Closely watched Colorado cannabis patent lawsuit dropped

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Colorado-based United Cannabis (UCANN) dropped a landmark CBD-related patent lawsuit against Pure Hemp Collective, leaving the legal issue unresolved.

The end of the lawsuit, first reported by Law360, follows an unsuccessful attempt by UCANN to reorganize its finances under federal bankruptcy laws.

The filing in US District Court in Colorado on March 31 ends the patent case for UCANN but notes that Pure Hemp’s “counterclaims shall be dismissed without prejudice.”

That indicates Pure Hemp, also of Colorado, could bring counterclaims forward in the future.

UCANN sued Pure Hemp in 2018 for allegedly infringing on a patent related to the formula of a cannabinoid-based tincture.

Cannabis industry attorneys were closely monitoring the suit because of the legal and financial implications of such formulations being considered intellectual property.

Pure Hemp had argued that UCANN’s formula wasn’t patentable because “substantially pure liquid CBD products are ubiquitous” in the marketplace.

U.S. District Judge William Martinez in 2019 denied an early motion by Pure Hemp to dismiss the suit, indicating that, despite certain ambiguities in case law, UCANN’s claims might involve a patentable matter.

But a year later, in April 2020, UCANN filed for Chapter 11 bankruptcy reorganization in Colorado federal court. That also was closely watched by the cannabis industry.

The bankruptcy case was dismissed in January 2021, when a judge sided with the U.S. Department of Justice that UCANN had some ties to the marijuana industry, which prevented it from getting relief under federal bankruptcy laws.

Orion Armon, UCANN’s outside attorney on the patent case, told Marijuana Business Daily on Friday that he wasn’t authorized to talk about the outcome of the patent lawsuit.

He referred questions to UCANN’s CEO, who couldn’t be reached for comment.

James Gourley, who represented Pure Hemp in the patent litigation, said he had no comment at this time.