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One of the most important aspects of the psychedelics business—and one that is becoming more contentious—is about securing and protecting the patent for the specific molecule or synthetic that a psychedelics company is banking on because it can essentially protect the investment of millions of dollars a startup spends on setting up and running clinical trials, hiring expensive medical staff and other business development expenses.

Patents give protections for making, using, or selling the patented inventions of a patent holder for 20 years. They are a form of government-granted monopoly. The public policy justification for patents rests on the theory that the right to exclude competitors incentivizes innovation and encourages inventors to disclose their inventions to the public, instead of maintaining them as trade secrets. 

But when it comes to an emerging industry like psychedelics, there are no clear-cut answers to what patents should do, what they can do, and who can own them.

According to an article in the Harvard Law Review, the sudden influx of psychedelic patents has prompted criticism from stakeholders including patient advocates, scientists, journalists, lawyers, and members of Indigenous communities. “Some claim patents on psychedelics monopolize products of nature that should remain affordable and widely available. They contend that patents can exploit the traditional knowledge of Indigenous communities without permission or adequate acknowledgment and compensation. Others argue psychedelic patents are making a small number of companies gatekeepers for the emerging psychedelics industry, which could inhibit research, stifle innovation, and restrict access to needed therapies.”

One of the unique difficulties in securing a patent in the psychedelics industry is making decisions based on “prior art”, defined as “references or documents which may be used to determine novelty and/or non-obviousness of claimed subject matter in a patent application.”

Psychedelics are so new that there really isn’t much prior art. And you can’t patent a plant. But those are just a few of the trapdoors of patents in psychedelics.

To explain the patent issue in more detail, Psychedealia talked with Peter Rands, a patent attorney, and the CEO and founder of biotech company Small Pharma (OTC: DMTTF), working on DMT assisted psychotherapy. He used DMT as an example. “DMT is a molecule that is a known compound. You cannot patent what is known,” Rands said. “The specific application of known compounds can be patented if there is something novel and non-obvious about it.”

The interesting thing about the psychedelics environment, he said, is that for the most part, the private companies that are developing proprietary medicines—the fundamental evidence that these molecules were effective as kind of antidepressant medicines, maybe expanding beyond depression into other mood disorders or other neurological conditions—was put into the public domain by academia, such as Johns Hopkins and Imperial College. “So no one has proprietorship either on the fundamental molecule or the specific applications,” he said. “This opens up the question of the value of secondary patents.”

An example of a secondary patent is the specific polymorph that one of the top psychedelics industry companies, Compass Pathways, has patented with their Compass360 psilocybin therapy, which is the company’s synthesized psilocybin formulation being developed for psilocybin therapy in treatment-resistant depression. “I worked for three years at a generics company, where what we were doing was finding ways around patents, or challenging them in court,” Rands said. “And a patent that covers a very narrow polymorph is really easy to design around.”

He said that he keeps an eye on patents in the psychedelics industry. “Absolutely. There have been some interesting ones. There are a lot of companies trying to come up with novel combinations. A lot of companies are finding the sort of specific ways to assess the subjects and see what they can get protection around with kind of a pre-screening mechanism, basically, for people that will be receptive or unreceptive to psychedelic therapy.”

He said that Small Pharma is specifically focusing on the manufacturing methods for producing their DMT, which they think is more efficient than any other producers. “We published it fully in our patent application. So you know, to the extent that it’s protectable, it is also in the public domain.”

Compass Pathways (NASDAQ: CMPS) is currently addressing a patent challenge from Freedom to Operate (FTO). FTO is a non-profit founded to advance science and education, specifically to support and facilitate scientific research, in the public interest and for the public benefit. 

FTO is currently challenging Compass Pathways’ first patent with claims covering its Form A hydrate psilocybin. The Form A hydrate is distinct from the anhydrate psilocybin for which the company has already been granted eight patents in the U.S., UK, Germany and Hong Kong. It is used in Comp360.

It’s the fifth time that FTO has challenged a Compass Pathways patent. FTO claims the patent on this form of crystalline psilocybin is invalid because the substance was publicly used prior to the date on which the patent for the claimed invention was first filed. 

FTO claims that the form of psilocybin had first been used as far back at 1963, according to an open letter on the subject. The challenge is expected to continue, but it has genuinely caught the attention of the psychedelics community.

Christian Angermayer, who founded Atai Life Sciences and helped found Compass Pathways, expressed his opinion about patents in an open letter, starting off with a sort of Patents 101 discussion: “Patents were actually implemented in the U.S. to reward innovators in the short term with a temporary monopoly,” he wrote. “Patents and any similar forms of protection like data exclusivity can be compared to a mortgage on a house. For a certain period of time, society has to pay back the mortgage (assuming the house is great, and people want to move in), but after that, society owns it and can live there rent-free.”

Angermayer then added that he feels that the patent discussion is mixed up with other societal issues. “Many use this discussion to express their discomfort with current FDA regulations,” he wrote, commenting on the burdens and expense of trials. Others, he wrote, use the patent discussion to express their discomfort with capitalism itself. “I personally believe that capitalism—though it has its flaws—is by far the best economic system tried to date and that many, especially young people who flirt with socialism at the moment, forget the destruction, pain and death socialism has brought for hundreds of millions of people over the years. I would be interested in having this discussion, but…it’s not a psychedelic discussion.”

So what can be done? A more preventative approach to improving the quality of psychedelic patents involves bolstering the prior art search by creating prior art repositories, according to the Harvard Law Review. Another potential assistance would be tightening up U.S. patent law requirements for novelty and non-obviousness. 

Some call for patent pledges in the psychedelics industry. And some say that this industry should not use patents at all. “Because psychedelics represent the most innovative approach to mental healthcare in decades, and the most promising potential solution to the mental health crisis, they are too important to be monopolized,” the Harvard Law Review concluded. “Keeping psychedelics in the public domain, off-limits to the patent system, may be akin to prohibiting patents on abstract ideas, products of nature, and natural phenomena, because they are fundamental tools of scientific inquiry.”