By Shahnam Sharareh, ESQ, PharmD, RAC
March 19, 2020
With the passage of the 2018 Farm Bill, the hemp industry is experiencing exceptional growth with the prospect of becoming a multibillion-dollar sector within the next decade. As with any other science-based industry, long-term survival of the players in this sector will likely hinge on developing meaningful safeguards to protect technological advancements that offer a commercial advantage to the respective companies. A robust patent strategy is one option that hemp companies and entrepreneurs can rely on to maintain their competitive advantage in the industry as more and more companies are increasing their procurement and enforcement activities.
Patents develop legal barriers to protect innovative commercial products. The US Patent laws provide a statutorily recognized protection over novel, non-obvious, and useful inventions.These laws and related regulations collectively provide a mechanism by which owners can capture the intangible quality of their inventive concepts, conceived ideas, and business interests as of the date of the filing of the patent application with the US Patent and Trademark Office. So long as such concepts, ideas, or business interests meet the patentability thresholds, the owner and/or the inventor can maintain a governmentally sanctioned protection over them.
There are different types of protections that may be available to players in the hemp industry. Aside from patents, these include safeguards that are available under the Plant Variety Protection Act, Trademark or Copyright regulations. However, this article only provides a summary of patent strategies that one may employ to protect proprietary technologies.
Such technologies, which either directly or indirectly affect the company’s revenues, generally fall into three viable categories for which a patent may be obtainable. These include: (1) a new hemp plant variety patent, (2) patents covering compositions of matter, ancillary products and methods of using such compositions, and (3) patents covering manufacturing and related processes that would enhance the quality of products derived from hemp plant.
To that end, hemp companies and entrepreneurs must consider implementing internal procedures that would allow robust review of any potential inventions that can offer commercial value as they are being developed for timely processing and filing with respective patent offices.
1. Plant variety patents
Entrepreneurs in the hemp industry typically face two types of plant-related inventions that can be protected by a US patent. One is the plant itself, and the other is the ancillary products from the plant, such as devices, methods, systems and software that can improve various aspects of the utility of the plant. In the United States, whoever invents or discovers and asexually reproduces any distinct and new variety of plant, including cultivated sports, mutants, hybrids, and newly found seedlings, other than a tuber propagated plant (such as Irish potato and the Jerusalem artichoke), or a plant found in an uncultivated state, may obtain a plant patent, subject to certain conditions and restrictions. A plant patent protects a new variety of a plant, allowing the patent owner to exclude others from asexually reproducing the plant and from using, offering for sale, or selling the reproduced plant or any of its parts for 20 years. The term “asexual reproduction” refers to the propagation of a plant without the use of seed, however, the protection does not necessarily exclude plants that are capable of being produced either sexually or asexually.
As opposed to a utility patent that provides a protection for the ancillary systems or methods of products derived from the plant, a plant patent has a limited scope of protection directed to a single plant shown or described in the specification. To that end, a new and distinct variety of hemp plant can be patented, if distinct and non-obvious from its related family members.
The issued plant patent PP30,639 P2 has been reported to be the first U.S. Patent for a new and distinct hemp cultivar, designated as CW2A. As such, third party competitors would not be able to grow the same cultivar from a clone until expiration of the patent term, obtaining a licensing agreement, or successfully challenging the patent in the proper jurisdiction.
2. Composition of matter, ancillary products and Methods of Use thereof
Composition of matter, methods of use thereof, and other ancillary products (such as tools or systems that can enhance the cultivation of such plants) are better protected in a utility patent under 35 U.S.C. §101. Utility patents are the typical type of patent granted to novel, non-obvious, and useful compositions, products and methods of use thereof. The utility patent offers its holder the right to block competition from making, using, and selling the patented idea for up to 20 years from the date of filing a non-provisional application, thereby providing a competitive advantage in the owner or inventor’s respective industry.
However, there are challenges in obtaining products or services where the novelty of which may hinge on the laws of nature or natural phenomena. It is the long-standing view of the Supreme Court that laws of nature, natural phenomena or abstract idea are not patentable, because they are basic tools of scientific and technological work.As such, determining whether natural products or derivatives thereof or even services that are merely a derivation of an abstract mathematical process are of patentable subject matter, may prove to be challenging.
At least one hurdle in obtaining patents that cover a hemp-derived composition is to distinguish how such composition is patentable over what is the law of nature or a natural phenomenon. Depending on the nature of the composition, the process to establish patentability would likely require a showing of scientific data to establish that the invention is markedly different than the naturally occurring counterpart. In other words, it is significantly more than just a simple or routine application of the natural laws or events that would have been understood to those skilled in the field.
In an ongoing lawsuit, Pure Hemp Collective Inc. filed a motion for summary judgment raising this very issue against the patent holder United Cannabis Corporation. However, the claims that were directed to liquid formulations having at least 95% tetrahydrocannabinolic acid (THCa), cannabidiol (CBD), or combinations of THC, CBD, and CBD of its total cannabinoids, were held to withstand the court’s early eligibility determination. To that end, the Pure Hemp lawsuit illustrates that patent battles in this area are likely to appear sooner than expected.
Once it is determined that an inventive concept meets the patentable subject matter criterion, a timely filing of a provisional application may be necessary in order to allow the companies additional time to further complete the invention, while securing a priority date for the filing of a final utility application. Meeting the patent eligibility threshold is different from those for establishing novelty and non-obviousness standards of a patent. Nevertheless, the rationale can overlap in some aspects.
Provisional patent application filing allows an inventor to secure a filing date by describing the invention, without meeting some of the formal requirements such as having a patent claim or an oath or declaration. The application has a pendency time of 12 months and by itself, it cannot become a patent unless it is converted to a utility non-provisional application. A non-provisional application undergoes the full examination by the US Patent and Trademark office or other jurisdictions for merits and ultimate issuance of a patented claim.
The novelty and non-obvious standards are essential requirements for obtaining a patent. In general, an invention is novel, meaning that it is new and has not previously been in the public domain. Similarly, an invention is non-obvious when it could not have been obvious to a person having ordinary skill in the art to which the patent is addressed. Any public use and knowledge, as well as other types of public disclosures, are referred to in patent jargon as “prior art,” which can be used against patentability of an invention. Since the hemp industry as a whole has been under legal scrutiny for some time, finding the proper prior art and determining the strength of such prior art in order to raise a novelty or non-obviousness issue may impose challenging times for the examining core of the USPTO. Regardless, patent application filing rates are expected to grow for hemp and hemp-derived products.
3. Methods of Manufacturing and optimizing plant growth
The current trends in the hemp industry’s patent filing, particularly with respect to CBD containing products, relate to extraction and purification methodologies that enhance the quality of the hemp-derived cannabinoid compounds. Despite the expected mature body of knowledge about hemp and cannabis growth, unique and new extraction and manufacturing processes that could enhance product safety are a viable option to pursue for hemp-derived products. The path to obtain protection substantially mirrors the same as those for material compositions and product claims. The key difference is the extent of disclosure that could maximize competitive edge.
As the hemp industry grows towards its expected potential, developing a patent strategy to maintain competitive advantage and further expand research and development in this sector should become an integral action of the players involved. As more and more companies are increasing their procurement and enforcement activities, maintaining a competitive advantage would call for a robust patent strategy in not only navigating around third party patent portfolios, but also maintaining commercially sustainable pipeline.
About the Author: Shahnam Sharareh, ESQ, PharmD, RAC
Shahnam is a registered patent attorney who advises global pharmaceutical, agricultural, and other life science and technology companies on all aspects of patent portfolio development, analysis and appeals, as well as post-grant proceedings and intellectual property transactional activities. He has prepared and prosecuted more than 1,000 U.S. and international patent applications and, as a former patent examiner for the U.S. Patent and Trademark Office, provides customized approaches to his clients in a wide range of technologies, including chemistry, pharmaceuticals, pharmacology, biotechnology, medical diagnostics and cosmetic products. He has also appeared before the Patent Trial and Appeal Board in a number of proceedings on behalf of his clients.
As a Regulatory Affairs Certified (RAC) professional, Shahnam utilizes a strong understanding of the regulatory framework of cannabis and hemp-derived CBD products to advise clients on FDA regulatory matters, marketing and advertising strategies for drug and dietary supplement products. Prior to entering the legal field, Shahnam was a research associate with Kendle International, where he monitored FDA-required regulatory and clinical data during the Celecoxib clinical trials. Shahnam is also a licensed pharmacist in Maryland.
 35 U.S.C. §§ 101, 102, 103, and 112  See 35 U.S.C. §161  See Association for Molecular Pathology v. Myriad Genetics, Inc. 569 U.S. 576 (2013). See also Alice Corp. Pty. V. CLS Bank Int’l., 573 U.S. 208, 216 (2014)  See 2019 WL 1651846; Note from the editor: see https://www.cannabisbusinesstimes.com/article/ucann-pure-hemp-lawsuit-analysis-intellectual-property-knobbe-martens/for a brief discussion of this case.  See 35 U.S.C. §111(b).