Recently, Aurora (ACB) and 22nd Century Group (XXII) have made several comments highlighting their existing ties through intellectual property and intention to defend against infringing parties:

“Aurora’s connection to the biosynthetic production of cannabinoids originated with early work carried out by the Company’s former Chief Science Officer on the discovery of key genes within the cannabinoid biosynthesis pathway. Through licensing agreements, Aurora and sub-licensee 22nd Century Group together share the global IP rights to commercialize key aspects of cannabinoid biosynthesis in plants and microorganisms. The two companies are working closely to enforce their IP against infringing parties, as well as to actively explore commercial development opportunities.”

This announcement has been a long time coming, the vast majority of companies claiming they’ll have saleable product this fall does not match the number of companies that have demonstrated they’ve circumvented these patents. The only company that has shown they can circumvent existing patents through publication of their own patent applications is Cronos ($CRON). Several companies in the USA and Canada have published patent applications with wording that includes use of at least one of those patented steps. Some of these companies have very close ties to each other through their founder and management.

The details of how the legal proceedings will play out is a mystery to me. Aurora owns all the patents and 22nd Century Group has exclusive rights to the USA patents and co-exclusive rights to the patents covering the rest of the world except Canada for the lifetime of the patents (Aurora has exclusive rights to the patents in Canada). Companies potentially infringing on these patents, that I’m aware of, operate in Canada or the USA. It’s possible Aurora and 22nd Century Group are partnering to file lawsuits against companies separately in both regions at the same time.

Once the lawsuit/s are made public, I’ll provide more detail on who they’re targeting and potentially more details on the partnership to litigate.

The preceding is the opinion of the author, and is in no way intended to be a recommendation to buy or sell any security or derivative. The author holds no position in Aurora Cannabis or Cronos Group. The author has a position in 22nd Century Group.