Every knowledge-intensive industry is based on patents. In the cannabis industry, however, there is a problem with this fundamental assumption. The effects of cannabis have been known for hundreds of years and the composition its some of its active ingredients were discovered decades ago in academic institutions (mainly the Hebrew University of Jerusalem). What unique knowledge can be acquired in the field, and how can it be protected?
Intellectual property in cannabis will soon reach the US courts for the first time. Last July, Colorado-based Cannabis Corp. sued a company named Pure Hemp Collective, a women's collective, also based in Colorado, alleging that its formulation for treatment of irritable bowel syndrome with cannabis extract with a high concentration of CBD violated its patent. Pure Hemp's main argument is that the knowledge about the effect of a high concentration of CBD already existed when the patent was registered. In order to prove that the knowledge is not new, however, prior documentation must be produced. With cannabis, there was little documentation over the years of the trials of the various compositions by most of its consumers - for obvious reasons.
Dr Ronnie Benshafrut, senior partner and head of department in charge of patent term extension, nanotechnology, and cannabis at Reinhold Cohn, is an expert in medical cannabis. Surprisingly and perhaps a little against his own interests, he believes that not all of the companies in the sector need to register patents.
Cannabis patents are a unique area. "It's a natural material," Benshafrut says. "People have been consuming it for hundreds of years, which has become an obstacle to its development. Companies that base their business on intellectual property, such as drug companies, don't always know what to do with natural materials."
Furthermore, the field of cannabis patents is already fairly crowded with companies, some of which have deep pockets. "Companies that want to enter the sector should know what awaits them," Benshafrut says. He described to "Globes" the players in the sector and how Israel fits into it.
The number of medical cannabis patents registered by drug companies began to rise late in the previous decade, and these companies still hold the largest number of patents in the sector. Most of their patents protect specific molecules produced from the cannabis plant, and are the only material in the treatment. They have also registered patents for specific formulations of the plant, and for treatment methods. "It's not the richest intellectual property in the world, but they definitely have some holdings in the sector," Benshafrut says.
Pharma companies do not usually develop cannabis products themselves because of the reproducibility problem - it is difficult to obtain the exactly same result every time a material is used. Every cannabis plant has a slightly different composition of active ingredients. The composition of active ingredients in the bloodstream depends on the freshness of the plant, growing conditions, type of extract (oil or powder, for example), and force of inhalation (cigarette or vaporizer). Drug companies prefer to sit on the sidelines until the reproducibility problem is solved and they can tell doctors that if a tablet is consumed in such and such a way, they will get such and such a level of active ingredient from the plant in the bloodstream that will have such and such an effect.
At the same time, the fact that the drug companies are not developing the plant by themselves does not necessarily mean that they will not file a lawsuit if another company achieves success while violating one of their patents.
British drug company GW Pharmaceuticals is one of the strongest players in the sector because it developed a cannabis-based drug on the usual drug development track. The company isolated one of the ingredients in cannabis and made it into a drug that originates in the plant, but has a uniform chemical mix. Benshafrut says that another thing that GW did was to register many patents - for each connection between an active ingredient in cannabis and a specific disease.
"In effect, GW created an 'contaminated' base of intellectual property in the sector. One of the risks facing any company operating in the cannabis field today is that one of GW's patents will blow up in its face," Benshafrut says. "For the time being, the company has not been behaving like a patent troll and it does not sue every company in the field, but what will happen later is unpredictable. It can wait in darkness and then sue. I sometimes wonder why the guillotine hasn't dropped yet, because there is no doubt than many companies in Israel and elsewhere are violating GW's patents, but patent lawsuits are apparently not its business model."
There are two other interesting players in the patent sphere: institutions of higher education, headed by Hebrew University, which has registered several patents for its discoveries, and a non-profit organization named OCD, which could help cannabis companies in future lawsuits against them. The organization has assumed the task of identifying all of the existing information about cannabis that is not patent-protected, for the purpose of publishing it, thereby preventing any specific party from claiming the discoveries for itself in the future or in retrospect. Every piece of information in OCD's database signals another patent that cannot be registered.
Cannabis companies will be able to use this database a a tool for eliminating patents belonging to GW or the large drug companies, if they can prove that no new knowledge is involved.
Israel losing its unique knowledge
In Israel, most of the companies operating in the cannabis field have no patents at all, because of the way the market developed - it came from agriculture. "The farmers developed the species and growing methods. They gradually accumulated knowledge about the compositions or species suitable for various patients, and how each patient should consume the product," Benshafrut explains. "This knowledge, however, is unprotected. It worked fine up until now, but when new competitors enter and they want to expand overseas, problems could occur. Large investors don't like entering a field with unprotected intellectual property."
What can be done? "The answer is not exactly clear," Benshafrut answers. "In certain areas, I do ask myself whether it's at all worthwhile for companies to register patents. In other areas, unique knowledge has been acquired that is not protected by others, in personalized medicine, for example. Companies that have been operating in cannabis for a period of time in Israel have already accumulated databases, or their representatives at least have oral information about the suitability of species, delivery methods, ingestion times, etc. for various patients with different characteristics and various diseases. For example, if a patient says, 'It makes me nauseous,' they tell him, 'Take drops only at night,' or they offer a different delivery method.
"GW, on the other hand, matches the specific composition of materials to a specific disease, and hasn't really touched its patents in personalized medicine. It does not itself distinguish between a woman, a man, a woman during her period, a woman undergoing menopause, and children. It is possible that if an algorithm can be devised for doctors telling them how to prescribe the product. The algorithm can be protected, but it can also be protected as a commercial secret."
Israel also has unique knowledge in botanical technologies, Benshafrut says. "Not all of these technologies are patent-protected. Today, they are a commercial secret of the companies in the sector. Our problem is that the Israeli companies that were not allowed to export cannabis established activities in other places, and they are teaching the local farmers the secrets in exchange for percentages of the foreign companies. That is their right, of course, and as a business move it makes sense for them, but it means that the know-how, which was unique to Israel, is going to growers from other countries. This affects our competitiveness, and not only in cannabis. This knowledge is being sent to Canada. It is being given away even as we speak."
Published by Globes, Israel business news - en.globes.co.il - on February 3, 2019
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