Pro

Dab wars heat up with Puffco patent suit

By Alex Halperin
Jun 23, 2022
story-image
Source: Puffco.com

A patent infringement lawsuit filed by leading bongmaker Puffco could be a preview of the high stakes intellectual property (IP) litigation awaiting the cannabiz.

A victory for Puffco could frighten off potential competitors for the 20 year life of the patent. But if Puffco loses, lawyers say its patent could be invalidated.  

The iPhone of bongs

Since its release in 2018, Puffco‘s Peak and Peak Pro line of electronic dabbing rigs have lived up to their reputation as the iPhone of bongs. The Peak wasn’t the first e-rig on the market, but the sleek  device has done its share of the work to rebrand dabbing — for which many users prefer a blow torch — as a less intimidating and more accessible consumption method.

Due to “retail consumer appeal,” concentrates are “the hottest product category in cannabis” an Arcview/BDSA report found, projecting sales would reach $8.4B in 2022, nearly tripling from $2.9B in 2018. The Puffco Peak, which started around $300, almost certainly deserves some of the credit.

  • The pandemic helped make the case for having your own bong, and the Peak’s portability and cachet have made it into a ubiquitous accessory at California industry events. Many attendees carry their own, like beer bottles.
  • This month Puffco made a further move to extend its reach with the Proxy, a novel “Sherlock” pipe shaped e-rig which has attracted strong reviews. 

Claims of patent infringement

In its federal suit, filed in late March in the central district of California (LA), Puffco alleges SHO’s Focus V Carta bong infringes on Puffco’s patent for “a portable vaporizing device with an atomizer and mouthpiece that are each independently removably attached to the base.” (Neither company responded to requests for comment.)

Thus far patent litigation hasn’t been a big part in the legalization story. Despite tremendous innovation in vape pens, for example, few companies have felt compelled to defend their intellectual property in court.

  • Essentially that’s because various vape companies didn’t see much upside to suing each other, but look for that to change. “Litigation along these lines is only going to become more common in the cannabis industry as there is more money on the table,” California-focused IP attorney Luke Zimmerman said.

Since they’re often technical, patent disputes can be very expensive to litigate — easily $2M per side:

  • The 26- page patent can be seen here. Puffco illustrates the alleged infringements here.
  • The patent’s claims include technical language like “an atomizer housing comprising one or more atomizer holding walls that at least partially define an atomizer internal flow path therein.”

Patent’s, which enable inventors to restrict others from using their IP, have a vital role in the industry’s future. Unlike other federal regimes, the cannabis industry can access to the patent system.

  • “One of the most valuable assets you can have in this industry is an IP right granted by the federal government,” said IP litigator Hannah Stitt with SF-based firm Tectonic. And patents are a rare way to obtain that. 
  •  Stitt notes that since cannabis patents are aboveboard they’re an “asset class cannabis companies can develop to attract investors and make them feel comfortable.”
  • The federal government even holds a cannabis patent.
  • By contrast, another important types of IP, trademarks, are subject to “morality” judgements which can make them difficult for cannabis companies to obtain. 

Data from patent analytics company Dolcera shows a large increase in cannabis related patents over the past decade. (The pandemic dragged on filings.)

Cannabis related patent filings and publications: Courtesy: Dolcera dolcera.com

One exception to the dearth of patent litigation is the patent at issue in the new Puffco case. Puffco successfully protected the patent in litigation against competitor KandyPens. The suit settled last year with KandyPens acknowledging the patent’s validity and agreeing to redesign one of its devices.

Rather than focus on technical aspects of the case, SHO’s response, filed this month, focuses on a procedural technicality which lawyers said could be a problem for Puffco. 

In U.S. patent law, a concept called “prior art” gives inventors one year to file a patent after publicly displaying their invention. SHO’s response argues that Puffco’s pre-launch marketing for the Peak in early January 2018 came more than a year before it filed the patent application on January 14, 2019.

  • SHO argues that the IP had been made public,  among other places, in a January 8, 2018 review of the device in Engadget, in since deleted Instagram posts and at the Consumer Electronics Show (CES) in Las Vegas.      

These issues came up during Puffco’s KandyPens case, and Puffco prevailed” litigator Stitt said, which she said strengthened Puffco’s case.

  • However, Soody Tronson, founder of IP law firm STLG said Puffco’s position would be stronger if the patent had been upheld by a jury or an appellate court rather than through a settlement.  

Prior art defenses “can be pretty potent,” said Justin McNaughton, a partner at law firm Greenspoon Marder, which has a big cannabis practice.

  • SHO further alleges that Puffco did not disclose in its patent application that it had destroyed the prototypes it displayed at CES. 

Overall, the rise of IP litigation is a sign of health in the cannabis industry, attorney Tronson said. But she warned that companies need to understand patent law since “technical and/or procedural issues are very complex and not considering them can be very costly.”  

A new era for vapes

Aside from the growing likelihood of having to litigate their IP, Puffco’s lawsuit comes at complex moment for vape makers. Despite concentrates soaring popularity, some hardware sales have been disrupted by a December 2020 amendment to the Prevent All Cigarette Trafficking (PACT) Act which bans the post office and major private shippers from delivering non-nicotine vapes. 

In April 2021, Puff stopped shipping vapes to much of the country and has had to use workarounds.

  • Some of its competitors appear to interpret the law differently. SHO’s shipping policy doesn’t mention geographical restrictions.     

*

(Disclosure: WeedWeek is represented by Bryan Cave, Puffco’s representation in the suit.)