Canadian company Canopy Growth Corp is suing British GW Pharmaceuticals in the US Western District Court of Texas, claiming GW is knowingly infringing on Canopy’s intellectual property. Canopy Growth filed the lawsuit in late 2020, almost immediately following the issue of US Patent No. 10,870,632 (US ‘632) on December 22nd, 2020.
The patent US 10,870,632 covers a method of CBD and THC extraction that uses CO2.
Claim 1 of the patent, Canopy Growth writes:
A process for producing an extract containing Tetrahydrocannabinol (THC) and/or cannabidiol (CBD), and optionally the carboxylic acid thereof, from a cannabis plant material or a primary extract thereof, said processing comprising:
(1) Subjecting the cannabis plant material or primary extract thereof to CO2 in liquefied form under subcritical pressure and temperature conditions to extract cannabinoid components; and
(2) reducing the pressure and/or temperature to separate tetrahydrocannabinol and/or cannabidiol, and optionally the carboxylic acids thereof, from the CO2.
Canopy Growth first acquired an earlier version of the patent, US Patent 8,895,078 (Oct 17,2000), when they purchased German company, C3 Cannabinoid Compound Company (founded by Bionorica SE). GW allegedly considered partnering with C3 in 2016 to utilize their cannabinoid processing. Although the deal didn’t work out, Canopy claims that this is evidence of GW monitoring the patent and using that knowledge to produce Epidiolex.
The formal complaint against GW is not about the drug itself, but the process by which it is produced. GW Pharmaceuticals produces Epidiolex, a near pure form of CBD prescribed to people with epilepsy and other seizure inducing conditions. Epidiolex was approved in 2018 and sells for $1,235 per 100ml bottle. The cost for patients is a gross price of $32,500 annually per patient. The lawsuit reads,“GW reported approximately $366 million in net product sales of Epidiolex in the United States in the first nine months of 2020.”
Canopy Growth alleges that GW Pharmaceuticals knowingly used the extraction method without licensing it from Canopy Growth. Canopy continues to allege that GW even attempted to block a European counterpart to the US ‘632 by filing its own version of the patent. The GW patent was rejected because it was preceded by the US patents ‘078 and ‘632. This is claimed as further proof of GW’s knowledgeable use of the CO2 extraction method.
Even though Canopy Growth One one of the largest cannabis producers in the world, it seems they are seeking to reign in on their patent and its unauthorized use, making an example of GW Pharmaceuticals is only the first step. GW has to prove that the patent is invalid for the case to be thrown out, which could prove difficult.
This is the first instance in which Canopy growth has enforced its patent and it could be a threat to the US cannabis industry should they win. Thousands of processors use the CO2 extraction method to produce THC and CBD concentrates. The Patent only lasts for less than 18 months, but canopy has complete exclusivity on the process until then. Anyone using this method of extraction can be at risk of litigation.
A case such as this sets a dangerous precedent for the cannabis industry should broad patents for extraction methods begin to be enforced. Once extractors know about the patent they are essentially at risk of the same problem as GW. (Sorry to the extractors reading this.) Canopy Growth can make extractors pay licensing fees to use the method of extraction. Larry Sandell, a patent attorney and litigator with Mei & Mark LLP, told Marijuana Moment,“Although there are steps that can be taken to reduce infringement liability risks, CO2 extractors may essentially have this anvil hanging over their head as the business continues on—at least until the patent expires or someone succeeds in knocking it out.”