Tuesday, October 18, 2022

More on Patent Damages and Immoral Inventions

Following yesterday's post, three of my academic colleagues contacted me with some interesting follow-ups.

First, Professor Martin Stierle, whose paper with Franz Hofmann on proportionality and injunctions I cited the other day, informed me that he gave a presentation last year in Switzerland along much the same lines as my post yesterday, and is working on a paper.  I look forward to reading a draft when it's ready, and will be sure to bring the published version of it to readers' attention.  Great minds think alike!

Second, Professor Sarah Burstein called my attention to a pending case she mentioned on Twitter just last week.  The case, Gene Pool Technologies, Inc. v. Coastal Harvest, LLC, involves--guess what?--patents being enforced against companies that allegedly are infringing them by engaging in cannabis extraction.  The defendants have moved to dismiss for lack of subject matter jurisdiction or, alternatively, for failure to state a claim upon which relief may be granted (see brief here).  They assert that the court cannot award the sought-after reasonable royalty (for past infringement) and ongoing royalty (for future infringement) because doing so would reward allegedly illegal (under federal law) conduct.  In response, the plaintiff argues, among other things, that the cases the defendants cite (most but not all of which involve bankruptcy or contract claims) are distinguishable, and that public policy favors enforcing its patent (because otherwise patent infringers who also violate the Controlled Substances Act are better off than infringers who don't).  (See brief here; see also the defendant's reply brief here.)  The defendant also cites a law review article, which I had not previously come across and which provides arguments for nonenforcement:  William J. McNichol, Jr., The New Highwayman:  Enforcement of U.S. Patents on Cannabis Products, 101 J. Pat. & Trademark Off. Soc'y 24 (2019).  The article discusses the moral utility doctrine as well as the doctrine of ex turpi causa in U.S., U.K., and Canadian law.  Plaintiff's brief, on the other hand, cites a district court  decision (Lifted Limited, LLC v. Novelty Inc., 2021 WL 4480566 (D. Colo. Sept. 30, 2021), denying a motion to dismiss in another case involving somewhat analogous facts and also raising an illegality defense--though in that case the court resolved the matter based on its determination that the defendant's product was not, as the defendant claimed, illegal drug paraphernalia.  (These cases are so weird . . . .)  

Third, Professor Norman Siebrasse, who has previously blogged about the ex turpi causa doctrine in Canada (see here), suggests that with regard to marijuana-related patents it would make sense to award damages for the uses that are legal and not for those that are illegal.  I'm inclined to think this is the most sensible solution, though I plan to continue thinking matters through and perhaps reviewing some of the non-patent cases cited in the Gene Pool briefs.  (Cf. the McNichol article cited above, which argues that, on the basis of the moral utility doctrine, the USPTO should grant patents only on medically-related cannabis products.) 

I'm sure there's more that can and will be said about moral utility, ex turpi causa, public policy, and cannabis-related patent infringement actions.  Meanwhile, if anyone know of any other cases like these, or relevant commentary, please let me know.

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