How cannabis companies can protect intellectual property in the wake of Phylos Bioscience uproar

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(This is the second story in a two-part series. Part 1 featured Phylos Bioscience’s announcement it was welcoming Big Ag into the cannabis industry and the subsequent reactions.)

Oregon-based cannabis genomics company Phylos Bioscience’s disclosure that it was positioning itself to be bought by Big Ag underscores the need for marijuana companies to take steps to protect their cannabis genetics and data from falling into the wrong hands.

Cannabis growers and breeders are worried that genetics patents and data could be controlled by large corporate entities, which would limit genetic diversity and force smaller cannabis producers to pay more for seeds and clones.

Kyle Boyar, field applications scientist for Medicinal Genomics, a cannabis genetics testing company in Beverly, Massachusetts, backed up those concerns.

“We’re facing a land grab out there,” he said in May at Concentration 2019, a cannabis extraction conference in Pala, California.

“Tons of people are filing patents every day with cannabis in the claims.”

cannabis genetics, How cannabis companies can protect intellectual property in the wake of Phylos Bioscience uproar
Kyle Boyar

At the end of May, there were 323 patents that applied to cannabis with a little over a thousand that were in the process of being granted, according to Boyar.

Many of these patents, particularly the utility patents, are very broad, and Boyar is concerned that patent trolls, who make money by suing companies for patent infringement, and other bad actors are attempting to control the cannabis genetics in the market.

“I see this as a cancer to the cannabis industry,” he said.

Boyar envisions such patent trolls as hiding behind shell companies, where they sue a breeder or grower for “infringing” on a patent for a particular strain under one of these broad utility patents.

“This is how these things spread,” he said.

Possible intellectual property protections

Boyar’s answer is to upload genetic sequencing data onto blockchain technology on an open-source platform that’s accessible to the public.

“What’s great about blockchain is that you can’t tamper with any of this stuff without everyone on the network agreeing to what is modified,” according to Boyar.

“If there is a modification everyone knows about it.”

cannabis genetics, How cannabis companies can protect intellectual property in the wake of Phylos Bioscience uproar
Reggie Gaudino

Reggie Gaudino, vice president of research and development for Lafayette, Colorado-based Front Range Biosciences, a cannabis biotech company, said once cannabis genetics have been sold in dispensaries and spread across the industry without patents or other protections “it’s not possible to put the toothpaste back in the tube.”

“However, you can squeeze all the toothpaste out and put it into a different container,” he added.

“Then do something useful with the toothpaste in that new container.”

A breeding company that has an interesting strain, for example would be smart to have a lab look at the genetics.

“You have to be willing to accept that it takes outside consultations and technology to be able to do the things Monsanto and Dow do,” he added.

“Once that happens, we start to do things on their scale.”

It no longer takes eight-12 years to stabilize a strain, Gaudino said. It’s more like three-four years. So a breeder can file a patent on every interesting strain out there.

“We litter the ground with enough land mines that (Big Ag) has to tread lightly, and it takes them time to get caught up,” he added.

Otherwise, the Big Ag companies can go to dispensaries and buy all the strains and genetics that are on sale.

“They will take it back to their lab and they will do it faster and better,” Gaudino said. “Because that’s what they do.”

Patenting a plant

Ben Williams, a registered patent agent based in Littleton, Colorado, said one tool – the plant patent – is completely overlooked and could benefit the industry in the event of federal legalization.

cannabis genetics, How cannabis companies can protect intellectual property in the wake of Phylos Bioscience uproar
Ben Williams

“This tool, I believe, would actually protect growers from incursions of large corporate entities circling like vultures,” he noted. “Nobody files plant patents.”

According to Williams, a plant patent, similar to a utility patent, lasts for 20 years from the filing date and protects all part of the plant.

“You don’t have to be messing around with the genome,” he said. “If you own it, you own that plant.”

Other growers can’t rip you off because, if they start propagating your seeds, they owe you a licensing fee for each seed of yours they sell, Williams noted.

“This is the way growers will be able to protect themselves from Monsanto,” he said.

The one catch?

As long as cannabis remains a Schedule 1 controlled substance, it will be difficult to obtain a patent from the U.S. Patent and Trademark Office (USPTO).

However, as one exception, in 2016, a plant patent was issued for a cannabis cultivar, an intoxicating strain of Ecuadoran Sativa, according to Williams. He said seven or eight strains of cannabis, mostly CBD-dominant, have been patented since then.

Gaudino said the patents that have been filed are claiming “whole swaths of strains.”

“That’s an IP concern,” he added, referring to intellectual property.

“You have already in the industry people who are going after patents – and are doing it in a way that is not necessarily user-friendly.”

By that, he means a breeder could inadvertently develop a strain that produces a different chemical output one year, and suddenly, it’s under the guise of one of these patents.

According to Gaudino, those broad patents were issued because the USPTO doesn’t understand how closely related, how much overlap and how much hybridization there is between cannabis strains.

Next chapter

cannabis genetics, How cannabis companies can protect intellectual property in the wake of Phylos Bioscience uproar
Mowgli Holmes

As Phylos moves into its next phase, the company will continue to develop new cannabis varieties, with a focus on hemp and minor cannabinoids, according to co-founder and CEO Mowgli Holmes.

“That’s where we can really make a difference in how agriculture itself is working,” he said.

“We’re committed to being a good ag company, one that is focused on social and environmental sustainability and is dedicated to not repeating the mistakes that industry has made in the past.”

He sees “larger dangers coming” for the industry as a whole, meaning that, as the industry becomes modernized, intellectual property and genetics will become more difficult to protect.

For breeders and growers trying to protect their property, Holmes gives this advice:

“Keep your plants as trade secrets and never share cuts. Or spend a lot of time and money trying to get plant patents.”

But fighting over IP for old cannabis varieties isn’t in Holmes’ vision for the future of the industry. Although innovation has led to consolidation in other agriculture crops, he doesn’t believe it has to be that way in the cannabis industry.

Holmes doesn’t anticipate many different varieties in the future global biomass market, but he sees the craft cannabis industry as a thriving and diverse segment of the industry.

“Breeders need to keep innovating to create new diversity,” he said.

“Everyone needs to work together to preserve heirloom diversity. And we’re going to have to let science help with both of those things.”

Bart Schaneman can be reached at