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Marijuana’s Role in the Pursuit of Patent Rights

Posted on Oct 24, 2016 in Articles

This article originally appeared in The Legal Intelligencer on October 20, 2016.

Marijuana is big business and the opportunities to make money, just like the plant, will only continue to grow. In 2015, Colorado’s marijuana sales came close to a staggering one billion dollars. And in next month’s election, five states will be voting on legalizing ­marijuana for recreational purposes, while four more states will be asking voters to decide whether the plant should be ­available for medical purposes. Businesses will ­expand and new companies will be born in order to try to cash in on this ­lucrative market.

What does all of this have to do with patents? Plenty. Just like any other type of business, companies that are in the marijuana industry have the potential to reap substantial rewards by developing and protecting intellectual property. Technology can and does play a role in making money with marijuana, and protecting that ­technology can give companies a strong competitive edge. One may ask, however, whether it is even possible to obtain a “marijuana patent.” After all, under federal law, the plant is still illegal—the U.S. Drug Enforcement Agency continues to list it under Class 1 (the most restrictive of the agency’s five classes for dangerous drugs). How then is it possible to obtain from the U.S. Patent and Trademark Office, an administrative agency of the U.S. government, patent rights that relate to marijuana?

Today patents are granted without regard to the legality or morality of the underlying invention. This was not always so. In Lowell v. Lewis, 15 F. Cas. 1018, (C.C.D. Mass. 1817), Justice Joseph Story wrote that a prevailing plaintiff must establish (among other things) that a patented ­invention is “new and useful.” He continued:

…the law requires … that the invention should not be frivolous or injurious to the well-being, good policy, or sound morals of society. The word “useful,” therefore, is ­incorporated into the act in contradistinction to mischievous or immoral. For instance, a new invention to poison people, or to promote debauchery, or to facilitate private assassination, is not a patentable invention.

The doctrine articulated in that ­opinion, sometimes called “moral utility” or ­”beneficial utility” was followed for several years. In Brewer v. Lichtenstein, 278 F. 512 (7th Cir. 1922), a patent on a gambling device was invalidated because “no other utility than as a lottery device … is suggested in the patent …” In Schultz v. Holtz, 82 F. 448 (C.C.N.D. Cal. 1897), a patent on a coin-operated device was invalidated because the invention’s only use was for “gambling purposes in saloons, barrooms, and other drinking places …” But in the later years of the 20th century, things began to change. For example, in In re Murphy, 200 USPQ 801 (PTO Bd. App. 1977), the Patent and Trademark Office Board of Appeals reversed a rejection of a slot machine patent: “… this office should not be the agency which seeks to enforce a standard of morality with respect to gambling, by refusing, on the ground of lack of ­patentable utility, to grant a patent on a game of chance if the requirements of the Patent Act otherwise have been met.”

In 1999, the moral utility doctrine finally met its demise at the Federal Circuit. In Juicy Whip v. Orange Bang, 185 F. 3d 1364 (Fed. Cir. 1999), the asserted patent was for a beverage dispenser with a beverage circulating in a clear reservoir, but the ­beverage dispensed by the machine did not actually come from the clear reservoir. Instead, water and a beverage concentrate were maintained in separate tanks and the tanks were hidden from the consumer’s view. The contents of the two tanks were mixed and sold to the consumer. The clear reservoir was merely a deception to attract the consumer’s attention. A lower court declared that the patent was invalid because the purpose of the invention was to “create an illusion, whereby customers believe that the fluid contained in the bowl is the actual beverage that they are receiving, when of course it is not.” The Federal Circuit disagreed: “The ­requirement of ‘utility’ in patent law is not a directive to the Patent and Trademark Office or the courts to serve as arbiters of deceptive trade practices. Other agencies, such as the Federal Trade Commission and the Food and Drug Administration, are assigned the task of protecting consumers from fraud and deception in the sale of food products … As the Supreme Court put the point more generally, ‘Congress never intended that the patent laws should displace the police ­powers of the states, meaning by that term those powers by which the health, good order, peace and general welfare of the community are promoted.'”

Fast forward to 2003, when U.S. Patent Number 6,630,507 issued: Cannabinoids as Antioxidants and Neuroprotectants. The patent, currently owned by the U.S. Department of Health and Human Services (HHS), was recently mentioned in the press – marijuana advocates argued that the U.S. government’s decision to issue the patent was at odds with the U.S. Drug Enforcement Agency’s refusal to loosen restrictions on marijuana. Yet, as reflected by the case law, the contention is ­misplaced. The requirements for patentability and the decision-making processes of the Drug Enforcement Agency are independent and unrelated.

Today, various companies that deal with marijuana have successfully obtained patent protection in a number of different areas. Some patents cover the processing of marijuana and components thereof: U.S. Patent 9,259,449 (Method for Modifying THC Content in a ­Lipid-Based Extract of Cannabis); U.S. Patent 9,205,063 (Cannabinoid-Containing Plant Extracts as Neuroprotective Agents); U.S. Patent 8,753,696 (Methods for Preparing Cannabis and Related Products); and U.S. Patent 9,340,475 (Process for Generating Hemp Oil with a High Cannabidiol (CBD) Content). Other patents cover how marijuana is used: U.S. Patent 9,380,813 (Drug Delivery System and Method); and U.S. Patent 8,955,521 (Smoking Apparatus). Curiously missing from this list are plant patents, i.e., a special type of patent that protects a new variety of plant that has been ­asexually reproduced (such as roses, peach trees, etc.). A plant patent on a new strain of marijuana has not yet emerged from the U.S. Patent and Trademark Office, but a number of applications have been filed. U.S. 2014/025922, for example (Cannabis plant named ‘Avidekel’), was filed but ­subsequently abandoned. As the U.S. Patent Trademark Office publishes new patent applications (publication is delayed, by law, until 18 months after the patent application filing date) it is reasonable to believe that more marijuana plant patent applications will appear.

As the marijuana industry continues to expand, so will the opportunities to create and grow associated businesses. Protecting the technology of those businesses through patents is vital to ensure profitability and maximize opportunities for success.

– By Lawrence E. Ashery

 

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