In 2019, the Patent and Trial Appeal Board (PTAB) of the United States Patent and Trademark Office (USPTO) issued a decision in the first inter partes review of a cannabis related patent (Insys Development Company, Inc. v. GW Pharma Limited and Otsuka Pharmaceutical Co., (IPR 2017-00503)) ("Insys"). That decision was of interest to stakeholders in the cannabis industry particularly for what was not stated in any of the proceedings. Because enforcement of patent rights is governed by federal law, the Schedule I status of cannabis has cast uncertainty over whether cannabis patent rights can actually be challenged or enforced. The Schedule I status of cannabis did not enter into the PTAB's decision, which was based solely on the obviousness of the claims. The PTAB proceeding showed that just like any other patents, cannabis related patents can be challenged. (See the following link for more information: https://blogs.duanemorris.com/cannabis/2019/01/16/business-as-usual-at-the-patent-and-trial-appeal-board-the-first-cannabis-related-patent-and-trial-appeal-board-decision-at-the-united-states-patent-and-trademark-office/)

Now, in 2020 the PTAB has issued a decision denying a petition for post-grant review of a psychedelic therapeutics patent. (Kohn & Associates, PLLC v. Compass Pathways Limited, Pet. for Post-Grant Review, PGR2020-00030, filed February 21, 2020) ("Compass Pathways"). Post-grant review is a trial proceeding at the PTAB that permits a third party to challenge the validity of claims of a granted patent. The first step in the post-grant review process is the filing of a petition by the challenger requesting post-grant review. The challenger must convince the Board that it is "more likely than not" that at least one of the challenged claims is not patentable. If the Board is not persuaded by the challenger's arguments, the petition is denied and no post-grant review will take place. This is what happened in Compass Pathways.

Similar to its decision in Insys, the PTAB's decision on the psychedelic therapeutics patent in Compass Pathways had nothing to do with the Schedule I status of psychedelic therapeutics. This recent PTAB proceeding demonstrates that psychedelic therapeutics patents can be challenged and that the PTAB will consider that challenge in the same way that it considers challenges to patents on any other subject matter.

Psychedelics such as psilocybin, were designated along with cannabis as Schedule I controlled substances under the Controlled Substances Act of 1970. Nevertheless, the USPTO has granted, and continues to grant, patents covering psychedelics. U.S. Patent No. 10,519,175, "Preparations of Psylocybin, Different Polymorphic Forms, Intermediates, Formulations and Their Use" ("the '175 patent") was issued to Compass Pathways, Ltd., on December 31, 2019. Compass Pathways describes themselves as a mental health care company with a focus on psilocybin therapy for treatment-resistant depression. Compass Pathways' psilocybin therapy received Breakthrough Therapy designation from the FDA in 2018. Breakthrough Therapy designation provides expedited development and review of drug candidates.

In their petition requesting post-grant review of the '175 patent, the challenger, Kohn & Associates, PLLC, a Michigan law firm ("Kohn"), asserted that the claims in the '175 patent are invalid and should never have been granted because they are obvious in view of articles in scientific literature that published before the priority date of the patent. Claim 1 is directed to a method of treating drug-resistant depression by administering a psilocybin formulation to a patient having drug-resistant depression. Claim 1 reads:

  1. A method of treating drug resistant depression comprising orally administering to a subject in need thereof a therapeutically effective amount of an oral dosage form, wherein, the oral dosage form comprises:

crystalline psilocybin in the form Polymorph A characterized by peaks in an XRPD diffractogram at 11.5, 12.0, 14.5, 17.5, and 19.7o2? ± 0.1o2?, wherein the crystalline psilocybin has a chemical purity of greater than 97% by HPLC, and no single impurity of greater than 1%; and

silicified microcrystalline cellulose.

The claim language is technical, but the gist of the claim is relatively simple. What is important to understand is that the patentee was trying to address a relatively common problem in pharmaceutical industry, namely the production of a highly purified active pharmaceutical compound on a commercial scale. As the '175 patent states, psilocybin is difficult to formulate because of its poor ability to flow, which hampers manufacturing, and it is used in low doses which complicates the preparation of tablets that provide a consistent uniform amount to the patient. The patentee developed a method to consistently produce a form of psilocybin ("Polymorph A") suitable for administration to human subjects.

Kohn argued that the differences between "Polymorph A" of claim 1 and a polymorph described in a reference dating to 1975 were insignificant. Kohn further argued that it would have been obvious to combine the teachings of that reference along with two others in order to develop the method of treatment of claim 1.

The Board was not persuaded. In its August 20, 2020 Decision denying the petition for post-grant review, the Board first laid out the standard for obviousness, noting that patent claims composed of several elements are not obvious "merely because each element was independently known." There must be something that would prompt one of ordinary skill in the art to combine those elements and to do so with a reasonable expectation of success. The Board found none of this in the challenger's arguments. And, the Board also pointed out that the USPTO patent examiner of the '175 patent had stated that the differences between the '175 claims and the 1975 reference was one of the reasons she had the allowed the claims. The Board concluded that the petitioner had failed to show that "it is more likely than not" that the claims were unpatentable as obvious over the cited references. The Board did not mention the Schedule I status of psilocybin in its decision.

The parties also tangled over the identity of the real party in interest. A challenger is required to identify the real party in interest in their petition. This is an evolving area of the law. But essentially, the rationale for this requirement is that once the PTAB issues its final written decision, the petitioner and all real parties in interest may not assert in District Court or in other USPTO proceedings that the claims are invalid on any ground that the petitioner "raised or reasonably could have raised during the post-grant review proceeding." In Compass Pathways, the Board concluded that because it had determined that the petitioner had not "sufficiently established that any of the challenged claims are unpatentable as obvious over the cited reference," it did not need to address arguments about the real party in interest.

So, as was the case for cannabis-related patent in the Insys IPR, the PTAB issued its decision on the psilocybin-related patent solely on the basis of obviousness-an issue that is routinely raised in the patenting of any pharmacological agent regardless of the Schedule I status of that agent.

Although legalization of psychedelic therapeutics lags behind that of cannabis, the challenge to the Compass Pathways psilocybin patent suggests that patents in the psychedelics area are just as open to challenge as patents in any other area. Given the increasing interest in psychedelic therapeutics for treatment of disorders that are often resistant to treatment with conventional pharmaceuticals, for example, depression and posttraumatic stress disorder, we can expect that further challenges to psychedelic therapeutics patents will not wait for legalization. You can learn more about patenting psychedelic therapeutics at the following link: https://www.duanemorris.com/articles/the_next_cannabis_patent_protection_psychedelic_
therapeutics_0320.html.

Postscript: On August 28, 2020, eight days after the denial of the petition for post-grant review of its '175 patent, Compass Pathways filed documents for a U.S. Initial Public Offering (IPO). See:https://www.sec.gov/Archives/edgar/data/1816590/000162828020013118/compassf-1.htm

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.