Business as usual at the Patent and Trial Appeal Board: the first cannabis related Patent and Trial Appeal Board decision at the United States Patent and Trademark Office

Cannabis patent proceedings are no longer something reserved for a hypothetical future when cannabis becomes legal at the federal level. On January 3, 2019, the Patent Trial and Appeal Board at the United States Patent Office (USPTO) issued its decision in the Inter Partes review, Insys Development Company, Inc. v. GW Pharma Limited and Otsuka Pharmaceutical Co., (IPR 2017-00503). This is the first time that a patent covering a cannabis-related technology has been the subject of an inter partes proceeding at the USPTO. Even though cannabis remains a Schedule I controlled substance under U.S. federal law, the USPTO, a federal agency of the U.S. Department of Commerce, routinely grants patents covering cannabis-related technologies. Because enforcement of patent rights is governed by federal law, the Schedule I status of cannabis has cast uncertainty over whether cannabis patent rights can actually be challenged or enforced. The recent PTAB proceeding shows that they can be challenged.

Inter Partes Review (IPR) is a trial proceeding at the Patent and Trial Appeal Board (PTAB) of the USPTO that permits a third-party to challenge the validity of claims of a granted patent. If the challenger demonstrates that the claimed technology was known to the public before the patent application was filed, then the claims fail to meet the novelty and/or nonobviousness requirements and the Board can declare the patent invalid.

In the Insys IPR, the Schedule I status of cannabis was not raised either in the PTAB’s decision to institute the IPR or in the PTAB’s final decision. Instead, the focus of the case was on classic issues familiar to patent practitioners -obviousness and the qualifications of experts. Claim 1 of the challenged patent, U.S. Patent No. 9,066,920, reads:

A method of treating partial seizure comprising administering cannabidiol (CBD), to a patient wherein the CBD is present in an amount which provides a daily dose of at least 400 mg.

The challenger in this IPR argued that the claimed dosage was obvious over multiple references, including one that described a slightly lower dosage for the treatment of seizures. Issues surrounding dosage range arise regularly during prosecution of biotechnology and pharmaceutical patent applications. The parties also clashed over whether particular experts were qualified to opine on the patented technology. However, the disagreement was not about the experts’ experience in the cannabis area. Rather, it was about the experts’ qualifications in the areas of pharmacology and treatment of epilepsy. In the end, the PTAB was persuaded that claims 1 and 2 were invalid as obvious over various prior art references, but they let stand other claims relating to the combination of CBD and another cannabinoid, cannabivarin. The PTAB’s decision was based on legal and scientific arguments and nothing more.

Companies in the cannabis industry face challenges in banking, taxation, real estate, insurance, and many other areas that are generally routine for other businesses. But, in this first IPR, the PTAB treated a cannabis patent no differently than it would have treated any other patent. Whether this approach will continue remains to be seen. A pending patent infringement proceeding in the United States District Court for the District of Colorado United Cannabis Corporation v. Pure Hemp Collective, Inc.(Case No.: 1:18-cv-01922-NYW) also has not touched on the Schedule I status of cannabis, suggesting federal courts may take a similar approach to cannabis patent enforcement. You can learn more about this case here.