Attitudes towards the use of cannabis, both recreationally and therapeutically, have shifted significantly in recent years. Recreational cannabis was legalised in Canada at the end of 2018. In the US recreational cannabis is now legal in 10 states and medicinal cannabis is legal in 33 (although cannabis remains illegal at a federal level in the US).

Medicinal cannabis was legalised in the UK for the first time in November 2018, but the rules surrounding its use are strict and it is not widely prescribed to patients, particularly by NHS doctors. Following a recent visit to Canada, a cross-party group of MPs has suggested that cannabis use in the UK may be fully legalised within the next 5 to 10 years. However, in view of the recent developments in other countries, might such a delay put UK companies looking to enter the cannabis market at a disadvantage?

Research into the active compounds in cannabis has focussed on two compounds, tetrahydrocannabinol (THC) and cannabidiol (CBD).

THC is the psychoactive cannabinoid that causes the cannabis “high” and only products containing low levels of THC can be prescribed in the UK.

THC has been shown to have beneficial effects in the treatment of children with severe forms of epilepsy, adults with vomiting caused by chemotherapy and adults with muscle stiffness caused by multiple sclerosis. However, THC has been linked to psychiatric problems.

CBD is non-psychoactive and studies of CBD have suggested positive effects in the treatment of neuropathic pain and inflammation, particularly pain and inflammation due to arthritis. However, side effects reported for CBD include nausea, fatigue and irritability.

Like all plants, cannabis produces a large number of secondary metabolites and it is thought that at least some of the beneficial therapeutic effects of cannabis may derive from the so-called “entourage effect”, i.e. multiple compounds acting together. It is speculated that there may be up to 500 compounds in cannabis that contribute to the therapeutic effects that have been observed to date.

Thus, it is clear that there may be great commercial value in further research into the compounds found in cannabis and their therapeutic effects. The identification of other therapeutically active compounds and/or combinations that do not have the side-effects associated with THC and CBD may be particularly beneficial. Indeed, cannabis research has flourished in Canada and the US in recent years as evidenced by the increase in the number of cannabis/cannabinoid-related patent filings in these countries since 2014.

Cannabis-related innovations may relate, for example, to new plant varieties or genetically modified cannabis plants or plant cells, methods and devices for cannabis plant cultivation, methods for extracting cannabinoids from plant material, new cannabinoid formulations, methods of synthesizing cannabinoid compounds, new therapeutic uses of cannabinoids, and devices and methods for consuming cannabis and/or cannabinoids.

Several intellectual property rights (IPRs) are particularly relevant to cannabis related developments, particularly patents and plant variety rights (also known as plant breeders’ rights). Trade marks will also become increasingly important as cannabis-related products become more commonplace. Thus, a good understanding of IPRs, including how inventions in this field can be protected in different countries and how to navigate the rapidly increasing number of third party rights in this field, will be important for any company looking to establish itself in the marketplace.

Understandably, conducting research in this controversial field faces numerous problems, including acquiring funding and navigating legal frameworks, which differ in each country. This has had consequences on the patent landscape. The scarcity of published research in this field has made it difficult for patent examiners to identify relevant prior art, which has resulted in early innovators in this field acquiring broad patent rights. Whilst such rights are consistent with the principles of the patent system (innovators that open up a new field of research should be appropriately rewarded with broad protection for their inventions), the broad rights present a potential barrier to third parties seeking to enter the marketplace.

As more countries relax their regulations on cannabis use it would seem likely that the amount of research and development in this area will increase and an increase in the number of patent filings can be expected to follow. Accordingly, new companies hoping to take advantage of the legalisation of cannabis (in the UK and elsewhere) will need to assess their freedom to operate in their proposed marketplace before embarking on activities that could infringe third party rights.

Whilst it may be possible to invalidate broad third party patents, this can be an expensive and time consuming process. A common negotiating strategy when facing the potential infringement of a patent is to enter into a cross-licensing deal, where the owner of the broader rights obtains access to a new development and the owner of the rights to the new development is able to enter the marketplace. However, as research in this area in the UK has been hampered by restrictive legislation, UK companies may not be in a position to enter into such cross-licensing deals and may find it challenging to be competitive in the marketplace (e.g. due to the need to pay prohibitively expensive licensing fees).

Thus, seeking protection for innovations is likely to be an important part of any strategy for a company looking to enter or further establish itself in the cannabis marketplace. If you require any advice on how to secure protection for your innovations or how to navigate the third party rights in this area, please get in touch.