protect their intellectual property are likely to be at a competitive advantage as the industry matures and consolidates.
How do patents fit into the current state and federal cannabis regulations?
Currently, 29 U.S. states and the District of Columbia have legalized medical marijuana and eight states also permit recreational use. Under federal law, cannabis remains a Schedule I controlled substance under the Controlled Substances Act meaning that cannabis possession is illegal. However, the United States Patent and Trademark Office (USPTO), the federal agency responsible for granting patents, has traditionally taken a hands-off approach to barring particular kinds of inventions from patentability. The only kinds of inventions that are legally not patentable are inventions covering human life forms or whose sole purpose is use in atomic weapons. Otherwise, assuming that a patent application covering cannabis or cannabis-related products meets the legal standards for patentability, explained in more detail below, the USPTO presently grants patents to cannabis and cannabis-related inventions.
Historically, the USPTO has granted patents to pharmacological uses of cannabinoids and related compounds for the treatment of disease. These earlier applications typically did not require actual possession of the Schedule I controlled substance. Since 2012, when Colorado and the state of Washington legalized recreational cannabis use, the USPTO has granted an increasing number of patents to inventions that require anyone practicing the invention to have possession of cannabis. The number of patent applications filed that require possession of cannabis to practice the invention has increased each year and the trend does not show any signs of leveling off.
What is a patent and why do you want one?
A patent is a right conferred by the government on the patent owner that allows the owner to exclude others from making, using, selling, offering for sale or importing the invention covered by the patent for 20 years. Several direct economic benefits spring from patenting a commercially valuable technology. A patent holder has the right to take legal action to prevent a competitor from engaging in a variety of activities including making or selling the technology covered by the patent. A patent puts competitors on notice that they will be subject to legal action if they engage in any of those activities. A patent can be licensed, bartered or sold. Licensing fees can provide a substantial revenue stream.
There are also indirect economic benefits to having a patent. A patent provides funding and investment advantages by reassuring potential investors that a company can block competitors from using the company’s key technologies. A strong patent portfolio can make a company a more attractive target for acquisition. A patent can provide a company with credibility in the marketplace. Obtaining a patent provides a way to recognize and retain the key employees responsible for inventing new technologies.
For now, these benefits play out differently in the cannabis industry than in other industries. U.S. patent laws are federal, not state, laws. Because cannabis possession is a felony under federal law, it is uncertain how a patent infringement lawsuit would proceed in a federal court. The inconsistency between state and federal regulations in the cannabis industry may take some years to resolve. But the 20-year patent term works to the advantage of businesses that have patented their commercially valuable technologies. Companies that develop a strong patent portfolio now are likely to be at a competitive advantage if and when federal legalization takes place, even if that occurs five to 10 years in the future. In the interim, a strong patent portfolio can make a company more attractive to potential investors and acquirers as the industry consolidates.
What’s being patented in the cannabis industry?
A survey of the USPTO patent database indicates that a wide variety of cannabis-related inventions have been patented or are patent pending. These technologies relate to all aspects of cannabis production and use, for example:
Cannabis plants: new strains of cannabis plants, methods and equipment used for cultivating cannabis plants and methods of monitoring cannabis plant inventories;
Cannabis processing: methods of extracting and processing active ingredients from cannabis plants;
Cannabis products: herbal preparations, smoking products, extracts, oils, resins, foodstuffs, nutritional supplements, beverages, cosmetics, animal feeds and veterinary products;
Cannabis consumption devices: vaporizers, nebulizers, inhalers, rolling papers, beverage dispensers;
Medical cannabis use: methods of treating diseases or disorders;
Detection and chemical analysis of cannabis: methods of quality control of cannabis samples.
The USPTO examines cannabis-related patent applications in the same way that it examines other patent applications. A cannabis-related patent application is required to meet the same legal standards, but is not subject to any additional scrutiny because of the subject matter.
What do you need to think about before applying for a patent?
Obtaining a patent requires a financial outlay, and you should weigh the potential commercial value of the patented technology against the cost of obtaining the patent.
Avoid making any kind of public disclosure of your invention before you have filed your patent application. Under U.S. law, an invention that has been publicly disclosed for more than a year before the filing date of the application is not eligible for patenting. Examples of public disclosures include a sale, an offer for sale, an internet posting, a display at a tradeshow, a published article or a presentation at a meeting attended by the public.
Keep good records of how you developed your invention. These records will help your patent counsel to put together a comprehensive patent application.
What’s involved in obtaining a patent?
A patent is a bargain between an inventor and the public. We, the public, give you, the inventor, the right to exclude others from making, using or selling your invention for a limited time period of 20 years. In return, you, the inventor, are required to disclose your invention to the public. There are multiple steps in the process and these are summarized very briefly here. Readers seeking more information should visit the USPTO website (https://www.uspto.gov/patent) or contact IP counsel.
Filing a patent application. The application should include a description of the invention, any drawings or photographs and a set of patent claims. The claims define the invention in much the same way that a deed to a piece of land describes the boundaries of the land.
The application is then assigned to a patent examiner. The patent examiner will examine the application under standards set by US law. The invention must be new, useful, and not obvious. The application must also explain how to make and use the invention.
During examination, the examiner will issue one or more office actions, which are written reports describing the results of the examination. It is typical for an examiner to conclude initially that the invention is not patentable. An applicant is required to respond to an office action in writing. There may be several rounds of back-and-forth with the examiner before the examiner is persuaded to grant the patent.
The patenting process can take anywhere from 15 months to several years, depending upon the technology and the specific application.
Obtaining patent protection for key technologies is an important part of any company’s business strategy. Cannabis and cannabis-related inventions are patentable, despite federal prohibitions on cannabis possession. Companies in the cannabis industry may want to consider patent protection as part of their long-term business strategy.
About the Author: Gretchen L. Temeles, Ph.D., practices in the area of intellectual property law at Duane Morris LLP with a focus on the chemical, biotechnology and pharmaceutical industries. Dr. Temeles assists clients with patent procurement and patent portfolio management. She has experience in patent landscape analyses, freedom-to-operate searches, patent due diligence, and non-infringement and invalidity opinions. She also assists clients with transactional work, including material transfer agreements and sponsored research agreements. Dr. Temeles has worked on patent matters encompassing a wide range of technologies including food processing and food safety, genetic engineering, diagnostics, screening technologies, biologics, vaccines, stem cells, medical devices, probiotics, tissue engineering, pharmaceuticals, transgenic plants and animals, environmental remediation, and biofuels. These matters cover a variety of therapeutic areas including cancer biology, inflammation, cardiovascular disease, neurologic disorders, infectious disease, wound care, nutraceuticals and reproductive biology. Dr. Temeles has advised clients that include start-up and mid-market biotech companies, universities, pharmaceutical and medical device companies.