Hemp Archives - PlantLaw.com

Cannabis Patents 2000 – 2019: Trends Following Legalization

Cannabis Community, Hemp, Marketing, Plant Patents, Prior Art, Utility Patents

Guest Writer: Ian Johnson, Registered Patent Agent, Plant & Planet Law Firm

Introduction

Over the past two decades, cannabis has seen increasing public approval, reflected in legalization of medical and recreational marijuana at the state level and federal legalization of industrial hemp. As cannabis and related industries expand, participants are expected to seek competitive advantages, including patent protection. This report examines trends in United States patent filings and issuances related to cannabis since 2000.

While cannabis legalization has been slowly occurring since the 1990s, a significant development was the legalization of recreational marijuana in Colorado and Washington in 2012. Since then, several other states have followed in opening up recreational markets. Therefore, particular attention is given to activity since 2012, as the existence of recreational markets presumably creates greater competition and greater desire to obtain intellectual property protection. This date also conveniently overlaps with the beginning of implementation of the America Invents Act (AIA), which significantly altered the United States patent system. While changes in patent practice post-AIA are beyond the scope of this report, it is useful to examine behavior year over year from 2012 onward to see if legalization has resulting in increased patent activity.

Summary of Findings

Patent activity related to cannabis has increased significantly over the last decade. Filings of cannabis-related patent applications increased 96% between 2012 and 2019, with filings related to recreational and medical cannabis increasing 257% over the same time. The data show that legalization had a demonstrable effect on cannabis patent activity, and that significant resources are being invested in patent protection in the personal use sector of the cannabis industry. These trends are expected to continue, and industry participants should consider this when making decisions regarding business models and intellectual property protections.

Methodology

Research was performed using the LexisNexis Total Patent One database. Results were limited to United States Patent and Trademark Office (USPTO) publications. The following search terms were used:

cannab* – use of the wildcard * returns results for cannabis, cannabinoid, and other variants
mari?uana – use of the wildcard ? returns results for marijuana and marihuana
tetrahydrocannabinol
hemp

The listed terms were searched in the title, abstract, or claims of issued patents and printed publications. Searches were limited by time periods as shown in the detailed results. A complete list of all returned documents was created. Because of the structure of the data, a patent could create multiple documents: an issued patent and one or more published applications. For year-over-year results, these duplicates were not removed. This is not considered significant, as publication of an application and issuance generally occur in different years so double counting is minimal. However, duplicates were removed in calculating the number of filings each year to avoid inflation of filing numbers.

Detailed Findings

Overall Cannabis Patent Trends

Cannabis patent activity has increased notably since 2012. Between 2000 and the end of 2011, the USPTO published 3876 documents concerning cannabis inventions. This number consisted of 2865 published applications and 1011 issued patents. Between 2012 and the end of 2019, the USPTO published 5853 documents, consisting of 3980 published applications and 1873 issued patents. This represents 51% more total documents in 2012-2019 compared with 2000-2011. Publications increased year-over-year since 2012, with a 138% increase between 2012 and 2019. The charts below demonstrate this trend.

Because patent applications are generally not published until the earlier of issuance or 18 months following filing, publication trends are presumably delayed from filing trends. Therefore, it is useful to examine filing trends since 2012. Because of the 18-month delay prior to publication, data for any filings after July 1, 2018 are incomplete as such applications may not have been published. Therefore, both actual values from 2012 through 2018 and projected values for the years 2018 and 2019 are provided below. Using actual filings from 2017, there has been a 75% increase in filing activity since 2012. Using the projected filings for 2019, there has been a 96% increase in filing activity since 2012. The following charts demonstrate the increase in filing of cannabis-related patents since 2012 based on application filing date information.

The AIA transitioned the United State patent system into a first inventor to file system, which is expected to encourage the early filing of provisional applications to secure priority rights. Provisional applications are not published and therefore do not contribute to the publication or filing data above. However, provisional filing activity can be inferred by looking at the claimed priority dates for published applications and issued patents. While the AIA did not fully take effect until March 2013, data are presented since 2012 for ease of comparison with other metrics in this report. Due to incomplete data for 2018 and 2019 as noted above, both actual and projected values are provided. Using actual priority claims for 2017, there has been a 58% increase in provisional filing activity since 2012. Using projected priority claims for 2019, there has been an 80% increase in provisional filing activity since 2012. The following charts demonstrate filing trends based on claimed priority date of the application.

Hemp as a Distinguishing Factor

Hemp has generally enjoyed more acceptance for its industrial uses than marijuana, despite the fact that both constitute cannabis. Inclusion of hemp is necessary to return all results for cannabis related patents. However, to provide a better picture of post-2012 activity in the recreational market, a separate set of searches was performed omitting “hemp” as a search term. It is presumed that doing so will return patents and applications that are more focused on the recreational or medicinal cannabis market. This is based on the fact that many of the results obtained through searching “hemp” include inventions with industrial applications, such as plant fiber composites or textiles, rather than inventions related to personal use of cannabis. For convenience, such patents are referred to as “recreational.” Because this method of discriminating does not perfectly correlate with the subject of any given patent, the results pertaining to the recreational market represent general trends rather than exact activity. Nonetheless, the trends are worth noting for an evolving industry.

“Recreational” Patent Trends

Between 2000 and the end of 2011, the USPTO published 2115 documents associated with recreational cannabis inventions. This number consisted of 1623 published applications and 492 issued patents. Between 2012 and the end of 2019, the USPTO published 3427 documents associated with recreational cannabis inventions, consisting of 2373 published applications and 1054 issued patents. This represents 62% more total documents in 2012-2019 compared with 2000-2011. Total publications increased year-over-year since 2012, with a 253% increase between 2012 and 2019. Published applications saw an increase of 275% over that period, with issued patents seeing a 209% increase. The charts below demonstrate this trend.

These findings correspond to the overall increase in cannabis-related patents and demonstrate that the recreational patent sector is growing at an even greater rate than cannabis patents generally. This supports the theory that recreational markets and expansion of legal personal use of cannabis have resulted in an increase in patent activity in the industry.

Again, publication totals are not necessarily the most accurate reflection of patent behavior by cannabis businesses. Therefore, it is useful to examine filing and provisional trends for recreational patents. These results are subject to the same 18-month delay problems noted above, and therefore actual and projected values are provided. Using actual filing data for 2017, there has been a 181% increase in filing activity since 2012. Using projected filing data for 2019, there has been a 257% increase in recreational filing activity since 2012. Using actual priority claims for 2017, there has been a 196% increase in provisional filing activity since 2012. Using projected priority claims for 2019, there has been a 289% increase in recreational provisional filing activity since 2012. The following charts demonstrate recreational filing trends from 2012 to 2019.

Patents that could be classified as recreational made up approximately 53% of all filings between 2000 and 2011. However, following legalization the percent of patents and applications considered recreational has increased to approximately 77% of filings in 2018. The chart below demonstrates the growth of the recreational sector’s share of cannabis patent activity.

Conclusion

In conclusion, the data provide clear evidence that cannabis patent activity has increased over the last decade. Further, patents associated with the recreational and medicinal sectors of the cannabis industry appear to be increasing at an even greater rate.

Further Developments to Watch

The trends demonstrated in the data suggest that cannabis patent activity will continue to increase in 2020 and beyond. This is further expected due to continued legalization efforts. It remains to be seen whether the federal legalization of industrial hemp and implementation of USDA plans will result in the recreational sector’s share of patent activity decreasing, as activity becomes focused on industrial hemp related patents.

An additional area that merits investigation is the issuance rate of cannabis patents. A rudimentary estimate comparing the number of filings to the number of issued patents for 2012-2019 yields an issue rate of approximately 49.6%. Assuming an average time to issuance of 2.5 years, comparing the total filings from 2012-2017 with the total issued patents from 2012-2019 yields an issue rate of approximately 64%. Comparing the total filings from 2012-2017 with the total issued patents from 2014-2019 yields an issue rate of approximately 52%. The issue rates for recreational patents over the same timeframes are similar. However, given the wide variance in time between filing and issuance, the above rates are only speculative. There has been concern that cannabis patents are issued at a higher rate due to the lack of prior art in the field which examiners can cite against the issuance of a patent. The issuance rates noted above do not seem to lend much support to this concern, as the USPTO claims its overall issuance rate is roughly 68%.

Other concerns have been raised about the strength and usefulness of cannabis patents. It is currently unclear how many issued patents are strong enough to survive challenges of invalidity in either post-grant USPTO proceedings or litigation. Currently, only one major cannabis patent is in litigation.[1] As of this writing, the court appears to be treating the case as any other patent infringement suit.[2] However, industry participants will surely watch the case and its outcome may affect the perceived value of cannabis patents and subsequently alter patent activity.

About the Author

Ian Johnson is a registered patent agent with Plant & Planet Law Firm He works with clients to obtain patents and other protection for their intellectual property and assists clients in licensing, acquisitions, and sales of valuable business assets. He also draws on his experience as an entrepreneur and his broad background across technology, business, and law to support Plant & Planet Law Firm in providing holistic solutions on matters related to business entity formation, corporate governance, and investor relationships. Ian holds a Bachelor of Science in Engineering with a concentration in acoustics from Purdue University. He anticipates receiving his J.D. from the University of Florida Fredric G. Levin College of Law in May 2020. He can be reached at ijohnson@pnplf.com.

Plant & Planet Law Firm was founded with a mission to provide legal services to clients whose research, technologies, products, innovations and businesses make the world a better place. The firm leverages its professionals’ variety of legal and technical backgrounds to provide clients solutions in the areas of intellectual property, business law, international law and commerce, and more. The firm is proud of its involvement in the emerging legal cannabis industry, and is also heavily involved in the agriculture, water, clean energy, life sciences, and medicine industries. Plant & Planet is a trusted home for inventors, entrepreneurs, and companies looking to improve the world. All the firm’s activities are tied to its mission statement: “Our clients make the planet better.”

[1] United Cannabis Corp. v. Pure Hemp Collective Inc., No. 1:18-CV-01922 (D. Colorado filed July 30, 2018).

[2] United Cannabis Corp. v. Pure Hemp Collective Inc., No. 18-CV-1922-WJM-NYW, 2019 WL 1651846 (D. Colo. Apr. 17, 2019) (Order Denying Defendant’s Early Motion for Partial Summary Judgment). Discovery in the case is ongoing at the time of this report.

DISCLAIMER: This report is for informational purposes only and does not constitute legal advice. No attorney-client relationship is created by this report. Neither the author nor Plant & Planet Law Firm will be liable for any harm arising from actions taken in reliance on any information herein.

January 20, 2020/1 Comment/by Dale Hunt

Still So Much Confusion about IP Options for Cannabis – Let’s Fix That

Genetics, Grow Your Business, Hemp, International Commerce, Patenting - Novelty, PBR, Plant Breeding, Plant Patents, Plant Propagation, Prior Art, Social Media, UPOV, Utility Patents

IT’S NICE TO BE NEEDED, IF NOT ALWAYS BELIEVED!

“UPOV PBR” in the US is Only Available for Industrial Hemp

There are a lot of people out there with some background in plant-related IP and some of them have strong opinions about the right way to do things. I know because I hear from them. That’s a wonderful thing about the open lines of communication available via social media and other tools—it seems nearly everyone is accessible to nearly everyone else. I wouldn’t want it any other way, because this helps me understand what still needs to be emphasized and reinforced in blogs like this.

I’m going to borrow from some interactions this past week or so, editing very lightly to make it more generally useful. Here is a question I was asked very recently: “If you have 20 years of experience with UPOV PBR why suggest to average clients to get an expensive plant patent for a Cannabis variety? Most can neither afford to obtain or defend a Cannabis plant patent unless I am mistaken?”

And here is my answer:

UPOV in the US is Uniquely Unlike the Rest of the World

First, UPOV Plant Breeders’ Rights in the US are only available under the USDA Plant Variety Protection Act (PVPA) and only cover seed-propagated plants. An amendment to the PVPA permitting the USDA PVP system to also cover asexually propagated plants was passed as part of the 2018 Farm Bill, but the USDA is still working out the administrative rules and procedures for this, so applications to cover asexually-propagated plants are still not being accepted.

The original limitation in the PVPA to cover only seed-propagated plants was a special carve-out from the normal UPOV scope that covers both sexually and asexually propagated plants, and it was done this way in the US because asexually propagated plants have been covered under the Plant Patent Act since the 1930s (this Act established the plant-patent system as a special form of protection outside of the normal utility-patent system).

A Special Exception in UPOV Just for the US

The US is unique in having this divided IP system, and the UPOV Act of 1991 was specifically written to accommodate this, by including Article 35(2). If you look at footnote 8 of the list of UPOV members, that “reservation” was exercised by the US and never has been by any other UPOV member. Since the US is the only country with a split system, no other country will ever need to invoke Article 35(2).

OK so IP to cover plants in the US, unlike anywhere else in the world, is really three different systems:

USDA PVP (i.e., UPOV) which is still available only for sexually propagated plants (but that exclusion will go away soon).
USPTO plant patenting, which is only available for asexually propagated plants.
USPTO utility patenting, which is available for both modes of propagation.

Testing for Distinctness, Uniformity, and Stability

Something else that is very important to know about the USDA PVP system is that it requires a seed deposit with the authorized USDA seed depository. And until very recently, no kind of Cannabis seeds were accepted for deposit. Very recently the USDA started accepting deposits of seeds for “Industrial Hemp” as defined in the Farm Bill (Cannabis sativa having less than 0.3% THC). Once the USDA is equipped to work with asexually propagated plants, it will require “witness plants” for DUS examination. DUS testing is the UPOV approach to determining whether a given cultivar is suitable for protection. The D stands for Distinctness and asks whether the cultivar can be distinguished from the closest know cultivars including but not necessarily limited to the parents. The U is for Uniformity and asks whether a group of seeds or a group of clones all grow out to being true-to-type—having the characteristics that define the cultivar. The S comes from Stability and asks whether multiple generations of seeds or clones consistently show the same characteristics as previous generations. These tests are done under consistent conditions to try to remove the variability that would come from different cultivation techniques from one test to the next.

USDA will never accept deposits or witness plants for a form of Cannabis that is still federally illegal. And USDA has not yet worked out exactly how they will do DUS testing for clones of Industrial Hemp or any other clonally propagated variety people may wish to protect under USDA PVP/UPOV.

What this means, and it is part of my answer to your question about why I would suggest that people get a plant patent for their Cannabis cultivars is that UPOV protection in the US (the USDA PVP system) is that quite literally not available for most Cannabis cultivars that people want to protect. The only kinds of Cannabis cultivars protectable via UPOV in the US are cultivars of seed-propagated industrial hemp.

If You Want to Protect Marijuana, You Can’t Go to the USDA

I have clients who want to protect their higher-THC cultivars and even who want to protect hemp cultivars that they are cloning instead of seed-propagating. If I tried to push them toward UPOV protection in the US, I would be committing malpractice because that form of protection is absolutely not available, period.

The “deposit problem” that makes USDA PVP impossible for everything except industrial hemp is not a problem for plant patents, because the plant patent system does not require a deposit of any kind. So, there’s no issue of federal illegality–the USPTO has been issuing Cannabis-related patents since the 1940s and has so far issued three plant patents for Cannabis cultivars, with many, many more that are pending and working their way through the process.

Getting Real About the Cost Comparison

Another part of your question also deserves comment, and that is the part about plant patents being expensive. In fact, a USDA PVP application, including the seed deposit, costs $5150 in USDA fees alone. So even before paying ANY attorney fees for this, the USDA fees by themselves cost more than we charge for preparing and filing a plant patent application.

Obviously there are USPTO fees on top of what we charge for our work doing plant patent applications, and there are costs associated with responding to the very common requests from the USPTO examiner to provide more information about the cultivar, but we typically see cost averages for plant patents, start-to-finish, including USPTO fees, between $10k and $12k paid out over the course of the process from examination to issuance. I’m not meaning to imply that this is a trivial amount, but it’s very comparable to the cost of obtaining a USDA PVP registration (if it were even available). ($5150 plus attorney fees for preparing the application and moving it through the process to allowance would likely add up to a total of $8-10k, and potentially more depending upon an attorney’s billing rate and whether anything unusual arose during the DUS testing that would require attorney work to resolve.)

The expensive form of US IP protection for plants is a utility patent. However, it is currently the only option available for seed-propagated non-hemp Cannabis. I won’t go into a lot of utility patents because this email is already getting long. I have blogged about all of this at PlantLaw.com.

I Don’t Tell People What to Do, I Listen and then Tell Them About Their Actual Options

One last part of your question I’d like to address is the part about suggesting to average clients that they get a plant patent. In fact, I don’t. I listen first to what they want to accomplish with their cultivar, how they propagate it, how they are going to commercialize it, why they believe that they need some protection, etc. Then we talk about the options and what their choices are. It’s a matter of giving good legal advice that takes into account a client’s situation. And in some cases, the advice is that if their security is strong enough, maybe they don’t need any formal kind of IP protection, especially if they are having trouble affording it. See this recent blog post, and please do read all of it before deciding it’s incorrect or it’s bad advice.

OK, I hope that explains why I don’t recommend UPOV for my Cannabis clients. I absolutely would outside the US, obviously, and will within the US, as one option, once the USDA PVP system accepts such applications. However, even then, there are numerous considerations that go into deciding the right way to protect a given cultivar. I went into this in a recent blog.

Are Self-Taught Cannabis Breeders Unqualified? I Say No

Just one other comment about plant breeders, and we may just need to agree to disagree on this point. I have worked with PhD plant breeders at universities and with BS- or MS-level plant breeders who work for several of my clients. While they have training in genetics and inheritance, every one of them that I have worked with has been focused on phenotypes. They do a cross of parents that have some of the traits they are looking for and then they grow out many, many of the offspring and select the ones with the best phenotypes and keep propagating and selecting until they have something worth protecting.

This is exactly what I see self-taught Cannabis breeders also doing. While I may understand more about genetics, epigenetics, pleiotropic inheritance, recombination rates, the biochemistry of terpenes and cannabinoids and flavonoids, these breeders know what they are doing, and they get very special results. Obviously, some (including some clients I’m working with) are looking for a particular chemotypic profile or at least for something that meets certain chemotypic criteria. They get their certificates of analysis (COAs), which are now readily available since many states require them as part of the legal Cannabis market. And the breeders I work with definitely know how to read a COA and make decisions based on it. College and formal training is not without value, but from where I sit, having worked with breeders whose training ranges from self-taught to PhDs in plant breeding, it seems to me that they end up doing and looking for the same kinds of things. Now, if one were doing marker-assisted breeding as many in Big Ag do, that would be different. I’m talking about fruit and grass and flower breeders, whose work approach in general terms is very similar to that of Cannabis breeders I know.

Well, that blog kind of wrote itself this week, by being lifted straight out of an email I sent. I hope it’s helpful. You can always get in touch for help with these things by going to PlantAndPlanet.com.

July 11, 2019/3 Comments/by Dale Hunt

Let’s Talk About Reproduction and How You Will Get Paid

Genetics, Grow Your Business, Hemp, Marketing, Patenting - Novelty, Plant Patents, Plant Propagation, Utility Patents

HOW’S THAT FOR A TITLE? YOU’D BETTER READ ON

Hubbub Is a Word and It Happened This Week

I always get the best blog ideas from questions that come up during the week, and this week was no exception. A friend of mine whom I haven’t yet met in person (interesting times, these) brought to my attention some controversy on social media about a plant patent and asked me a series of great questions about the patent itself and the hubbub around it. (I’m surprised my spellcheck didn’t go nuts just now, but apparently hubbub is a word.)

The crux of it was this: There was a plant patent posted somewhere on social media and certain portions of the description were highlighted. One portion described that the new cultivar was made from an open cross between two traditional varieties. Another highlighted portion pointed to some phenotypic features of this new variety that could apply broadly to a huge number of other varieties as well.

When you look at a plant patent, you’ll typically see several pages of detailed botanical description like “Stem morphology.—Rugose — longitudinal ribs with corky lenticels on older portions.” Or you might see curious botanical terminology like “hirsute peduncle.” And, after you google “hirsute peduncle” to see if that’s even real (it is) and what it looks like (it’s not as weird as it sounds), you will still be left wondering how it helps protect this particular cultivar or distinguish it from others.

Plant Patents Got People Worked Up

People seemed concerned that — although plant patents are supposed to only cover clones — the written description was so broad it could cover much more than just the clones of this one variety. Could it also cover their plants and, therefore, be an over-reach? Is this the next bad patent that is going to cause trouble for the industry? Or, on the other hand, if this patent really ONLY covers clones, what is the point of even getting a plant patent when Cannabis is often propagated by seeds AND clones?

These are common questions and they deserve some respectful discussion. The fact that these questions come up a lot reveals that this topic needs to be explained in better ways and in more detail. I hope this helps.

Let’s start with some historical background. The original Plant Patent Act was passed in 1930 and updated in 1952, long before there was any DNA testing. So it required (and still does) a description “as complete as is reasonably possible.” For this reason plant patents go into all kinds of detail describing the plant botanically, providing pictures, describing how the cross was made, describing the closest known varieties, etc.

Ignore That Hirsute Peduncle

What you need to know is this: NONE OF THIS DESCRIPTION MATTERS when it comes to infringement. Everybody knows — especially with plants like Cannabis — that phenotype and especially chemotype can be highly variable based on where and how the plant is grown. They also know that a lot of plants that are not genetically the same can be very similar in appearance.

When it’s time to prove infringement, DNA tests will be done and the plants will have to be genetically identical or there will be no infringement. Not similar; identical. Plant patents strictly and narrowly only cover clones of a single variety, where that variety was originally created by a sexual cross or a mutation — a single genotype with no equivalents or near-misses. So everybody can take a deep breath and ignore what’s in the detailed description; it’s only there because the statute requires it.

Interestingly, you don’t need any DNA information when you file a plant patent (another historical legacy of when the statute was written); but that’s OK, because that sequence isn’t changing — it will be there ready for its day in court when you need it. You may have other reasons to lock in the record of your DNA information and your proof of ownership now, but you won’t need it to get a plant patent application filed or allowed.

But Please DO Focus on This

Now that we’ve covered what to ignore, let’s talk about what to focus on. I’m going to start with a short list of the most important things you should know about plant IP in the US.

First determine whether you are looking at (or talking about) a Plant Patent, a Utility Patent, or a USDA PVP Registration. They are very different kinds of protection and don’t necessarily all make sense for the same kind of business.

The easiest way to do this is to look at the number on the first page, upper right corner. If it has PP followed by five digits, it’s a Plant Patent. If it has seven or eight digits, it’s a Utility Patent. If the number starts with a string of digits that looks like a year, it’s either a published patent application or a USDA PVP Registration. That will be easy to tell based upon which agency published the document.

Now that you know what you’re looking at, it’s time to know (or remember) what kinds of rights it grants.

Like a Copyright – Meaning It’s about Direct Copying

A Plant Patent is very much like a copyright on a single cultivar – it protects ONLY clonal copying of the exact genotype of the claimed cultivar. Note that this is NOT defined by the chemotype. Chemotypes can vary depending on how the plant is cultivated, but genotypes remain constant. Plants are like us in this way — we might be thin in the summer and chunky after all the holiday meals, but we have exactly the same genes all year long.

A Plant as An Invention – Protecting an “Idea” Several Different Ways

A Utility Patent treats a plant (or anything) as an invention. You can claim pretty much anything you can put into words if you can convince the patent examiner that what you have claimed is (i) new; (ii) not obvious; (iii) adequately described; and (iv) “patentable subject matter” (which means, among other things, not something already existing as an unmodified product of nature).

This flexibility in claiming matters a lot, especially with a plant like Cannabis that can be reproduced with clones and seeds and that can be commercialized as flower and extracts, as well as the clones and seeds themselves. This is because, in a utility patent, you can claim more than just the clones of one genotype. You can at least try to claim things like*:

1. 1. Plants having the same genotype as the seeds or tissue on deposit as accession #ABC at XYZ depository.
  2. Progeny of the plants of claim 1, or any part of said progeny.
  3. Seeds of the plants of claims 1 or 2, and progeny thereof, and any part of said progeny.
  4. Harvested material or extracts from any parts of the plants or seeds of any of claims 1-3.
  5. A medicinal or recreational product made from any of claims 1-4.
  6. A vape cartridge containing an ingredient from claims 4 or 5.
  7. A method of making a medicinal or recreational product by providing a material from any of claims 1-4, performing at least one processing step on the material, and obtaining a product.

*These are simplified – this is a blog rather than a law school course

Seed Rights – With Important Exemptions

A USDA PVP Registration

- - protects seeds* from being “copied” in bulk to compete with the owner of the variety
  - but expressly permits use of the seeds for breeding to make other new varieties (this is called the “Breeder’s Exemption“)
  - and also expressly permits a purchaser of protected seeds to keep enough seeds to replant the same acreage as the seeds he/she originally purchased for planting (this is called the “Farmer’s Exemption“).

*USDA has recently expanded PVP to cover non-seed varieties, but that is beyond the scope of this post.

It’s All About How You Plan to Get Paid

The reason that it’s so very important to understand the differences among these three kinds of protections is that some of them MAKE NO SENSE and have ALMOST NO VALUE, depending upon your business model. In other words, going back to the (hopefully) provocative title of this blog:

Let’s talk about reproduction/propagation and how you will get paid.

If you are selling seeds, and only selling seeds, would it make any sense to spend your money on a plant patent? Almost certainly no, if your IP funds are limited. The only reason I could think of to still file a plant patent is if the cultivar that is the source of the seeds you want to sell is, itself, so valuable that you would want to control its propagation, behind the scenes. In that scenario, the plant patent would be insurance against theft of the propagating material of that “seed parent” cultivar. That plant patent would certainly give you good legal recourse against anyone who showed up in possession of plants of that genotype later on, since that exact genotype would never come from the seeds you are selling. But a plant patent would not directly fit or support the seed business itself at all.

So what kind of protection would make sense if you are selling seeds? Well, it really depends on what the seeds are for. The first question you’d ask today is whether the seeds are for industrial hemp because, if they are not, your only option in the US is a utility patent. USDA PVP registrations are available for industrial hemp, but still not for higher-THC Cannabis (over 0.3% THC).

If you are selling clones… well, you REALLY NEED a plant patent, but you also need more than that. Let’s talk about what your business is about. Are you selling clones to nurseries who will propagate and sell more clones to other people? Then you need a plant patent AND a license agreement with that nursery requiring them to pay you for every clone they make and sell.

There are other ways to do this, but you can’t just rely on a patent and you really can’t sustainably be in the clone business without a plant patent AND some meaningful, well-crafted license agreements. Get professional help. I know a guy.

If you are only selling harvested flower or extracts and you do all your own farming and you are super careful with every last bit of your propagating material, then you could get by without any IP protection. In that case, if you chose to get IP protection if would be a form of insurance. You could have plant patents to protect your genetics in case someone were to take a cutting and start competing with you.

And if you wanted to be extra careful, you could get a utility patent to claim the same genetic line more broadly. This IP approach would be all about having recourse if your efforts to control the physical material were to spring a leak somewhere. We all know this can happen, which is exactly what insurance is for.

Think it Through – Make a Plan – Get Help

There are many variations on these three main approaches to reproduction and getting paid. Whatever your business model, there will be an IP approach that can help protect what you’re trying to do; and there are others that could be pointless. There is definitely not a one-size-fits-all solution in plant IP, especially with a plant like Cannabis that can be propagated via seeds or clones and that can be commercialized as anything from industrial hemp to craft marijuana to pharmaceutical-grade cannabinoids to who knows what else?

So think about YOUR business model and be careful with YOUR genetics and then — when you need some help putting it all together — get some help. Like I said, I know a guy.

By Dale Hunt – The opinions expressed here are the author’s own and do not necessarily reflect those of his professional colleagues or his clients. Nothing in this post should be construed as legal advice. Meaningful legal advice can only be provided by taking into consideration specific facts in view of the relevant law.

June 5, 2019/2 Comments/by Dale Hunt

Standing Up to Big Ag

Big Ag, Hemp

WHAT TO DO IF YOU DON’T WANT TO BECOME BIG AG’S EDIBLE

Big Ag Will Have You Conform or Go Under

I wrote last week about how Big Ag combines its patent strategies with commodity-market pressures to force farmers to stop growing their own plants and start growing Big Ag’s patented GMO plants or eventually go out of business. While Big Ag can’t directly make you stop growing your own plants, they can make it impossible for you to compete with the farmers who embrace their system of patented seeds and related Big-Ag products to produce maximum-efficiency yields. The whole program is designed to drive you out of business if you don’t go along. And it will do exactly that.

If that sounds crazy or impossible, click over and read that blog. It’s scary stuff, but it has happened in the soy and corn industries, and Cannabis* is next if we don’t learn the lessons that history stands ready to teach us. Go ahead and read it; I’ll wait.

(*When I refer to Cannabis in this article and in most places I do so as plant geneticist, which is why I almost always use the capital C. I’m referring to the genus Cannabis, which ignores distinctions between “hemp” and “marijuana.” I care about the Cannabis industry and Cannabis breeders, growers, workers, and businesspeople whether they are on the high-THC or the low-THC side. Here’s hoping that distinction goes away. And, frankly, our brothers and sisters working in “industrial hemp” need the most help standing up to Big Ag because they will be on the front lines of the coming commodity wars.)

Welcome back. Now let’s talk about what we can do to avoid being the next soy or corn — how not to become Big Ag’s next edible. We’ll start by learning from another industry where things are different: the electronics industry.

Mutual Assured Destruction – Crazy But It Works

In the electronics industry, for the most part, there are several huge players, all of which own an immense number of patents. And, generally, they stay out of court. There are some conspicuous exceptions — like the recent Apple v. Qualcomm litigation which ended up costing Apple something like $4 billion — but that is unusual. Most of the time, these companies know they each have so many patents they could sue each other all day every day, and everyone would end up losing — like nuclear war; mutual assured destruction; MADness. So, they just don’t. Sometimes they cross-license each other, but they rarely end up in a fight to the death in court.

When I was newly graduated from law school, my law firm had an electronics client that didn’t like its balance of power with respect to one major competitor. I never knew exact details, but our client was paying its competitor a very high license fee for some computer chips they were using in their products — let’s say their license fee was about $10,000,000/year; I don’t think that’s too far off. So, they hired our firm to identify patents this competitor might infringe, in order to sort of level the playing field.

The lawyer in the office next door to mine spent all day every day searching for patents that the competitor company could possibly infringe, and then he would call the owner — usually a solo inventor or a small company — and simply ask them whether they would consider selling their patent. So, my colleague was a very highfalutin telephone solicitor. After a couple months of this, the lawyer had amassed a few dozen patents for our client, which apparently shifted the balance of power so much that the license they paid went down something like 99%! (From about $10,000,000 to about $100,000.) The details might be off, but the number of zeros is in the right range. I think my firm’s client spent around $250,000 on the legal fees and the purchase of the patents so, overall, it was a great investment.

It’s All About Leverage

The message is this: without ever going to court, having some patents you can use to THREATEN to go to court is VERY POWERFUL LEVERAGE — a lot like nuclear weapons. Nobody wants to use them; they are terribly destructive. Patent litigation is terribly expensive. If you have a large warchest of patents you can use to sue someone, chances go way down that you will be sued for patent infringement. In other words, patents can be used offensively AND defensively.

Here is how to stand up to the patent strategies of Big Cannabis. United Small Cannabis[1] needs its own patent strategy; if you have a gun ready for this kind of gunfight, chances are there won’t ever need to be an actual gunfight.

Greece is a Badass?

A useful analogy in international law is NATO, the North Atlantic Treaty Organization. Under NATO, every member country has agreed to come to the defense of every other member country if any member country comes under attack. So, nobody messes with Greece. Is that because Greece is a badass? Well, Greece was a badass a long time ago; but, right now, it’s more because Greece has some very powerful friends.

If every member of the Cannabis community who isn’t Big Cannabis agreed to join an alliance of some sort, it could have a power more-than-sufficient to counterbalance Big Cannabis.

An Effective Alliance Needs…

What would this sort of alliance need to look like in order to be effective?

It would need to have at least four characteristics:

It would need to have some criteria for membership — to know who qualifies as Small Cannabis in the first place, and whether someone who qualifies is in good standing at the moment.
It would need to commit to some sort of mutual non-aggression or respect for each other’s rights.
It would need to commit to some sort of mutual defense.
It would need to have some minimal level of funding and administration.

Starting A Discussion

This blog isn’t about having all the answers or solving all the problems. Hopefully it will start a discussion. But here are some ideas about points 1 through 4.

Criteria for membership: Not every member needs to have patents. Greece doesn’t have any nuclear weapons — it has people and geography worth protecting; it has an economy that can contribute a little to the NATO budget. By analogy to Greece and NATO: the more members of Small Cannabis, the more power it has, I think.
Mutual non-aggression: Basic respect for each other’s brands, patents, reputation, and rights; community ethics; things that hopefully the community has stood for since before legalization. And — when it comes to Intellectual Property — a promise not to sue each other. Perhaps a binding agreement to start with mediation or arbitration if a genuine dispute arises. This would be much less expensive for all involved, anyway.
Mutual defense: If anyone in United Small Cannabis is sued by Big Cannabis, EVERY SINGLE PATENT AND TRADEMARK in the portfolio of EVERY MEMBER of United Small Cannabis is available in a countersuit against the Big Cannabis plaintiff. If you sue my friend, I sue you. If you attack Greece, NATO attacks you — all day, every day, and twice on Sunday. (The practical result of this is that nobody will ever attack Greece, and hopefully nobody would ever sue a member of United Small Cannabis.)
Funding and administration: Actually making any of items 1-3 work will be impossible without 1) someone running United Small Cannabis and 2) some funding to actually file a countersuit, if Big Cannabis ever were to test the resolve of United Small Cannabis the first time. So United Small Cannabis members would need to create a nonprofit administrative body and fund it with dues in order to make the counterbalancing power credible.

One other comment

There actually are SOME valid patents, even in the hands of Big Cannabis.

Let’s suppose that Big Cannabis actually does invent something stupendously useful, valuable, and meritorious and it has wide applicability. Just as an example, it’s a non-GMO approach to some kind of disease resistance that really works for all cultivars and really is new and non-obvious. In other words, it’s a genuine invention that benefits everyone, just like inventions are supposed to be when they’re truly patent-worthy. (Face it — that happens sometimes, even when it’s done by someone you don’t especially like.)

There could be an approximately equal balance of power and equal strength of patents between Big Cannabis, with its patent portfolio, and United Small Cannabis, with its aggregate patent portfolio.

This could be very useful if Big Cannabis ever actually did invent something that everyone in the entire Cannabis community really did need access to. Maybe that will never happen, but maybe it will. It would be nice to have some negotiating leverage if that situation should ever arise, instead of being completely locked out of a game-changing technology. That sort of lockout is what Big Cannabis promises to its investors. (Maybe you’ve seen a video like that.)

Remember – It’s All About Leverage

So, if the aggregate patent portfolio — a patent pool as these things are sometimes called — included some things that Big Cannabis needed, or perhaps some things that Big Cannabis happened to be infringing and could be threatened with, then the two sides would have a balance of power that would otherwise be unthinkable under any other scenario. It would make it so the parties could negotiate genuinely fair licensing terms.

Going back to this imaginary situation in which Big Cannabis has a technology that everyone needs access to — United Small Cannabis could, in this case, have the kind of leverage necessary to be able to negotiate a license that would fairly compensate Big Cannabis for the legitimate discovery while making the technology accessible to the entire industry.

Make This Happen – Tell A Friend – Start a Movement

What are our next steps? If you know someone who has a small Cannabis-related business of any kind (and don’t forget hemp!), share this with them. Ask them to share it with others. Go to plantlaw.com, risingtidecollective.co, cannabiscultivatorsunite.com, and futurecannabisproject.org. The community needs to create some momentum behind the creation of a NATO-like organization – in this blog it is called United Small Cannabis, but the name doesn’t matter. What matters is that it can be a genuine counterbalance to the power of Big Cannabis.

___________________

[1] United Small Cannabis is an arbitrary placeholder name for a coalition of growers, breeders, and other small Cannabis-related businesses that are struggling not to be overwhelmed by Big Cannabis, whether that is a Monsanto-like GMO-purveying Big Ag company or a massively funded, monolithic, vertically integrated, publicly traded giant. Organizations that have started from grassroots and are working to address these concerns are the Rising Tide Collective (risingtidecollective.co), and Cannabis Cultivators Unite (www.cannabiscultivatorsunite.com).

May 29, 2019/5 Comments/by Dale Hunt

COMMON BUT VERY AVOIDABLE MISTAKES IN PLANT PATENTING

Protect Those Cultivars, But Do It Right

Plant breeders must devote many years and tremendous effort to develop a new plant variety with strong commercial potential. In order to protect all that effort from illicit copying (propagating), many choose to seek protection under the U.S. plant patent system. There are some common mistakes that many breeders (and attorneys) make when they are first learning how the plant patent system works. The three most common are (1) naming the variety in a way that is incompatible with trademark protection; (2) misunderstanding the flexibility of filing-date and disclosure requirements; (3) incorrectly timing the filing of the application.

Don’t Mess Up Your Trademark Rights

When a plant breeder has spent years, or even a decade, developing a new plant variety and has finally made selections and propagation and gone through all the steps to really confirm that a variety has great commercial potential, it is not uncommon to be thinking almost entirely in commercial terms and to have a favorite “sexy name” for their new and exciting variety. The problem is that the sexy name is going to function as intended — in the capacity of a trademark associated with that variety. Trademarks are great, but the plant breeder also must select a “generic name” for the variety. And the tricky part is that the generic name is, by definition, a name that can be universally used in reference to the variety, without infringing anyone’s trademark rights.

Therefore, it is actually necessary for each commercial variety to have TWO names —

one is the generic name and one is the trade name. This might make sense in the context of trademark law and policy more generally. Trademarks are not allowed to take generic words out of our everyday language and make them the intellectual property of one owner. Nobody could get a trademark on “Light Bulb,” for a light bulb, or “Doorknob,” for a doorknob, and then claim that everyone who used one of those terms was infringing their trademark. No, the people who use those terms are just speaking the language–using the best words the language has for the things they are talking about. That is what a generic term is. So trademarks CANNOT cover truly generic terms.

Now, applying this back to plant varieties, when a breeder designates the generic name for a variety, this is tantamount to saying “this is a name that anyone can use in referring to this variety, without bumping into any trademark rights — this is the best word for the public to refer to this variety.” And by choosing a generic name for a plant variety the breeder is essentially dedicating that name to the public and foregoing any later claim that the name is the breeder’s trademark. On the other hand, the breeder can also pick a trade name that is not the generic name and that the breeder or the owner of the variety has exclusive rights to use so that the public can identify that name with the sourcing quality of the variety.

In my experience as an attorney representing plant patent applicants and applicants for worldwide plant breeders’ rights, I have seen this mistake made more than once. When I have inherited files from a prior attorney or files that were handled by the breeder without counsel, I often see a name that looks like it would be a great trademark, but used in the plant patent application as a generic name; and then I know downstream frustrations will occur or already occurred, when the trademark application for that name is rejected because it is, by definition, a generic name. There are ways to fix this in the U.S., but the problem is an even bigger headache if the mistake is made under the international convention under which most other countries handle their plant variety rights.

Don’t Delay Your Filing Just to Disclose More – You Really Can Add It Later

Another common mistake, especially among applicants and attorneys who are more familiar with utility patents, is a belief that the application must be complete to obtain a filing date, and cannot be changed after the filing date. This is incorrect. It is possible to get a plant patent filing date with relatively little disclosure. For more details about that, click here. Likewise, it is possible, even very common, to add to the disclosure as part of negotiating the allowance of the application. Utility patents have strong prohibitions about adding “new matter” after the filing date, but adding a more complete description of a new plant variety, after the filing date, is not considered new matter, since it does not actually change the underlying thing being described (the plant variety itself). The goal is to describe it as completely and accurately as possible, and it is entirely permissible to file an application with some very basic information about the variety, and then supply more details later.

A variation on this mistake is filing what is intended to be a plant patent application, but filing it as a utility application. This is also something that has happened on some occasions when someone new to the process assumed that the two systems were the same, or were more alike than they actually are. The “formalities” required for plant patents, including fees and inventor declarations, are not the same as utility patent formalities. One of the first Cannabis cultivars that was the subject of an attempt to get a plant patent was originally mis-filed as a utility patent, which caused quite a lot of unnecessary delay and paperwork for the applicant. This is just one of those things someone who hadn’t previously filed a plant patent may not catch the first time around.

This misconception regarding how much you have to disclose to get a filing date can matter when some sort of commercial activities may put the patentability of the variety into question. Suppose a commercial sale of a large order of plants (clones) of the variety is about to be made, but someone has the mistaken notion that they need to have the complete, detailed information about the variety in order to be able to file the application. This would either unnecessarily delay the sale, pending the filing of the complete application, or it would cause the owner of the variety to believe that it is necessary to forego patenting in order to not delay the sale. In reality, it is usually possible (if not ideal) to file a plant patent application within a few days of deciding it needs to be done.

Know Your Deadlines and What Creates Them

This timing issue is a form of the third mistake — not realizing that a plant patent application can be filed even before all of the information that will eventually be required for allowance is available. The other form of the third mistake is filing too early. As noted in this post, developing a new variety takes a long time, and some of that time may involve test-growing the plants in various settings, trialing harvested material, even selling harvested material. If the breeding and commercialization team does not understand what leads to loss of novelty (public availability of asexual propagating material of the variety), and what does not (e.g., sale of harvested material*), the team can make the mistake of filing the plant patent application too early. Why would that matter? Because the patent will expire 20 years after the filing date, so filing no earlier than necessary will result in a longer practical term of protection.

Understanding what is unique about the plant patent system can help plant breeders and companies avoid these and other mistakes. So, to borrow a line from the notorious Christopher George Latore Wallace:

And If You Don’t Know, Now You Know

February 1, 2019/4 Comments/by Dale Hunt

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