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Do Bad Psychedelic Patents Matter?

Do Bad Psychedelic Patents Matter?

Few topics garner more attention in the psychedelic community than patents on psychedelic innovations. From publications like Vice to the American Prospect, we are told that psychedelic patents may be the greatest obstacle to widespread access to psychedelic therapies. Some, such as the academics behind the Tim Ferriss sponsored POPLAR initiative, see the problem as so distressing that for their first significant academic publication, they penned an essay calling for abolition of the patent system entirely for psychedelic innovations. In my own newsletter, On Drugs, I wrote a screed entitled “Hot Psilocybin Patent Garbage” calling out a patent on using psilocybin with cancer patients. Not surprisingly, it is the most read article on the site.

And yet, throughout this vibrant discussion, nobody seems to explain why bad psychedelic patents are worthy of our outrage. Skimming these articles, one comes away with the feeling that psychedelic patents will lead to an apocalypse of the psychedelic renaissance. The notion isn’t without force. Patents mark territory. In exchange for publicly disclosing how to make a novel or non-obvious process, machine, or composition of matter, for a limited time, the patent holder gets the right to exclude others from making, using, importing, or selling the disclosed item, thus removing the innovative disclosure from the public domain. Most psychedelics have been around for a long time, however, albeit illegally. If people are out there obtaining patents on psychedelic use, in many cases, they are not really disclosing much that is new or innovative. All we’re left with is a land grab won by private companies with enough resources to hire patent attorneys to inundate the patent office with patent filings.

But on closer examination, many of these apocalyptic narratives fall apart or appear to be exaggerated. For example, bad patents are not unique to psychedelics. Don’t believe me? Let me introduce you to issued US Patent Number 5,443,036 entitled “Method of exercising a cat,” which patents using a laser pointer and having a cat chase it. And let us not forget the time when the Patent Office issued U.S. Patent Number 6,468,227 on a “Method of swinging a swing” to 5-year-old Steven Olson, which Olson’s father filed to show his son how the patent process works. If the goal was to show him that with persistence and patience, anyone can get a stupid patent—mission accomplished. The patent office receives over half-a-million applications each year, and examiners have, on average, less than 20 hours to review each one. Hence, bad patents, and not just in psychedelics.

Another concern is that companies may end up with psychedelic patents that misappropriate or infringe on indigenous rights. Biopiracy is a legitimate concern when it occurs, and I don’t profess to know the frequency of such misappropriations. Others know much more. Among other things, biopiracy upends the bargain underlying the patent system. A patent over an indigenous practice gives the patenter proprietary rights over another culture’s innovations and discovery. 

But let’s not conflate this problem–which in my view finds roots less in the U.S. patent system and more in colonialism—with the notion that patents will somehow preclude those cultures from being able to use entheogenic plants in their practices. First, is it really likely that a company ends up with patents that cover indigenous uses of plants? And second, in the odd event one does, would a right-minded company serve a lawsuit on, say, the Navajo Nation seeking royalties for traditional and ceremonial use of peyote? Patent litigation is expensive and the economics for suing a tribe over ceremonial uses just aren’t there. Also, courts have held that Native American tribes enjoy immunity from patent infringement lawsuits. Invoking indigenous rights as a basis to criticize the existence of psychedelic patents, without carefully circumscribing the discussion is perhaps, like other narratives, a hyperbolic strawman to try to convince you that you should care more than you should.

Should We Care About Bad Psychedelic Patents? 

So let’s be real here. You’ve got only so many psychedelic f*cks to give. Should bad psychedelic patents be one of them? 

As a career patent litigator who spent one year working the “rocket docket” for patent cases as a law clerk during its very busiest years, let me offer you an unsatisfying, lawyerly answer to this question: yes and no. Bad psychedelic patents are a problem. But how and why they present a problem is often misunderstood, mischaracterized, and sensationalized by the media and academics alike.

The conventional scare narrative goes like this: COMPASS Pathways (a company often criticized by activists) and other companies are out there patenting psychedelic innovations left and right. COMPASS, for example, has patents and patent applications ranging from its crystalline form of psilocybin to the use of psilocybin with soft furniture pieces. So, the story goes, these companies will build up a patent armada that will exclude competition, monopolize psychedelic medicine, and crush everyone in their path.

This narrative is not unreasonable. Profit-hungry companies don’t breed patents for sport, after all. The problem, however, is that this narrative does not describe a problem unique to psychedelics. Rather, it describes the pharma playbook where the most linear way to recoup large costs from research and development, as well as clinical trials, is to fabricate exclusionary rights over a study drug. Psychedelic medicine companies like COMPASS intend to bring medicine through the FDA process. It would make sense that they would go the pharma route, patents and all. This is a real problem, but it isn’t a problem only with psychedelics. It is a problem inherent with capital investment, regulations, and the way the pharmaceutical industry works. And if one sees the problem this way, fixing it would require more than reversing the tide on the War on Drugs. You’d have to do something far more daunting: take on the entire pharmaceutical-industrial complex. No thanks.

I do not support bad patents, whoever holds them. Nor do I do not support the exploitation of bad patents to block competition. And I certainly do not support “evergreening” patents–or the practice of manipulating intellectual property rights to extend the lifetime of patents that are about to expire–as the pharmaceutical industry habitually does. But if we are going to have a meaningful discussion about the problem of psychedelic patents and propose productive solutions that are within reach, we should focus on fixing problems unique to psychedelic patents – that is, less ambitious solutions that do not involve threatening the most powerful industry in America.

Why Bad Psychedelic Patents Are a Problem

As I see it, there are two issues unique to psychedelic patents worth discussing: poorly documented prior art, and relatedly, that examiners are unfamiliar with the state of an often-illegal art. Hence, patents on combining LSD with MDMA, popularly known as “candy-flipping.” There are ways to directly address these problems without overhauling the pharmaceutical patent system. To assist examiners and the industry locate obscure prior art, the Porta Sophia project has built a library of psychedelic prior art available with a user-friendly interface, and it has made third-party submissions to the patent office alerting it to such prior art. The nonprofit advocacy organization Freedom to Operate (and potentially other similar initiatives in the future) aim to use Patent Office procedures to review important psychedelic patents, thereby introducing adversarial advocacy and more robust scrutiny into a patent examination process that may lack sufficient rigor due to an unfamiliarity in the psychedelic art. Additional targeted solutions that address these problems will go a long way.

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Another threat to an emerging psychedelic industry and ecosystem is an issue I call the “wayward patent problem.” Indeed, as someone who has seen this up close and personal, this is the threat I fear most.

The “wayward patent problem” is when patents stray from their original owners and become a menace in the hands of other companies. Like a latent disease, it won’t manifest itself until years from now. It takes time to grow and develop as the industry matures. Right now, start-up companies are seeking and obtaining patents to, among other things, put some assets on an otherwise assetless balance sheet to attract investors. As the industry matures, some start-up companies will succeed, but many more will not. Those that struggle may sell their patents and IP to raise cash. Companies will go bankrupt and IP will be liquidated. Patents will find new homes, often scooped up by patent assertion entities (also referred to as “patent trolls”) – companies that make no products and have no business except licensing patents and suing for patent infringement.

A bad patent in the hands of an operating company like COMPASS is one thing. Operating companies may use patents to shut out competitors. But there are many deterrents that stop these companies from aggressively filing any and every lawsuit, including cost and the possibility of a countersuit. Operating companies also typically file lawsuits only with good patents that pass the smell test. Patent assertion entities, however, don’t make or do anything, so they cannot be counter sued. And because they exist as shell companies–companies with no assets except their patents–they can also exploit economic asymmetries and court costs to force companies to settle cases at prices below the cost of litigation—a nuisance settlement. In litigation, each side typically bears its own costs and expenses. That can be a hefty deterrent to filing a lawsuit. But because patent assertion entities have little to no assets other than their patents, they often can sue on the cheap, breeding lawsuits as quickly as COMPASS can breed patents. Some research estimates that patent trolls cost operating businesses $29 billion per year in direct out-of-pocket costs—costs that disproportionately fall on innovative companies. Indeed, it would not surprise me if years from now, COMPASS and many other of the derided patent holding psychedelic pharma companies found themselves on the receiving end of a troll suit or three.

The wayward patent problem is not a problem unique to psychedelic patents. And so, neither are the potential solutions. One I have discussed are defensive or standardized patent licenses that companies and funders can use to encumber patents to prevent the wayward patent problem. These licenses can do everything from requiring a patent owner to license at a fair and reasonable rate to preventing a patent’s assertion by a non-practicing entity.

The reality is that bad patents will be sought and inevitably issued in all emerging industries. Whining on social media or pontificating about overhauling the patent system may generate clicks, but brings us no closer to productive solutions. Working together to collect prior art or coming up with ways to make sure these patents don’t get into the wrong hands, however, can tangibly address issues inherent to a flawed system in an emerging space.

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