Two of the biggest players in the marijuana space are going to federal court over a dispute over an alleged patent infringement for a method of extracting marijuana.
Canopy Growth Corporation, a Canadian marijuana company, filed a lawsuit on Tuesday against GW Pharmaceuticals, a UK-based company that produces the Food and Drug Administration-approved cannabis-derived anticonvulsant medication, Epidiolex.
The legal action came on the same day that the United States Patent and Trademark Office issued a new patent for Canopy that gives it broad and exclusive rights to a process for the extraction of cannabinoids from plant material in the United States. This issue is giving Canopy more power to litigate and potentially receive damages from GW if the lawsuit is in its favor.
Canopy’s original patent – which was issued in 2014 (and initially registered as an international patent application in 2001) – was more restricted and gave companies like GW the freedom to adopt their own extraction practices that are outside the scope of the patent. .
This is no longer the case, and if the U.S. District Court for the Western District of Texas sided with the plaintiffs, it could have far-reaching implications for the marijuana industry.
Canopy is claiming that the GW violation of a patented extraction method “was and remains intentional and deliberate.” Because of this violation, “Canopy has suffered and continues to suffer irreparable damage and damage,” says the lawsuit.
The imminent issue for the industry is that, unless GW is able to prove that the patent is invalid, it could mean that Canopy would have exclusive rights to an extraction process that is widely used across the market – leaving any company dependent this method at risk of litigation.
Canopy’s exclusive rights will not last indefinitely, of course. The newly issued patent, which is the basis for its last iteration, should expire in just under a year and a half. But even in that period, Canopy could profit immensely from exclusivity and could have a negative effect on competitors in the interim.
“It can really be a big threat to the extractive industry. As soon as they know [the patent], companies can be considered to be intentionally infringing the patent, which can potentially triple the damage if they are sued, ”Mei & Mark LLP, patent attorney and litigator at Mei & Mark LLP told Marijuana. “While there are measures that can be taken to reduce the risk of breach of liability, CO2 extractors can essentially have this anvil hanging over their heads as the business continues – at least until the patent expires or someone manages to eliminate it.”
It remains to be seen whether Canopy will start legal proceedings against other companies using the extraction process. GW is one of the biggest players, like the pharmaceutical company that won the first U.S. federal approval for a cannabis-derived drug.
“The lawsuit claims that GW manufactures CBD – the active pharmaceutical ingredient in Epidiolex, GW’s main cannabinoid product – using Canopy Growth’s patented CO2-based extraction process,” Phil Shaer, Legal Director of Canopy Growth, told Marijuana Moment. “We have no interest in restricting access to Epidiolex, but the company must be fairly compensated for the use of our intellectual property by GW.”
A GW spokesman told Marijuana Moment that the company “is aware of the patent infringement lawsuit filed by Canopy Growth”.
“As a policy, we do not comment on any pending litigation, except to say that, based on our preliminary analysis of the complaint, we are confident in our position and will defend ourselves vigorously against this process,” they said.
One possibility would be for Canopy to license its extraction method to other companies that produce cannabis products.
But it is unlikely to go well with others in the expanding sector. And it may be that GW or other companies question the legitimacy of the patent in question in court.
On a symbolic level, all of this speaks of the growing pains of a corporatization industry – a fear expressed by some advocates as the market has expanded. And how that will happen in this case can, at least in the short term, have significant consequences for cannabis businesses across the country.
Read the new Canopy patent and sue GW for a cannabis extraction process below:
Canopy vs. GW CBD Extractio … by Marijuana Moment
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Kimzy Nanney’s photo.
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