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INSIGHT: Why the Illegality Doctrine Shouldn’t Apply to Cannabis Patents

Jan. 17, 2020, 9:01 AM

Some have suggested that, while it is legal for the United States Patent and Trademark Office (USPTO) to grant cannabis patents, federal courts cannot entertain lawsuits to enforce those patents because of the illegality doctrine.

The illegality doctrine comes from the Highwayman’s case, a 1725 case in which an English court refused to entertain a lawsuit by one highway robber against his partner-in-crime who allegedly cheated the plaintiff out of his share of stolen earnings. While no court has considered whether this doctrine applies to cannabis patents, we believe the doctrine does not apply for at least two reasons.

Not the Fruit of a Crime

First, the illegality doctrine does not apply to cannabis patents, since the rights granted under these patents are not the fruit of a crime.

In the Highwayman’s case, the private agreement between two criminals was held to be unenforceable because the agreement concerned a division of earnings that neither had a legal right to possess. A patent, by contrast, conveys rights granted by the federal government under the federal patent statute.

Many cannabis patent holders are large pharmaceutical companies, universities, and research institutions; even the federal government owns cannabis patents. Each of these entities acquire their patents through lawful means expressly permitted by the government.

For example, it is not illegal to research cannabis under registration and site licensure by the Drug Enforcement Agency (DEA). Some cannabis-related discoveries under these licenses have been approved by the Federal Drug Administration (FDA), via the Center for Drug Evaluation and Research.

It also is not illegal to get U.S. patents for research and development on cannabis done in Canada or overseas, e.g., the U.S. patents issued to GW Pharmaceuticals covering its Epidiolex drug. Cannabis patents can, and in many cases do, result from perfectly legal conduct that cannot be equated to a private division of loot between two crooks.

Not a Right to Engage in Illegal Act

Second, even for cannabis patents that are not the product of research under DEA registration or done in foreign countries, cannabis patents are not categorically unenforceable since the right to exclude others from making, using, or selling claimed subject matter does not convey any right to engage in acts that are illegal under the federal Controlled Substances Act (CSA).

A patent confers the “right to exclude others” from making or using the invention, it does not grant the patent owner a right to make or sell the invention. The power to prevent others from making, using, or selling a cannabis related invention does not violate federal drug law. Therefore, there is no good reason to apply the illegality doctrine to prevent enforcement of these patents against alleged infringers in a federal court.

The bottom line is that there is no reason a federal court should apply the illegality doctrine and refuse to enforce patents issued by another branch of the same government. That would introduce an “intolerable fissure in the law’s conceptually seamless web” by “giving with one hand what it takes with the other.”

Potential War

There has been a well-documented uptick in cannabis-related patenting activity in recent years, and we expect this will lead to increased patent litigation over cannabis patents—maybe even a cannabis patent “war.” We expect this issue to be raised and adjudicated in one or more of those cases.

Once patent litigation does materialize, litigants would be wise to consider patent litigation counsel with both patent litigation expertise and also expertise with the numerous issues unique to cannabis patents, such as the issue addressed here, issues under 35 U.S.C. § 101, and the related Alice line of cases, and prior art issues unique to the cannabis industry.

This column does not necessarily reflect the opinion of The Bureau of National Affairs, Inc. or its owners.

Author Information

Rob Cerwinski, a partner in Goodwin’s IP litigation group, helps lead the firm’s industry-leading biosimilars practice group and has extensive experience litigating intellectual property disputes concerning pharmaceutical, biosimilar, and other biologic drug products. Cerwinski has represented clients in patent and trade secret litigation before federal and state courts across the country, and before the U.S. Patent & Trademark Office.

Brett Schuman is the chair of Goodwin’s San Francisco office and a partner in the firm’s IP Litigation group, focusing his practice on patent and other IP litigation in federal and state courts around the country. Schuman also co-chairs the firm’s cannabis practice where he advises Fortune 50 companies to emerging companies on the federal and state regulatory regimes relating to cannabis, IP issues, products liability and represents cannabis industry clients in litigation.

Daniel Mello is an associate in Goodwin’s litigation department representing clients in a variety of internet-based intellectual property matters and in complex, cross-border commercial litigations and government investigations. He is also a member of Goodwin’s cannabis practice, providing regulatory guidance to clients in the cannabis industry.

Nikhil Sethi is a law clerk in the business law department at Goodwin and a member of its FDA regulatory team focusing on corporate and regulatory matters involving drugs, biologics, and medical devices.

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