A recent decision opens the door to cannabis patent holders to consider enforcement actions in federal court to protect their patent rights value and to obtain damages.
By Jayashree Mitra, Fox Rothschild LLP
Patent owners will likely become more concerned about intellectual property rights as states legalize marijuana for recreational or medical purposes. Patents on cannabis-related subjects are sought and granted even in the absence federal legalization.
Patent enforcement is lagging behind in comparison. Only a few actions have been taken to enforce rights.
This could be due to a number of reasons, but one is the perception that federal court may not enforce patents when infringement claims are made against products or services that are illegal under federal law. This concern could soon be changed by a recent ruling from the U.S. District Court for Central District of California. The court ruled that the illegality theory did not prevent a patent holder from asserting a utility patent related to cannabis against a company engaged in cannabis extraction.
The court’s decision in Gene Pool Techs., Inc. v. Coastal Harvest, LLC*, although tailored to specific facts, found that the allegations in the case were broad enough to cover infringing acts that are not prohibited by the Controlled Substances Act. However, the ruling still opens the door to patent owners considering enforcement actions in federal court to protect their patent rights value and to obtain damages.
To develop a successful litigation plan, the patent owner should consider the framework of the infringement argument. They must also evaluate if the infringing activities are federally legal. Finally, they need to create a strategy for damages or injunctive remedies before any litigation is proposed.
The approach and outcome of pharmaceutical marijuana products versus medical marijuana is an example where the strategy would depend on whether the product falls under federal or state legalization.
For pharmaceutical cannabis-derived products–that is, for drugs where the Food and Drug Administration (FDA) has approved a marketing application for the treatment of a disease or condition–litigation may follow the framework provided by the Drug Price Competition and Patent Term Restoration Act, or the Hatch-Waxman Act. A generic manufacturer may challenge the brand’s patents for a pharmaceutical product before a federal court. The dispute will then be adjudicated according to the Act.
FDA does not approve medical marijuana products, which are used to relieve symptoms caused by specific medical conditions under state law. FDA can also take enforcement action against a product that claims to alleviate or treat disease conditions.
Patent owners may be unable to enforce their rights if they wish to sue products for infringing patents that cover the condition.
The patent owner must constantly monitor the market for products that may be infringing and use those claims. This is different from the Hatch-Waxman Act, which states that the submission of a new drug application abbreviated (ANDA) by the FDA constitutes a patent infringement.
A second obstacle for medical marijuana may be that the product may be sold legally in the state to treat certain diseases, but may not make the claim on the label for fear of FDA enforcement actions. Even if a patent owner believes that a medical marijuana product sold in a certain state is used to treat a disease condition covered by its patents, it may be difficult for them to gather evidence that the product has violated the patent.
The FDA has also made it clear it hasn’t approved any medical marijuana products. Even if a product doesn’t violate the CSA, the Food, Drugs and Cosmetics Act could still bar it. The court in Gene Pool refused to apply the doctrine of illegality when the infringing activity did not fall within the CSA. However, if a claim for damages is based on prohibited activities under the CSA or FDCA, a judge may make a different decision.
Even in the absence monetary damages, however, a patent holder may still be able request an injunction pursuant to 35 U.S.C. SS 283 can be used to stop the infringement, removing the product from the market.
Takeaways:
- Patent owners who want to enforce their IP against medical marijuana should monitor the market to identify any infringing activities.
- Patent owners may have difficulty collecting damages but they may be able obtain injunctive remedies against competitors on the medical marijuana market.
- If the patent owner can establish that the infringing act is not illegal under federal law, they may be able to collect monetary damages.
*Gene Pool Techs., Inc. v. Coastal Harvest, LLC, No. 5:21-cv-01328-JWH-SHK, ECF 101, 13-14 (C.D. Cal. Nov. 22, 2022).
Jayashree M. Mitra is a Ph.D. intellectual property lawyer at Fox Rothschild LLP.
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The article Marijuana Moment : What Marijuana Business Need to Know about Patent Rights (OpEd) first appeared on Marijuana Moment .
