Hemp biotech firm
goes to federal court to
protect trade secrets
By Aleks – Own work, CC BY-SA 3.0, https://commons.wikimedia.org/w/index.php?curid=533953
Orochem, a biotech company that uses patented chromatography technology to purify and concentrate biopharmaceutical and other products, has sued to protect its method for extracting and purifying cannabidiol (“CBD”) from industrial hemp.
CBD is a non-psychoactive product that is reported to have medical benefits, including pain relief.
One challenge in obtaining CBD from industrial hemp is removing tetrahydrocannabinol (“THC”), the psychoactive compound present in industrial hemp (and marijuana).
Orochem entered into a CBD supply agreement with a company called Folium in 2015.
Follium, based in Colorado Springs, cultivates hemp on a 500-acre site.
High Times reports that Follium is the “largest vertically integrated producer of CBD-rich hemp oil in the world.”
According to High Times,
Although industrial hemp and marijuana are of the same species, they have nothing in common agriculturally. Industrial hemp crops are notable for their long, thin, bamboo-like stalks, while the CBD-rich plants in the Folium fields—a strain dubbed WHC1—are short and squat, no higher than 3 feet.
Orochem has filed suit in US District Court for the Northern District of Illinois alleging that Follium has stolen its trade secrets.
Orochem charges that Folium’s “real interest was to get access to and discover the details of Orochem’s proprietary methods and trade secrets for the extraction and purification of CBD.”
Orochem alleges that Folium secretly recruited one of Orochem’s engineers to help create a Follium product based on stolen Orochem technology.
Follium also sent its own employees to supervise the production process. Orochem required them to sign NDAs.
According to Cannabis Business Executive, the Orochem engineer was living in an extended stay hotel with the Follium employees and later went to work for Follium.
The former Orochem engineer then started contacting the contractors and vendors who had help establish the Orochem production process and tried to replicate it for Follium.
Orochem also claims that Follium breached the confidentiality agreements covering the technology.
Follium has recently opened a 50,000 square foot facility to produce phytocannabinoid-rich, THC-free oil using a patent-pending process.
The complaint can be read here.
Although marijuana cultivation and the manufacturing of marijuana-related products is now legal in a number of states, it remains illegal under federal law.
Thus, it will be interesting to see how a federal court handles this dispute. It may open (or close) the way to other pot-related federal court intellectual property cases.