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The cannabis patent dilemma

Shadow WatchAs the cannabis industry is embraced by corporate power and finance capital, the patenting of strains, products and applications is an increasing concern. But the international patchwork of legality makes for a confusing environment. Illegality has served as a paradoxical break on privatizing of varieties. Growers and advocates are devising means to protect the genetic commons in the new cannabis order.

Even amid quickly expanding legal and cultural space for cannabis, the burgeoning industry is grappling with how to secure intellectual property rights in a still clouded regulatory atmosphere. And as that atmosphere slowly becomes clearer, small growers are rising to the challenge of securing their own rights to continue cultivating strains that have long been part of the genetic and intellectual commons.

In a case that exemplifies the persisting dilemmas, a federal court in California ruled last month that cannabis edibles cannot be patented due to federal prohibition. As Food & Beverage Litigation Update reports, the San Francisco-based court for California's Northern District rejected a trademark infringement claim in Kiva Health Brands LLC v. Kiva Brands Inc. In the litigation, Kiva Brands Inc (KBI) and Kiva Health Brands (KHB) disputed rights to the "Kiva" trademark. KBI asserted ownership stemming from a predecessor company selling cannabis-infused edibles under the name in California since 2010. But the court said no dice.

In contrast, a high-CBD strain was just patented, a rarity we may be seeing more of now following hemp legalization under last year's federal Farm Bill. As JDSpura legal affairs blog reports, the US Patent & Trademark Office (USPTO) awarded "what appears to be the first patent for a hemp strain" to Denver-based Charlotte's Web Holdings (CWBHF). CWBHF obtained US Plant Patent No. PP30,639, listing CEO Joel Stanley as an inventor of the  "new and distinct hemp cultivar designated as 'CW2A.'" The THC content of CW2A is below the 0.3% threshold, thus meeting federal classification as "hemp."

In the United States, there are three kinds of patents: utility patents, for a process or application of particular products; design patents, generally for industrial products; and plant patents, for new varieties of plants. In 2017, a Nevada-based firm with the slightly presumptuous name Cannabis Sativa Inc did win a plant patent for a strain called Ecuadorian Sativa. But the firm boasted of its high content of the terpene limonene, and its possible curative capacities for various ailments—not of THC. Based on the plant patent, the company was later able to procure a utility patent for a lozenge based on the strain. But this one of the few cannabis patents that have been granted in the US.

The federal bureaucracy is starting to catch up with the law following passage of the 2018 Farm Bill. The USPTO in May issued guidelines for trademarks on CBD products, while the US Agriculture Department (USDA) is preparing to recognize intellectual property in hemp varieties.

As a step toward this aim, USDA is starting to oversee studies into the implications of widespread and regulated hemp cultivation. Virginia Tech university recently announced a $500,000 grant from the USDA to research the dissemination of pollen from genetically engineered (GE) hemp and switchgrass, using drones and mathematical models. This question has implications for maintaining the purity of agricultural strains, which is particularly critical with patented or GE varieties. (Dissemination of pollen can also have potential health and environmental impacts; a similar study is underway in Colorado regarding how terpenes behave in the atmosphere—but here the federal government has failed to provide funding due to the illegality of the high-THC varieties in question.)

At the international level, hemp strains are already being registered with the Geneva-based International Union for the Protection of New Varieties of Plants (UPOV).

But Canada, hardly surprisingly, is where those seeking to patent products, strains and application that involve THC. And the applicants are increasingly globe-spannning corporations, Seven of Canada’s top 10 cannabis patent holders are major multinational pharmaceutical companies, according to a recent study jointly undertaken by Washington DC-based cannabis industry analyst New Frontier Data and London-based cannabis biotechnology firm Grow Biotech.

The study named the top three holders of Canadian-registered cannabis patents as Switzerland's Ciba-Geigy (renamed Novartis following a 1996 merger with Sandoz, although the patents appear to be in the name of the old company) with 21, New York-based Pfizer Products with 14, and the United Kingdom's GW Pharma with 13. 

Cannabis edibles were just legalized in Canada last week, although the law will not take effect for 60 days, to put a licensing regime in place, as Toronto City News reports. So Oakland-based Kiva Brands may soon be looking to the Great White North to finally establish its trademark claim.

Corporate cannabis: Monsanto marijuana?
Starting with the failed California legalization bid Prop 19 in 2010, we've seen the strange phenomenon of "Stoners Against Legalization"—cannabis users and growers who viewed the initiative (and the successful Prop 64 six years later) as a plot by Monsanto and other big corporations to corner the cannabis market and squeeze out independent growers with bio-engineered patented varieties.

These fears were fueled by rumors that the Drug Enforcement Administration was granting big corporations licenses to grow cannabis for research. But that same year, the USPTO shelved consideration of trademarks for medical marijuana products. Hopes had been raised by the USPTO's creation in April 2010 of a new trademark category: "Processed plant matter for medicinal purposes, namely medical marijuana." Applications for trademarks were quickly filed.

"It looked like a positive step to me. We don't have many steps by the federal government legitimizing medical cannabis," Steve DeAngelo, executive director of Oakland's flagship dispensary, Harborside Health Center, told the Wall Street Journal. But that July, the USTPO did an about-face and nixed the plans.

A lot has changed in the nine years since then, and the DEA this August announced plans to expand permitted cannabis research. The agency's letter announcing the move stated: "Over the last two years, the total number of individuals registered by DEA to conduct research with marijuana, marijuana extracts, derivatives and delta-9-tetrahydrocannabinol (THC) has increased by more than 40 percent from 384 in January 2017 to 542 in January 2019. Similarly, in the last two years, DEA has more than doubled the production quota for marijuana each year based on increased usage projections for federally approved research projects."

The bizarre contradiction of federal policy is illustrated by the fact that in 2003, the US Department of Health & Human Services secured a patent—number 6630507—for the use of cannabinoids (not including THC) as antoxidants and neuroprotectants. Yet just three years later, an FDA memorandum reiterated the official position that cannabis has "no medical value.

The 'open-source' alternative
It's an irony that until very recently—and to an extent still—the illegality of cannabis has served as a break on its privatization by corporate interests. Jerry Whiting of Seattle-based LeBlanc CNE, which develops and markets CBD products, has drawn up what he calls an "open-source alternative licensing schema" under the title Cannabis Breeders Rights. It lists different categories, such as "grow & harvest" only or "cloning allowed." 

This system is based on terms agreed to by vendor and purchaser, rather than patents. "Nobody has the right to patent the Garden of Eden," Whiting told Cannabis Now. "No one owns nature. The rest is just courtroom bullshit."

Whiting is open to the patenting of individual strains really developed by a particular party, such as Charlotte's Web. He has considerably less patience for broad "utility patents"—those for a particular application of  cannabis, or any other plant. "You can't say you’ve done all the work necessary to establish use of cannabis for headaches. That's not worthy of government protectection. These patents are unenforceable in most cases, but nobody can afford the lawyers to go after them."

Whiting's alternative licensing proposal is partly inspired by “Berkeley Standard Distribution," the norm adopted by computer engineers in the '90s that established UNIX-based operating systems as open-source. "A lot of the software that runs the world today is not under commercial license," he says.

He contrasts the model pursued by firms like Oregon CBD Seed Company, which sells under a "material transfer agreement," noting the company's "pending patents" and imposing legally binding restrictions on how the seed may be used. "They can send lawyers into my field because their pollen drifted," Whiting says. "And their agreement only allows you to grow and harvest, which means you have to go back to them and buy seeds every year. You buy it with strings attached."

Breeders and growers are stil wrestling with how to assert their traditional rights in the increasingly corporate-dominated environment. The Open Cannabis Project, an Oregon non-profit that sought to protect the cannabis genome from corporate privatization, has been suspended following controversy concerning the supposed proprietary ambitions of its for-profit partner, Portland-based Phylos Bioscience.

"Breeders haven't adopted to the new world order," Whiting says. "Now, if I sell you a 10-pack of seeds, I made 120 bucks, and you can make 120 million. if breeders want residuals they need a framework." And his proposed framework is also designed to protect the rights of small growers who do not have access to economies of scale.

Whiting's "end-user license agreement" would establish the “prior art” of a particular cannabis strain—that is, evidence that it is already in wide use and can't be privatized. "My wishes going forward are that these strains are never to be owned by anyone. As long as it's being used by seed-savers in backyards, it’s free." 

Cross-post to Cannabis Now

Photo by Hammer51012  

 
 

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