IP Litigation In The Cannabis Industry: A Review Of The Limited Authority In Canada Thus Far

As the day draws near to the legalization of recreational cannabis in Canada, so too does the birth of a new and significant industry. Arguably, Canada has been headed in this direction for close to 20 years. Some would point to the 2000 decision of R v Parker1—in which the Ontario Court of Appeal declared the marijuana prohibition in the Controlled Drugs and Substances Act to be invalid—as the first in a long line of dominos to fall in the path to legalization.

Whereas to date the majority of cannabis related case law has been in the area of criminal law, once the competitive market officially opens, participants should expect that disputes will arise for adjudication in the civil context. Intellectual property rights will play an important role in shaping the competitive landscape as the industry matures and competitors seek to establish their places in the market.

Litigation is inevitable.

Indeed, United Cannabis Corporation recently launched the first "cannabis" patent infringement action against Pure Hemp Collective Inc in the US,2 relating to a patent for liquid formulations of highly enriched extracts of plant cannabinoids. The case was commenced in the US District Court for the District of Colorado on July 30, 2018, and is sure to be closely followed as it progresses. Canada however, has already seen a handful of cannabis related intellectual property disputes decided by the courts and quasi-judicial bodies. In this paper, we discuss the small number of reported decisions to date and draw some inferences as to what future litigation may hold for the industry.

Patent Infringement

Patents represent a potentially fertile area for cannabis related litigation. Although plants themselves are not patentable3, many other related technologies are. As reported here,4 patent protection is available for genetically modified cannabis plant cells as well as novel isolated genes that produce cannabis active agents. Patents are also available for: 1) novel or modified active ingredients extracted from the cannabis plant or chemically synthesized; 2) novel formulations comprising cannabis active agents such as patches and gels or new combinations of ingredients; 3) new uses of the cannabis or cannabis extracts for example new indications that were not previously treated with cannabis products; 4) new methods of extracting cannabis active ingredients from the plants; and 5) new devices for delivery of the cannabis products, such as vaporisers and patches.5

So far, litigation in the area has been scarce with only one reported decision from proceedings commenced in 2008: Delp v Fresh Headies Internet Sales Ltd.6 Fresh Headies involved a patent for a method and apparatus for extracting resins from plants. The plaintiff sued for infringement, and following examinations for discovery faced a motion for summary judgment. The defendant moved on the basis that the claims included apparatus that would not work and therefore lacked the required utility for a patent. The Court disagreed and dismissed the motion. The proceeding was ultimately settled and discontinued in 2014.

If Fresh Headies is any indication, litigation involving cannabis related patents should be expected to proceed like cases involving any other technology. One nuance that cannabis patents may present, however, could relate to the...