Canopy Growth Corporation (TSX: WEED) has acquired a patent for CO2 extraction from cannabis. However, are small cannabis companies becoming potential targets? (1)
We were curious to see if Canopy’s new allegations of violating GW Pharmaceuticals (GWPH) carry weight. So we spoke to Adam Temple, the CEO of Evolved Extraction Solutions. He is interested in the outcome of the suit and what the black market means for cannabis patents.
Do you see Canopy’s patent lawsuit as viable given the context of the patent?
Even if you get a patent on something that doesn’t mean it’s enforceable. There are four things that are required for a patent to be enforceable. It has to be new, it doesn’t have to be obvious, it has to involve an inventive step, and it has to be useful. The ones in question are, was it new and wasn’t it obvious?
We don’t know if the Italian Nobel Prize winner Rita Levi-Montalcini has ever won cannabis in her life. However, she discovered the false endocannabinoid known as PEA in 1993. Decades earlier, the neurobiologist had hidden a laboratory in her bedroom that was illegal due to her Jewish heritage during World War II. So cannabis research has roots deeper in underground culture than a simple black market. (2)
Patents, not without novelty
Adam is curious to know if the patent is new and asks if Canopy Growth (or the patent’s original author) invented CO2 extraction to extract cannabis. You have the first patent for it. What does the black market cannabis sector mean for this patent lawsuit?
If there was any public information about the process people went through on the black market, then that is the real test. This is such a crucial case because of what will be revealed. If something was done in an illegal setting but was widely communicated on the internet, does that mean it’s not new, or is it new?
Therefore, any investigation prior to 2001 detailing the isolation of THC using CO2 as a means of extracting the cannabinoid could further compromise the patent. Before GW Pharmaceuticals, Dr. Geoffrey Guy 1989 Phytopharm PLC.
He later founded GW in 1998 and applied for a patent in Great Britain on February 14, 2001, detailing the sub- and supercritical CO2 extraction of cannabis. (3) Therefore, GW took precedence over the CO2 extraction of cannabis before patent 632 in October 2001. However, Phytopharm PLC’s earlier extraction techniques for non-cannabis plants did not involve CO2 as per their early patents. (4)
Can you explain the unobvious status of the Canopy Growth patent?
So that’s pretty controversial … It made sense to use CO2 to extract non-polar compounds from plants. You are simply applying an existing invention to a facility that was illegal.
For example, the Brewing Research Foundation was granted a now-expired patent in 1980 to separate the essential oils (terpenoids and terpenes) from hops (a member of the Cannabaceae family with cannabis) using CO2. (5)
Rosy Mondin – The Boss CO2 extractor
Canopy’s new war on cannabis
How do you see the impact of this patent lawsuit on the industry?
What will have a huge impact on the industry and basically mess things up forever (laughs) is whether they can get it through. What’s the result of that? Will Canopy win, close with, or lose their patent lawsuit?
I think you have to assume they might be aiming for smaller businesses because they’re more likely to give up … If any thing in ten is enforceable, it could dramatically change the impact of not only that particular patent but the patent portfolio of many of these companies . So I think that in the meantime there is a significant risk for people who use CO2 extraction.
Advice for the industry
Adam and other cannabis equipment processors will have to wait for the court to finish things off. These companies can then determine how they should structure their business in the future. In the meantime, do you have any advice for companies worried about patent litigation?
So there are many patents from my research that were granted that weren’t new. Many things were only generally known in the industry when it came to processes. They were developed in open forums and there is a lot of content on these forums to show that it was publicly known. So this is a way of checking.
But ultimately, when it comes to these lawsuits, I think one of the biggest risks is just the cost of litigation, and not whether you can actually win.
- Be careful and do your patent research when using an extraction method
- Check which patents are involved
- Check the extensive catalog of forums and websites on the Internet
- Understand the cost of litigation
Photo courtesy of: Evolved Extraction Solutions – Buchner Filtration Kit included.
Small technical improvements lead to big changes
CO2 extraction is currently only used for extracts with a high terpene content. In contrast, Canopy’s new patent rules out high terpene extracts. How important is CO2 in the field of cannabis production?
I think the industry has already moved away from CO2 for mass extraction, for things like food and distillates, the distillate vape cartridges or CBD products. Most of it is ethanol extraction. So it is based on what end product someone wants to make with the extraction process.
I think it would be very easy for GW to use other methods not listed in this patent on their Epidiolex, and I think that would be much more efficient. So I don’t think they’re going to get a lot of GW Pharmaceuticals. You could easily move away from this process. And that is something else to discuss, are they using this? [CO2 extraction] still process?
Cannabis patents are getting tricky at best given the activity of the black market. Adam mentioned that the 632 patent is useful, but there are two out of four things that are very controversial – isn’t the patent obvious and is it new?
Let us know in the comments if you think black market research and development will affect cannabis patents. Is Canopy Growth Corporation making an exaggerated publicity claim?
Photo courtesy Evolved Extraction Solutions – A Short Path Distillation Device.
- U.S. 10,870,632
- Aloe, L., Leon, A. & Levi-Montalcini, R. A proposed autacoid mechanism that controls mastocyte behavior. Agents and Actions39. C145 – C147 (1993).
- U.S. 5,466,452
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