Cannabis, psilocybin, MDMA, and many other psychoactive drugs remain Schedule I Drugs under the Controlled Substances Act. They remain explicitly illegal at the federal level, and the FDA describes these drugs as having “a high potential for abuse and the potential to create severe psychological and/or physical dependence.”[1] Despite this, legalization efforts at the state level continue to be successful, with little to no resistance from the federal government. What started in the late 1990’s as a push for legal medical cannabis in western states such as California progressed to include recreational cannabis. In 2020, voters in Oregon approved decriminalizing psilocybin, and in 2022 voters in Colorado approved the most expansive legalization efforts yet for psychedelics, approving a ballot measure that legalized DMT, ibogaine, mescaline, and psilocybin.[2]
Companies that manufacture these drugs have grown tremendously over the past few years, even though the drugs they produce and distribute are federally illegal. Despite the tension between states that legalized these drugs and their illegal federal status, for the most part, the federal government implicitly (and occasionally explicitly) tolerates states legalizing these drugs. States also often require companies that manufacture or distribute these drugs to be licensed by the state. With only a limited number of these licenses being granted in each state, operating and owning these businesses becomes incredibly lucrative. These companies, of course, would like to protect their valuable intellectual property assets relating to the manufacture and distribution of these drugs. Specifically, they would like to use the federal intellectual property framework, including patent protection, to exclude even more potential competitors from entering this industry.
It is somewhat surprising that it is possible to obtain a patent on a Schedule I drug, regardless of their status under the Controlled Substances Act. In fact, the number of patents related to medical cannabis has skyrocketed over the past few years, not just in the United States, but across the world. These patents can be related directly to the drug itself, or manufacturers can also attempt to obtain a plant patent for new drugs derived from plants such as cannabis or psilocybin. More commonly, however, the patents are related to technologies that are closely related to the manufacture, extraction, or refinement of these drugs. While some of these drugs have been widely used for hundreds of years, technologies related to the mass production and pharmaceutical-grade purification have advanced substantially. Manufacturers, understandably, would like protection for these technologies. Assuming their patent applications pass the normal hurdles to getting a patent–such as novelty and non-obviousness–the USPTO does grant patents related to Schedule I drugs.
The more critical question is whether it is possible to enforce these patents in federal court. Some believe that Schedule I drug patents should not be enforceable in court due to the illegality doctrine. The illegality doctrine arises out of English Common Law and was first clearly articulated in Holman v. Johnson.[3] The gist of the doctrine is that one cannot seek relief from the courts if their own cause of action is in violation of the law. There is considerable debate on whether this doctrine is relevant to patents of Schedule I drugs.[4] Some believe that because a patent is not an affirmative right, but instead a right to exclude others, the doctrine should not apply in these cases.[5]
American Courts have not had many opportunities to weigh in on whether these patents are valid and in fact enforceable. There have been a handful of cases where patent owners claimed their Schedule I drug patents were being infringed on, but none have yet gone to trial. One notable case did reach a Markman hearing, but was voluntarily dismissed by the plaintiff following the results of that hearing.[6] There is currently a pending case, Gene Pool Technologies, Inc. v. Coastal Harvest, LLC, concerning patents on cannabis extraction.[7] The district court recently denied a motion to dismiss from the defendant that did, in fact, cite the illegality doctrine.[8] The court’s denial of the motion to dismiss was brief and did not make any remarks regarding the potential validity or invalidity of the defendant’s illegality defense.[9] The case is currently scheduled for trial in October 2023 and will be the first time a federal court rules on infringement regarding a Schedule I drug patent.[10]
Other forms of intellectual property protection for Schedule I drug manufacturers offer uncertain prospects, as well. The trademark statute requires that the goods being trademarked are “used in commerce,” which has been interpreted to mean use of lawful commerce, which does not include the Schedule I drug market. This has made getting trademarks for the drugs themselves quite difficult, but it is still possible to obtain trademarks on devices and products that are ancillary to the drugs themselves. Trade secret protection is also theoretically available for Schedule I drug secrets, but similarly to patents, these may face illegality doctrine questions and have not yet been brought in state or federal court.
Overall, it is unclear how much protection the United States intellectual property system offers manufacturers of Schedule I drugs, though there may be some answers on the horizon. The tension between state decriminalization and the unenforced federal prohibition creates numerous challenges for these companies beyond just intellectual property, from tax regimes to insurance. Until it is conclusively resolved by the federal government, they will have to continue to contend with uncertain protections and questionable enforceability.
[1] Drug Scheduling, UNITED STATES DRUG ENFORCEMENT ADMINISTRATION, https://www.dea.gov/drug-information/drug-scheduling (last visited January 14, 2023).
[2] Andrew Jacobs, Legal Use of Hallucinogenic Mushrooms begins in Oregon, N.Y. TIMES, Jan. 3, 2023, at D1; Jennifer Brown, Colorado becomes second state to legalize “magic mushrooms”, COLORADO SUN, Nov. 9, 2022, https://coloradosun.com/2022/11/09/proposition-122-colorado-results-psilocybin-mushrooms-2/.
[3] 1 Cowp. 341, 343 (1775).
[4] Rob Cerwinski, Brett Schuman, Daniel Mello & Nikhil Sethi, INSIGHT: Why the Illegality Doctrine Shouldn’t Apply to Cannabis Patents, BLOOMBERG LAW, Jan. 17, 2020, https://news.bloomberglaw.com/ip-law/insight-why-the-illegality-doctrine-shouldnt-apply-to-cannabis-patents.
[5] Id.
[6] Solomon Israel, Court tosses Canopy cannabis patent infringement lawsuit against GW Pharma, MJBIZDAILY, March 2, 2022, https://mjbizdaily.com/court-tosses-canopy-cannabis-patent-infringement-lawsuit-against-gw-pharma.
[7] No. 5:21-cv-01328 (C.D. Cal. filed Aug. 6, 2021).
[8] Adam Philipp, Can cannabis patents be enforced?, AEONLAW, Jan. 2, 2023, https://aeonlaw.com/can-cannabis-patents-be enforced.
[9] Id.
[10] Id.