A few days ago Canopy Growth Corp filed a lawsuit claiming patent infringement by GW Pharmaceuticals, related to the extraction method they use to create their Epidiolex formulation. The patent lawyer who posted this on twitter gave his perspective on the suit, talking about implications related to the location of the filing and how this could impact extraction in the cannabis industry.

When reading the suit and patent I focused on what Canopy has patented and what they’re claiming in the suit. This is the overview of how Canopy believes GW Phama is infringing on their patent:

“On information and belief, the success of GW’s  Epidiolex is based, at least in part, on GW’s use, without authority, of the CO2 extraction process  described and claimed in the ’632 Patent, which enables the production of a CBD-rich extract from  cannabis material.  

15. On information and belief, GW is aware, or should be aware, that the  extraction process it uses to manufacture Epidiolex infringes the claims of the ’632 Patent.  Although the ’632 Patent recently issued, on information and belief, GW has been monitoring the  ’632 Patent family for over fourteen years. In May 2006, for instance, GW proactively challenged  the issuance of a European counterpart application (European Patent No. EP 1 326 598) by filing  an opposition before the European Patent Office. By the time GW filed its opposition, the parent application of the ’632 Patent—U.S. Patent Application No. 10/399,362, which issued as U.S.  Patent No. 8,895,078 (the “’078 Patent”)—had already been filed. In light of its monitoring and  proactive steps to invalidate a European counterpart, GW knew, or should have known, of the  existence of the U.S. counterpart applications in the ’632 Patent family. 

16. Notably, on information and belief, GW in 2016 considered using Canopy’s  predecessor in interest, Bionorica—an early pioneer of CO2 extraction techniques—as its  processor for extracting CBD. By this time, the ’078 Patent had already issued and the application  that ultimately issued as the ’632 Patent had been filed. Although that deal did not materialize,  these negotiations further evidence that GW has been aware of the patented processes described  and claimed in the ’078 and ’632 Patents for many years. Indeed, in 2017, GW declined a license  to the ’078 Patent. This case is not about restricting patient access to Epidiolex. Rather, Canopy  brings this action to put a stop to GW’s knowing and unauthorized use of Canopy’s intellectual  property. “

For me, these two questions are the most important when it comes to this suit: Is GW Pharma using an extraction method that infringes on Canopy’s patent? Will Canopy’s patent hold when scrutiny is applied, are there examples of prior art? The former question will be answered as this suit plays out, Canopy has presented evidence to why they believe GW Pharma is using the extraction protocol, GW Pharma will likely reveal what protocol they’re using in the proceedings. The latter question may not be addressed in this suit, it may come up separately if someone tries to invalidate Canopy’s patent. What information gets presented and how depends on how GW Pharma responds to this suit.

This is all I have to say on the lawsuit right now, I will provide more commentary as information becomes public. Without knowing GW Pharma’s extraction protocol it’s hard to evaluate infringement, which is why you see the phrase ‘on information and belief‘ so many times in the suit.

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 Canopy Growth Corp or GW Pharmaceuticals.