Mystery Cannabis Litigation Theatre 2017: Future Enforcement of Pot Patents

Cannabis patent litigation
Noted cannabis patent expert

In previous posts, we’ve discussed how cannabis is patentable, and what these patents might mean for a cannabis business. Today, we peer into the not-so-distant future to imagine what a lawsuit to enforce a cannabis patent might look like. My research has discovered no such lawsuits filed to date.

Keep in mind that all patent infringement cases must be heard in one of the 94 federal courts, with very few exceptions. No non-federal trial or appellate judge has jurisdiction to decide any issue relating to patent infringement.  There are at least four major parts of a potential cannabis patent litigation in which the federal illegality of cannabis raises concerns: pleadings, discovery, proof/evidence, and remedies.

Pleadings: In the initial phase of a lawsuit, each party must detail its allegations in pleadings. A pot patent plaintiff will allege she owns a patent for a cannabis plant and that the defendant has infringed the patent by growing, selling, offering to sell, or importing the patented plant in the United States. Because a patent is merely a right to keep someone else from practicing the patent, the plaintiff needn’t plead anything about her own business, although there are good strategic reasons for her to do so. The defendant must then either admit or deny each and every allegation made by the plaintiff; there is no “no comment” option. In most cases, this means the defendant must plead, in substance: “I grow marijuana.” Pleadings are almost always publicly available, including to federal law enforcement. Though under past practice the Department of Justice has not prioritized cannabis enforcement in states where cannabis has been legalized, each set of pleadings will remain as a public record admission of criminal activity and therefore available to any DOJ attorney who wants to pursue such cases.

Discovery: In this phase of litigation, each party collects evidence to support its claims or defenses. One form of discovery allows a party to force the other party to admit or deny any fact related to the lawsuit, under oath. Here is an actual request I saw recently: “Admit that the products sold at [defendant’s cannabis shop] containing marijuana and/or cannabinoids are illegal under federal law.” It may be possible to plead the Fifth Amendment privilege against self-incrimination to avoid answering such requests. But if a defendant can “take five” to avoid admitting many of the facts a plaintiff must prove to show infringement of a patent case, how will cannabis patent plaintiffs enforce their patents as a practical matter?

Proof/evidence: In almost every plant patent trial, the plaintiff must hire an expert to provide an opinion that the patent applies to the plant accused of infringement. In a cannabis patent case, this means the plaintiff (or plaintiff’s counsel) must have the expert botanist or horticulturist analyze the accused cannabis product. That means the lawyer, or the client, or the expert, must possess or transport the cannabis product, which constitutes a federal crime.

What will happen if counsel or a witness tries to bring cannabis to the courtroom to use as evidence? Under some circumstances like drug prosecutions, illegal narcotics are introduced into evidence in federal court under highly restrictive conditions. But it is far from clear whether federal judges will routinely allow parties to a civil suit to bring Schedule 1 narcotics into a courtroom, at least without Congressional approval.

Remedies: The most common remedies in a patent suit are damages, e.g., lost profits or a reasonable royalty, and/or an injunction prohibiting further infringement of the patent. But will a federal judge be willing to order the losing defendant to pay over the profits from its illegal activity to the successful cannabis patent plaintiff? Will the judge enter an injunction relating to the sale of an illegal product?

If cannabis patents are so hard to enforce, we may wonder why the Patent Office grants them. The reason is that the PTO, an agency in the Commerce Department, is empowered to grant patents and cannabis is patentable. The Department of Justice, another department, is empowered to enforce criminal laws passed by Congress, including the CSA. The courts, in another branch of government altogether, hear patent cases, as well as criminal prosecutions. Isn’t federalism fun?

Cannabis patent litigation