Two of the biggest players in the marijuana space are going to federal court over a dispute over an alleged infringement of a patent for a cannabis extraction method.
Canopy Growth Corporation, a Canada-based marijuana company, on Tuesday filed a lawsuit against GW Pharmaceuticals, a UK-based company that uses cannabis to make the Food and Drug Administration-approved anti-seizure drug Epidiolex.
The lawsuit was filed on the same day the US Patent and Trademark Office granted Canopy a new patent granting Canopy full and exclusive rights to a process for the extraction of cannabinoids from plant material in the United States. This grant gives Canopy more leverage in pursuing litigation and potentially receiving compensation from GW if the suit plays in its favor.
Canopy’s original patent, granted in 2014 (and originally filed as an international patent application in 2001), was narrower and gave companies like GW leeway to use 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 Western Texas joins plaintiffs, it could have far-reaching implications for the marijuana industry.
Canopy claims that GW’s violation of a patented extraction method “was and remains willful”. As a result of this violation, “Canopy has suffered and continues to suffer damage and irreparable damage,” the lawsuit states.
The problem looming for the industry is that if GW can’t prove the patent is invalid, it could mean Canopy has exclusive rights to an extraction process that is widely used across the market – and any company that relies on this method in case of litigation.
Canopy’s exclusive rights are of course not unlimited. The newly granted patent on which the latest iteration is based will expire in less than a year and a half. But even during this period, Canopy could benefit immensely from the exclusivity and in the meantime have a deterrent effect on competitors.
“It could really be a huge threat to the extraction industry. As soon as they know about it [the patent]It can be assumed that companies are deliberately infringing the patent, which could result in tripling the damage if sued, ”Larry Sandell, patent attorney and litigator at Mei & Mark LLP, told Marijuana Moment. “While there are steps that can be taken to reduce the risk of liability breaches, CO2 extractors can essentially hang that anvil over your head while business goes on – at least until the patent expires or someone succeeds to turn it off. “
It remains to be seen whether Canopy will litigate other companies using the extraction process. GW is one of the biggest players as a pharmaceutical company to receive the first U.S. federal approval for a cannabis-derived drug.
“The lawsuit alleges that GW makes CBD – the pharmaceutical ingredient in Epidiolex, GW’s premier cannabinoid product – using Canopy Growth’s patented CO2-based extraction process,” Phil Shaer, Canopy Growth’s chief legal officer, told Marijuana Moment. “We have no interest in restricting access to Epidiolex, but the company should be adequately compensated for GW’s use of our intellectual property.”
A spokesman for GW told Marijuana Moment that the company “is aware of Canopy Growth’s patent infringement suit.”
“We are not commenting on any pending litigation for political reasons, except that we are convinced of our position based on our preliminary examination of the complaint and will vigorously defend ourselves against this lawsuit,” they said.
One possibility would be for Canopy to license its extraction method to other companies that make cannabis products.
But that probably won’t go well with others in the emerging industry. And it could be that GW or other companies question the legitimacy of the patent in question in court.
On a symbolic level, all of this speaks to the growing pains of a corporate industry – a fear expressed by some proponents as the market expands. And as it shrugs off in this case, at least in the short term, it could be of significant concern to cannabis companies across the country.
Read Canopy’s new patent and lawsuit against GW over a cannabis extraction process below:
Canopy vs. GW CBD Extractio… by Marijuana Moment
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Photo by Kimzy Nanney.
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