Steep Hill wins IP court case with New Mexico, competing medical cannabis lab

In a triumph involving intellectual property rights, California-based Steep Hill Labs won an emergency protective order against the state of New Mexico and a competitor over the disclosure of trade secrets.

Steep Hill filed suit in early April against the two entities after learning that Santa Fe-based Scepter Lab had obtained Steep Hill’s standard operating procedures from the state health department through an open records request in March. The Albuquerque Journal first reported the lawsuit.

New Mexico District Court Judge David Thomson ruled that the health department was prohibited from “further disclosure or dissemination of Steep Hill’s” procedures and also ordered that any copies of Steep Hill’s procedures and proprietary information be returned to the company.

Scepter owner Kathleen O’Dea, whose medical marijuana testing lab is one of only three in the state, wrote in an affidavit to the court that no one at her company had made any copies of Steep Hill’s procedures or proprietary information.

The Steep Hill-Scepter lawsuit is the latest in a growing number of intellectual property disputes in the cannabis space.

“This is a victory for the cannabis industry, assuring the State of New Mexico will protect trade secrets in the future,” Steep Hill attorney Jane Wright-Mitchell wrote in an email to Marijuana Business Daily.

4 comments on “Steep Hill wins IP court case with New Mexico, competing medical cannabis lab
  1. Kathleen ODea on

    Since you haven’t asked for my comments I thought I’d leave them here. We (Scepter) made a request for the SOP’s of all NM licensed laboratories because we had received information from a reliable source that the Department of Health was not evenly and uniformly applying the regulatory requirements to all license holders. We were told that not all labs were following the regulations.

    We were not interested in the content of the SOP’s but rather whether all labs had been required to submit them. It was the responsibility of the DOH to inform us that the materials were trade secrets and the DOH’s responsibility to protect legitimate trade secrets belonging to Steep Hill .

    We had no way of knowing the confidential nature of the materials because we not informed of this by the Department of Health and none of the other labs in the state claim that their procedures are proprietary. Nonetheless, we are not interested in the content of Steep Hill’s SOP’s, nor would we be interested in changing our procedures.

    Every procedure that we have developed is for the purpose of maximizing our efficiencies and throughput. Everything from our operating hours, to the order in which we process samples, to the liquids used to operate our HPLC have been created to yield the most accurate, reasonably priced and rapid results for our customers.

    Contrary to Steep Hill’s claims against us, even if we had their trade secrets we would not want to use them and it would not give us a competitive advantage because we already have 85% of the testing market here. This is not the first time they have come after us and it may be the real motivation behind their lawsuit.

    Reply
    • Bruce Banner on

      You have 85% of the testing market because your potency results are the highest in the State. In a market where consumers only care about potency, your SOPs work well. I’ve noticed in the legal markets that over time potency results start decreasing once labs upgrade their equipment and become more experienced.

      Reply
      • Kathleen ODea on

        DO you have data to support your statements or is this another attack on labs that provide better prices, better turn-around and better customer service?

        Reply

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