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Unique Challenges in Cannabis Patent Valuation

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Patents are increasingly a significant proportion of a cannabis company’s claimed valuation. As cannabis companies identify ways to differentiate their business from competitors, patents play an important role in ensuring that competitors cannot duplicate their products or processes.  

Patents are often used to insulate products from direct competition by building temporary barriers to prevent competitors from using the same advantages. Companies can also build portfolios of patented technology that can be sold or licensed like any other asset, or used to enhance their valuation for acquisition or investment. 

Not all patents, however, are created equal. Patents are supposed to be issued only for new and useful inventions, but many conflicts and self-sabotaging policies are built into the patent system that frequently result in “bad” patents–in all fields of technology–that would be invalidated if ever enforced. These patents look like all others at first glance, but they have no practical value. On the other hand, highly defensible patents may be practically worthless because they have no commercial applicability. 

Involving a patent attorney who is familiar with the industry’s technology can significantly increase your ability to evaluate the worth of a patent or portfolio.

When reading and evaluating the value of a patent, whether in cannabis or any other field, there are four main considerations:

1) What do the patents actually cover?

Evaluating a patent’s scope of coverage is a two-step process. Step one is to determine what products or processes are covered by the specific language of the patent claims. Patents are technically dense documents that often seem much broader than they really are. 

The idiosyncratic language and nuanced technicalities of patent law make patents difficult to understand for non-patent professionals, even experienced lawyers or scientists. Seemingly minute changes in language (i.e., “comprising” vs. “consisting of”) can have enormous consequences on what technologies are covered by the patent.

The second step of patent interpretation is to identify any “hidden” limitations on the patent’s scope. Frequently, and for a variety of reasons, a patent’s actual coverage may be significantly narrower than the explicit words of the patent. This typically results from the applicant making arguments or amendments during the lengthy application process. 

The patent application process often lasts several years and involves dozens of communications between the applicant and the patent office. Applicants often make arguments to distinguish their invention from previous inventions in the hopes of convincing the patent office to grant them a patent. Under certain circumstances, those arguments can dedicate some aspects of the invention to the public and later be used against the patentee if they try to assert their patent rights.

Determining the patented subject matter is a critical step in valuing any patent and cannabis patents are no exception.

2) Is the patented technology valuable to the industry?

Not every patent is valuable. The application and examination process is supposed to ensure that patents are awarded only for “new” and “useful” inventions, but there is no requirement that the invention be commercially viable.

Patents may issue that have no practical value because no company is interested in making or using that technology, as in the often cited useless patent below, the Greenhouse Helmet. Or, even worse, they may be able to achieve the same (or better) results by simply making minor changes that avoid the patent claims altogether. The ease with which a competitor can “design around” patents and achieve similar results will greatly reduce the value of a patent.

It is not always easy to evaluate how valuable a particular invention is to an industry. One of the best indicators is the current commercialization of the invention. If the patentee and their biggest competitors are all using the patented technology, that is a strong indication that the technology has commercial value. On the other hand, if commercial realities or consumer preferences have limited the patented technology’s adoption, the patent may be practically worthless.

In the cannabis industry, technology is changing rapidly. There are often many different paths to the same destination. Whether a patented new method, composition, formulation, or device has any commercial value is a matter of whether the technology provides substantial reduction in production costs or increase in consumer demand. Proper valuation of cannabis patents therefore requires deep technical understanding of the cannabis supply chain.

3) Do major validity threats exist?

The biggest threat to any patent in any field is prior art. Prior art refers to any printed publication (typically patents and academic papers) or use of an invention before the patent’s filing date. Patented inventions are supposed to be “novel” and “nonobvious,” meaning that they represent a non-trivial advancement of public knowledge. Evidence that the invention was known or in public use prior to the application’s filing date (i.e., that it was prior art) can invalidate or limit the scope of a patent.

Identifying all potentially invalidating prior art, however, is difficult, if not impossible. High-stakes patent litigation will often uncover seemingly buried prior art, like the only copy of a doctoral thesis housed in a German library. Patent search companies can also look through commercial and proprietary databases to identify potentially relevant prior art, but that process can be expensive and is not guaranteed find all references.

Finding invalidating prior art is especially challenging in the cannabis industry, where federal prohibition has significantly limited traditional forms of prior art. In many cases, the inventions were used for years prior to filing but were not published in traditional sources. Examiners and search firms generally do not check future4200.comReddit, or dark web forums for cannabis prior art. To have any practical value, therefore, prior art searches for cannabis inventions must be carefully tailored to both the technology and industry segment. 

4) Were critical patentability and ownership requirements met?

Aside from prior art, the biggest threats to a patent’s value are the technical requirements of the patent’s ownership and priority claims. 

Ownership is perhaps the most obvious. In the U.S., patent rights belong to the inventors and are not automatically transferred to their employers. It is important to review assignment records to verify that the purported owner actually possesses those rights.

Patent priority is somewhat less intuitive than ownership, but it can have a big impact on a cannabis patent’s validity. Applicants can file multiple related applications on different aspects of the technology. Applications with an intact priority chain are entitled to the benefit as if they were filed on the earliest application date with the claimed subject matter. The earlier the priority date, the more likely the patent will withstand prior art challenges.

Failure to file the appropriate documents at the appropriate time can break the priority chain and result in a much later priority date. This is especially problematic in cannabis patents, where the bulk of prior art has been published in the last decade. Losing 1-2 years of priority could result in dozens of additional prior art references coming into play.

Takeaways

More and more patents covering cannabis technology issue every week. In all industries, but especially cannabis, it is vital to pair patent law expertise with technical understanding of the industry. The four questions above should be carefully considered in all situations where patent valuation is at issue.

Source: https://harrisbricken.com/cannalawblog/unique-challenges-in-cannabis-patent-valuation/

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Business

EU Pressure Builds on Google as Regulators Face Calls for Massive Fine Over Search Practices

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A growing coalition of European industry groups is intensifying pressure on regulators to take decisive action against Google over allegations of unfair search practices that could reshape competition rules across the region’s digital economy.

Investigation Under Digital Markets Act Gains Momentum

The case is being examined by the European Commission under the European Union’s landmark Digital Markets Act (DMA), introduced to curb the dominance of major technology platforms and ensure fair competition.

Launched in March 2024, the investigation focuses on whether Google has been prioritising its own services in search results, potentially disadvantaging rival businesses that rely on online visibility to reach customers.

Industry Groups Demand Swift Action

Several prominent European organizations have jointly urged regulators to conclude the probe without further delay. They argue that prolonged investigations allow alleged anti-competitive practices to continue, putting European companies—especially startups—at a disadvantage.

Signatories include the European Publishers Council, the European Magazine Media Association, the European Tech Alliance, and EU Travel Tech.

In a joint statement, these groups warned that delays in enforcement are affecting innovation, profitability, and growth prospects for regional businesses competing in digital markets.

Google Denies Allegations

Google has rejected claims of bias, stating that its search algorithms are designed to deliver the most relevant and useful results to users. The company has also proposed adjustments to address regulatory concerns.

However, critics argue that these changes are insufficient and fail to address the core issue of market dominance.

Potential Billion-Euro Penalties

If found in violation of the DMA, Google could face significant financial penalties. Under EU rules, fines can reach a substantial percentage of a company’s global turnover, potentially amounting to billions of euros.

Regulators may also impose corrective measures requiring changes to business practices, which could have long-term implications for how digital platforms operate in Europe.

Wider Implications for Big Tech

The case highlights ongoing tensions between European regulators and major U.S. technology firms. In recent years, the EU has taken a more aggressive stance in enforcing competition laws, aiming to create a level playing field for local businesses.

A final ruling against Google could set a major precedent, influencing future enforcement actions and shaping the regulatory landscape for global tech companies operating within Europe.

As scrutiny intensifies, the outcome of the investigation is expected to play a critical role in defining the future of digital competition across the European Union.

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AI & Technology

Amazon Faces Potential Criminal Trial in Italy Over €1.2 Billion Tax Evasion Allegations

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Milan: U.S. tech giant Amazon is facing the prospect of a major legal showdown in Italy, after prosecutors in Milan formally requested a court to move forward with criminal proceedings over alleged tax evasion totaling approximately ₹12,500 crore (€1.2 billion).

The case targets Amazon’s European division along with four senior executives, marking one of the most significant tax-related investigations involving a global e-commerce platform in Europe.

Trial Push Despite Multi-Million Euro Settlement

The move comes even after Amazon reached a financial settlement with Italian tax authorities in December, agreeing to pay around ₹5,500 crore (€527 million), including interest, to resolve part of the dispute.

Typically, such settlements lead to the closure of criminal investigations. However, Milan prosecutors have opted to proceed, signaling a tougher stance on alleged corporate tax violations.

A preliminary hearing is expected in the coming months, where a judge will decide whether to formally indict the company and its executives or dismiss the case.

Allegations of VAT Evasion Through Marketplace Sellers

At the center of the investigation are claims that Amazon’s platform enabled non-European Union sellers to avoid paying value-added tax (VAT) on goods sold to Italian consumers between 2019 and 2021.

Prosecutors allege that the company’s marketplace structure allowed thousands of foreign vendors—many reportedly based in China—to operate without fully disclosing their identities or tax obligations. This, authorities argue, led to substantial VAT losses for the Italian government.

Under Italian law, online platforms facilitating sales can be held partially liable if third-party sellers fail to comply with tax requirements, a key point in the prosecution’s case.

Italian Government Named as Affected Party

In their filing, prosecutors identified Italy’s Economy Ministry as the injured party, citing significant financial damage resulting from the alleged tax evasion.

Legal experts say the outcome of the case could have wide-ranging implications across the European Union, where VAT systems are harmonized and similar compliance rules apply to digital marketplaces.

Multiple Investigations Add to Pressure

The VAT probe is just one of several legal challenges facing Amazon in Italy. The European Public Prosecutor’s Office is reportedly examining additional tax-related issues covering more recent years.

Meanwhile, Milan authorities are pursuing separate investigations into alleged customs fraud linked to imports from China and whether Amazon maintained an undeclared “permanent establishment” in Italy—potentially exposing it to higher tax liabilities.

In a separate regulatory action, Italy’s data protection authority recently ordered an Amazon unit to stop using personal data from over 1,800 employees at a warehouse near Rome.

Amazon Denies Allegations

Amazon has consistently denied wrongdoing and indicated it will strongly contest the allegations in court if the case proceeds. The company has also warned that prolonged legal uncertainty could impact investor confidence and Italy’s appeal as a destination for international business.

Broader Impact on Europe’s Digital Economy

If the case moves to trial, it could become a landmark moment for the regulation of global e-commerce platforms in Europe. Governments across the region are increasingly scrutinizing how digital marketplaces handle tax compliance, especially in cross-border transactions.

With online retail continuing to expand, regulators are under mounting pressure to ensure that multinational platforms and third-party sellers adhere to the same tax rules as traditional businesses.

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Aviation

IndiGo Crisis Exposes Risks of Monopoly: What If Telecom or E-commerce Collapses Next?

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Airports across India witnessed scenes of distress and confusion as thousands of passengers were stranded due to IndiGo’s massive flight disruptions. Families with medical emergencies, funerals, and personal crises were left helpless as the airline cancelled hundreds of flights without adequate communication or support.

Passengers described desperate situations — a mother pleading for sanitary pads for her daughter, a woman unable to transport her husband’s coffin, and others stranded while trying to reach family funerals or hospitals. “It was like a lockdown at the airport,” one passenger said, describing the panic that unfolded as IndiGo’s mismanagement crippled operations nationwide.

Root Cause: IndiGo’s Market Monopoly

The turmoil, industry experts argue, stems from IndiGo’s monopolistic control over India’s domestic aviation market. The airline operates nearly 2,100 flights daily and holds around 60% market share — meaning every second plane flying within India belongs to IndiGo.

This dominance has given the company unparalleled influence. When IndiGo falters, the entire aviation system suffers. Passengers are left with few alternatives, as other airlines lack capacity to absorb stranded travellers. The result: skyrocketing ticket prices, chaos at terminals, and total dependence on a single private operator.

Aviation pioneer Captain G.R. Gopinath, founder of Air Deccan, criticised the government’s inaction, noting that on some routes, IndiGo’s economy fares surged to ₹1 lakh. He compared the situation to a hostage crisis, writing that the airline “held the system ransom” and forced regulators to defer new safety rules meant to protect pilots and passengers.

Government Intervention and Regulatory Weakness

The crisis erupted after IndiGo failed to comply with the Flight Duty Time Limitations (FDTL) — rules introduced by the DGCA in January 2024 requiring adequate rest for pilots. Despite having nearly two years to adapt, IndiGo blamed the rule for operational disruptions, citing a shortage of pilots.

Under mounting public pressure, the government stepped in, temporarily relaxing FDTL norms and capping airfare hikes. Officials claimed the move was to protect passengers, but analysts say it exposed the state’s vulnerability to corporate monopolies. “The government had no option but to yield,” said one aviation policy expert, pointing out that ignoring safety regulations for short-term relief could have long-term consequences.

The crisis also rekindled memories of the June 2025 Air India crash near London, which claimed over 240 lives. Experts warn that compromising pilot rest and safety standards to maintain flight schedules could risk another tragedy.

If Telecom Giants Fail: A National Paralysis

The article raises a troubling question — what if a similar crisis struck the telecom sector, where Jio and Airtel together control nearly 80% of subscribers and serve over 780 million users?

If both networks failed simultaneously, the repercussions would be catastrophic. Internet shutdowns would halt UPI transactions, online banking, OTP verifications, video calls, OTT streaming, and emergency communications. Critical services such as airports, hospitals, stock exchanges, and small businesses — many of which rely on WhatsApp and digital payments — would come to a standstill.

In essence, a telecom breakdown could paralyse India’s digital economy, exposing the nation’s dependence on a duopoly.

E-commerce Monopoly: Another Fragile Ecosystem

The same risk looms over the e-commerce sector, where Amazon and Flipkart dominate nearly 80% of the market. A disruption similar to IndiGo’s could cripple daily life — halting delivery of groceries, medicines, and essential goods, freezing refunds and customer support, and leaving small sellers without platforms to trade.

Local retailers, freed from competition, might exploit shortages by inflating prices. Such a scenario underscores the perils of market centralisation in sectors critical to everyday living.

A Wake-Up Call for Regulators

The IndiGo crisis, analysts say, is a warning shot for policymakers and regulators. A single company’s operational failure exposed systemic weaknesses in India’s infrastructure and consumer protection mechanisms.

As the aviation regulator DGCA investigates and IndiGo works to restore normalcy, the broader lesson remains clear: unchecked monopoly power in any essential service — whether air travel, telecom, or e-commerce — poses a direct threat to economic stability and citizen welfare.

Without stronger competition laws, redundancy frameworks, and regulatory oversight, India risks repeating this crisis across multiple sectors — each time with millions of citizens paying the price.

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