The District of Colorado’s decision to uphold UCANN’s claims as eligible is an important development for those who own or are pursuing patent claims in the cannabis space.

On April 17, 2019, the Federal Court in the District of Colorado denied Pure Hemp’s motion to dismiss United Cannabis Corporation’s (UCANN) patent for failing to claim “patentable subject matter.” The decision is the first 35 U.S.C. §101 challenge to the patent eligibility of liquid cannabis formulations, but is hardly surprising given the clear precedent for the patent eligibility of purified formulations of natural products, such as those historically granted for pharmaceutical products.

The claims of UCANN’s U.S. Patent No. 9,730,911 all recite “[a] liquid cannabinoid formulation, wherein at least 95% of the total cannabinoids is” a specified cannabinoid (CBD or THC or a combination). Pure Hemp argued that the claims are directed to a “natural phenomenon,” “abstract idea” or “law of nature,” and therefore are not eligible for patent protection in light of the Supreme Court’s decision in Alice Corp. Pty. v. CLS Bank Int’l, 573 U.S. 208, 216 (2014). Judge William Martinez disagreed with Pure Hemp and agreed with UCANN:

UCANN counters that “the claims are not directed to laws of nature or natural phenomena because they claim human-modified liquid formulations that require converting solid cannabinoids into a different state with markedly different physiological characteristics.” UCANN’s counterargument contains two components: (1) the liquid formulation itself, which is supposedly novel; and (2) the alleged “markedly different physiological characteristics” of the liquid (which the Court takes to mean physiological effects—a liquid does not have a physiology).

According to Judge Martinez:

It may be true, as Pure Hemp insists, that… it is logically possible that cannabinoids in nature might appear in a form that could, in some sense, be deemed a “liquid.” Even accepting as much, the 911 Patent specifies threshold concentrations of cannabinoids and related chemicals. Pure Hemp nowhere claims that these precise concentrations, or anything close to them, occur in liquid form in nature. Accordingly, UCANN’s claims are not restatements of “the handiwork of nature.”

Importantly, the court was not asked to consider the validity of these patents on all grounds—only on the challenged ground of patent eligibility under §101—and offered the following commentary: “[t]o be clear, the Court sees reason to question whether the 911 Patent claims anything novel, useful, or nonobvious.”

The District of Colorado’s decision to uphold UCANN’s claims as eligible is an important development for those who own or are pursuing patent claims in the cannabis space, in that the court did not deviate from precedent for purified natural products, and because it is in Colorado where more patent owners are expected to sue for infringement.

Duane Morris will continue to monitor UCANN’s infringement action and Pure Hemp’s defense.