Since Attorney General Jeff Sessions was sworn in, the cannabis industry has been watching and waiting to see if he would indeed keep his word to crack down on state-legal cannabis businesses.  On January 4, 2018, just four days after the legal sale of recreational cannabis for adult-use went into effect in California (making it the largest economy in the world to offer legal cannabis), Sessions issued a one-page memorandum for all United States Attorneys ("the Sessions Memo") that eliminates the Obama-era policies of noninterference with state-compliant cannabis businesses.

To the point, the Sessions Memo states:  "Given the Department's well-established general policies, previous nationwide guidance to marijuana enforcement is unnecessary and is rescinded, effective immediately."

Importantly, the "previous nationwide guidance" referred to in the Sessions Memo includes the guidance released in 2013 by former Deputy Attorney General James Cole (often referred to as the "Cole Memo") that directed federal prosecutors to avoid criminally prosecuting cannabis businesses that are compliant with state laws.  The biggest practical effect that the Cole Memo had on the cannabis industry was that it helped stop the constant DEA raids of legal cannabis businesses, including medical dispensaries.

So what impact, if any, might the Sessions Memo have on the U.S. Patent and Trademark Office's policy towards cannabis patents?  On one hand, potentially nothing.  The USPTO has been granting patents on cannabis-related inventions despite its classification as a Schedule I drug under the Controlled Substances Act ("CSA") well before the Cole Memo was issued in 2013.[1]

Additionally, the patent statute does not have a prohibition on patenting subject matter that implicates illegal activity.  Rather, according to 35 U.S.C. § 101, patent protection can be broadly obtained for "any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof."  Even the current version of the Manual of Patent Examining Procedure at § 706.03(a) states that is improper for a patent Examiner to base a rejection for lack of utility under § 101 on the grounds that the invention is "frivolous, fraudulent or against public policy."  Therefore, it is likely that examination of cannabis patent applications will be "business as usual" at the USPTO even in light of the Sessions Memo.

On the other hand though, with the likely impending Senate confirmation of Andrei Iancu, Trump's nominee for the new USPTO director, agency policies may shift to align with those of the Trump Administration.  If this happens, the Office may also begin to deny cannabis-related patents.  But even further uncertainty arises in the Trump Administration's conflicting views on its own cannabis policies.  For example, during his campaign, President Trump expressed approval of medical cannabis and leaving the development of cannabis laws to the states, which are policies that are historically consistent with Sessions's states' rights views, but inconsistent with Sessions's current agenda.

So with all eyes on President Trump at this point, the industry, financial, and cultural impact of Sessions's actions today sit at the top of every canna-business's mind.  On the innovation and intellectual property front, the most troubling potential impact of the Sessions Memo on canna-IP is its potential to deter innovators in the cannabis industry from applying for patents altogether in order to avoid creating a public record of activities that are considered illegal under the CSA.  However, to date, the federal government has not used patents as a means to shut down cannabis businesses (indeed, the federal government itself owns a patent directed to a method of treating oxidative stress by administering a cannabinoid).[2]

But, while neither the USPTO nor the Trump Administration has announced a policy with regard to cannabis patents, the Sessions Memo is troubling for the rapidly growing legal cannabis industry, and many questions remain as to the ultimate impact of this directive.  For now, at least, the USPTO policies towards cannabis patents remain unchanged; but the next few months will be interesting to watch unfold.

[1] See, e.g., U.S. Patent No. 4,219,032 “Smoking Device,” which was filed on November 30, 1977 and issued on August 26, 1980.

[2] See U.S. Patent No. 6,630,507, which issued October 7, 2003 and is assigned to the U.S. Dept. of Health and Human Services.