Why has there been so much legal talk about the prospects of patent protection for marijuana plants? What states are marijuana manufactures beginning to seek patents for strains they've developed? How does the USPTO treat marijuana patent applications, given that it is illegal under federal law?
Douglas J. Sorocco, director & shareholder of Dunlap Codding, sat down with Inside Counsel to answer these questions, discuss the current state of marijuana in the United States, and where marijuana litigation is going in the next five years.
Currently, the state of marijuana litigation is mostly a campaign of threats and bluster without much substance, according to Sorocco. In traditional industries, clients are able to use federal causes of action such as trademark and federal unfair competition in order to respond to perceived competitive threats. These remedies are not, however, available to the industry since marijuana is a Schedule I drug that is prohibited from being in interstate commerce.
Only recently have growers begun to file patent applications directed to the marijuana strains they have developed. These patent applications have not yet made it through the patent process and issued as an enforceable patent grant. Even if the patent issues, however, enforcement is still a matter of federal jurisdiction which would require the patent holder to go into a federal court and allege that an infringer has made, used, sold, or offered for sale the patented marijuana strain.
“While federal enforcement of criminal statutes for growing and selling marijuana is down overall, I cannot imagine that a federal patent infringement action on marijuana wouldn’t attract heightened scrutiny to the activities of the alleged infringer as well as the patent holder,” he explained.
Deciding on how to confront an alleged patent infringer would present the patentee with a conundrum—would the risk of increased scrutiny by federal law enforcement be outweighed by the competitive benefits of removing the potential infringer from the marketplace? He said, “Given the risks of federal litigation, the marijuana industry may turn to the enforcement of state trademarks or state-based unfair competition laws but these remedies are necessarily state-limited and inapplicable to competitive activities falling outside the plaintiff’s home state.”
As of late, patent protection for marijuana plants is the “holy grail” of the marijuana industry. Although federal protection for marijuana related trademarks is prohibited by statute, it doesn’t appear that the patent statutes facially prohibit the patenting of marijuana plants. A patent would provide a marijuana company with the opportunity to litigate against any infringer no matter the state in which they reside or operate.
“Enforcing a marijuana patent would still be a risky endeavor for the patentee and accused infringer—such a lawsuit would be extremely high profile and attract federal law enforcement scrutiny—but the threat of enforcement may provide at least some leverage for the patentee against the accused infringer,” he said.
To date, there haven’t been any patents issued on particular strains of marijuana plants. Similarly, few patent applications have been published—e.g., only two plant patent applications have been published and both were abandoned during the process. As publication lags patent filing by at least 18 months, Sorocco expects to see more marijuana-related patent applications being published in the near future.
“Given what I have seen in my own practice, my belief is that these applications will be highly scrutinized as to the scope and quality of disclosure and many marijuana companies may find that the patent office will judge their applications scientifically inadequate,” said Sorocco. “Within the traditional agri-businesses, scientific data is the key metric in predicting the allowance of any particular patent application. I predict that many—although not all—of the patent applications that have been filed to date on marijuana strains or marijuana-related inventions will fail this key metric and languish at the patent office.”
So, how exactly does the USPTO treat such applications, given that marijuana is illegal under federal law? The USPTO is not treating these applications any differently, although they are receiving heightened scrutiny to ensure that the application’s disclosure is thorough and enabling. Sorocco’s expectation is that many of the already filed applications will be denied on the basis that their disclosure is insufficient. As the industry matures, however, my expectation is that the scientific data and information available to the patentee will increase and become more sophisticated.
“It is the sophistication of this data that I believe will eventually lead to a greater allowance rate of marijuana patents,” he said, “Of course, if marijuana becomes legal at the federal level my expectation is that many traditional agri-businesses will jump into the industry and bring with them experienced and robust scientific examination of their inventions which will then be used to support future patent applications on particular strains or compositions.”
In the next five years Sorocco sees marijuana litigation most likely getting worse, especially if the federal prohibition is lifted. It will become a competitive free-for-all between the businesses currently operating around the edges of legality and traditional agri-businesses sensing an opportunity and entering the market.
He explained, “Federal regulators will expect to see standards approaching those applicable to the tobacco and alcohol industries, if not the more stringent pharmaceutical standards. Given these regulatory issues and the impact on financial performance of the company, it is likely that the courts will increasingly be called upon to settle real or perceived anti-competitive behavior and infringements.”