MarkIt to Market® - January 2021: Watching the Pot™

Sterne, Kessler, Goldstein & Fox P.L.L.C.

CBD Extraction Showdown: Canopy Growth Sues GW Pharma

In a patent showdown between two high-profile players in the emerging cannabis industry, Canadian corporation Canopy Growth has sued UK-based specialty pharmaceutical company GW Pharmaceuticals over a utility patent directed to CBD extraction technology.[1] In its complaint, filed in the Waco division of the Western District of Texas, Canopy alleges that GW practices its CBD extraction invention to make GW’s landmark pharmaceutical for treating certain forms of epilepsy, Epidiolex. As we have previously reported, Epidiolex is the first FDA-approved cannabis-derived pharmaceutical for treating certain forms of epilepsy and has become a working model for how to bring cannabis-derived therapies to market in the United States.[2] [3]

The suit is notable both for its choice of venue and that it marks the beginning of patent-related confrontations between powerful players in this dynamic and emerging industry. The venue is notable as part of a broader trend in patent enforcement to bring suit before Judge Alan Albright, whose default rules keep patent disputes moving quickly and on a predictable timeline towards claim construction and trial. This speed and predictability has a unique interplay with patent challenges before the Patent Trial and Appeal Board (PTAB).[4] As for the implications of this case for the cannabis industry, stay tuned for insights from us as this litigation unfolds!

[1] Canopy Growth Corp. v. GW Pharmaceuticals PLC, Case No. 6:20-cv-01180 (W.D. Tex. Dec. 12, 2020).
[2] Pauline Pelletier, Deborah Sterling, and Monica Riva Talley, IP’s Developing Role In Cannabis Business Strategy, (Law 360, June 2019).
[3] According to the complaint, Epidiolex costs $1,235 per 100mL bottle and GW reported approximately $366 million in net product sales of Epidiolex in the United States in the first nine months of 2020.
[4] Apple Inc. v. Fintiv, Inc., Case IPR2020-00019, Paper No. 11 (P.T.A.B. Mar. 20, 2020) (precedential).

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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