US Court Allows Patent for Marijuana Formulation

April 23, 2019 by Tom Ramstack

A federal court ruling last week set a precedent for property rights to cannabis products in the quickly growing marijuana industry.

U.S. District Judge William Martinez, an Obama appointee who presides in Colorado, ruled that cannabinoid formulations can be considered the unique handiwork of their developers and not naturally occurring substances.

The ruling appears to be a first for the marijuana industry at a time it is being legalized by states nationwide and gaining investors, according to intellectual property attorneys.

A recent report from Arcview Market Research and its research partner BDS Analytics showed spending on legal cannabis worldwide is expected to reach $57 billion by 2027. Cannabis is the active ingredient that makes the marijuana plant a drug.

Adult-use for the recreational market will make up 67 percent of the spending while medical uses take up the rest, according to Arcview Market Research.

The biggest growth is expected in North America, rising from $9.2 billion in 2017 to $47.3 billion a decade later, the report says.

Courts have avoided patent disputes over marijuana previously because only in recent years have states started legalizing it. It remains a Schedule 1 illegal drug under federal law, punishable as a felony offense for possession or sale.

Colorado, where the court ruling was issued, was among the first states to legalize both medicinal and recreational use of marijuana.

The 10th Circuit ruling allows the medical marijuana firm United Cannabis to retain its patent on a liquid cannabinoid formulation that was challenged by a competing company.

The competitor, Pure Hemp Collective, argued that it could sell the same formulation without United Cannabis’ permission because it is a naturally occurring substance.

Only products that represent the unique work of the inventors can win enforceable patents under U.S. law.

Judge Martinez agreed with United Cannabis that its formulation was not “an unpatentable law of nature, a natural phenomenon or an abstract idea.”

He wrote that even if it were “theoretically possible” that cannabinoids could occur in nature in liquid form, the patent specifies threshold concentrations of those cannabinoids.

The patent covers several liquid cannabinoid formulations, including ones that require at least 95 percent of the total cannabinoids be CBD, a non-toxic component of marijuana that relieves chronic pain and other ailments.

“Pure Hemp nowhere claims that these precise concentrations, or anything close to them, occur in liquid form in nature,” Martinez wrote.

Pure Hemp accused United Cannabis in its court filings of trying to monopolize the market for liquid CBD products by incorrectly classifying chemicals found naturally in cannabis plants as a unique product.

“There is no difference between the CBD that can be found naturally within the cannabis plant, and the CBD that is the subject [of claims in the patent],” Pure Hemp wrote in a November court filing.

The case is United Cannabis Corp. v. Pure Hemp Collective Inc. The case number 18-cv-01922, in U.S. District Court for the District of Colorado.

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