Patents in the Cannabis Industry: Increased Investor Protection

 

In any emerging industry, patent protection becomes a key component. The ability to exclusively produce and profit off of one’s own innovation encourages research, development, and investment. Many companies’ valuations are based in a large part on the extent to which their intellectual property is protected. The cannabis industry offers some hurdles to achieving that sort of protection, among them is the fact the plant is federally illegal, and that many cannabis species are naturally occurring which makes them difficult to patent. There are however companies that have been able to be successful at protecting their assets. Utility patents, covering a novel invention that is new and useful, offer perhaps the best path to intellectual property protection in the cannabis industry.

One company,  Ovation Science Inc. (CSE: OVAT) (OTCQB: OVATF), holds utility and product patents around its Invisicare® drug delivery technology for cannabinoids. The proprietary delivery platform greatly enhances the deliverability of cannabinoids through topical and transdermal means, like creams, and lotions. With wellness and beauty markets comprising one of the fastest-growing segments in the cannabis industry, it might be worth taking a look at what Ovation Science has to offer.

Broad Protection

Ovation’s patents covering Invisicare® include composition, the manufacturing process, and use. In essence, nobody can utilize the unique delivery system in any way without Ovation’s consent. Not only is the underlying technology protected, but the company has the ability to patent individual products that have been developed using Invisicare®. To this point, the company has developed 30 patent-protected products using CBD or THC as active ingredients. For example, Ovation’s CBD sunscreen is protected through 2029. Even without a specific product patent, all of Ovation’s products utilize Invisicare® technology and are therefore protected by the technology’s patent.  Furthermore, Ovation has a patent-pending in the US and Canada for its transdermal cannabinoid formulations.  When granted, this patent would further protect Ovation’s transdermal products for 20 years.

Not only are Ovation’s patents broadly protective of its products and technology, but they are also also geographically distributed across the globe. Invisicare® is patented in the US, Canada, four European countries, China, India, Australia, Hong Kong, and South Korea.

Click here to learn more about investing in patented skincare technology

As opposed to patents based on unique strains of cannabis or hemp, Ovation patents are fairly easy and practical to enforce. With plants, it can be difficult to prove that the genetics of a strain are exactly the same as the patented one. Additionally, plant patents are tough to get and offer limited protection in practice. They are often used for show, to impress investors and potential clients, but rarely are enforced. Ovation’s delivery technology is built using closely guarded trade secrets that results in products with unique and easily identifiable characteristics. The company completely controls the production processes and sells its Invisicare® polymer technology to its licensees as part of its out-licensing model; always protecting its “secret sauce” so that duplication of Invisicare benefits are not possible.

Highly Effective Delivery

Cannabinoids are lipophilic (soluble in fat) and hydrophobic (insoluble in water). Using hydrophilic and hydrophobic polymers, Invisicare® technology bonds active ingredients to the skin for up to four hours and forms a barrier that resists wash off and perspiration. Additionally, Invisicare increases the release of ingredients to and through the skin.  In its own research, the company found that Invisicare® CBD formulations exhibited a 40% topical release compared to just 3% for market-leading formulations after a two-hour period.

In addition, the company’s research found that its transdermal CBD formula—designed to be absorbed through the skin to provide systemic effects—powered by Invisicare® had a greater than 80% penetrate rate at six hours compared to 10% to 25% for market-leading formulas. These improvements translate to more active ingredients delivered to target sites and represent a major competitive advantage for products utilizing the technology.

Revenue Model

Ovation creates its own products, sold to the health and wellness sector through the InvibeMD portal and to the beauty and skincare sector through the ArloCBDBeauty portal. Aside from direct-to-consumer sales through the portals, a major part of its revenue plan comes from licensing agreements with cannabis companies already distributing and selling products in key markets where cannabis is approved. Ovation’s first US licensing agreement is in Nevada. The company is currently seeking and developing agreements with licensed operators in other states and countries as well.

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