Psychedelic Patents

MagicMed – Patent Wizard or Late to the Game?

In September of 2020, we published an article about MagicMed, wondering whether they were going to become psychedelic industry’s first patent troll. At that time, MagicMed had issued a few press releases and its CEO, Joseph Tucker had made some statements indicating that the company’s strategy was to patent and out-license compounds without any intention of conducting clinical trials or developing drugs. Fast-forward to January 2021 and it looks like our suspicions were exactly right: In an interview with Steve Darling from Proactive, Mr. Tucker explained that MagicMed’s strategy is to “capture as much intellectual property as possible and the most valuable intellectual property. ” See video below for interview.

Consistent with this patent-focused strategy, Dr. Joseph Tucker, CEO of MagicMed recently announced that MagicMed’s patent portfolio includes 12 patent applications for 9 different chemical compound categories with the potential to protect over 125 million individual molecules.

Mr. Tucker distinguished MagicMed’s “unique” strategy from other companies in the space but emphasizing that MagicMed intends to extract profits through licensing its intellectual property rather than conducting research and developing drugs. “With novel compounds, manufacturing methods, pharmacological properties, and patent filings in place, the company’s partners can focus on what they do best—running clinical trials and securing approvals. This unique business model makes MagicMed a facilitator to the entire psychedelics industry and could allow MagicMed to maximize its market potential.”

“Magic” or Smoke and Mirrors?

Some commentators have already taken issue with MagicMed’s strategy, which boils down to extracting royalties from other entities (“partners”) focused on developing psychedelic drugs. For these people there is good news: While MagicMed claims to be “well-positioned to capitalize on its diverse derivative library,” they also appear to be rather naive when it comes to patent law. As a result MagicMed will likely face an uphill battle getting any of its patent claims to issue. And, there’s a chance that their compounds are owned by someone else, who filed patents earlier. Here are three key points:

  1. MagicMed did not begin to file it’s patent applications until mid-2020. On July 9, 2020 MagicMed Industries Inc. (“MagicMed”) announced that it filed it’s first provisional patent application with the United States Patent and Trademark Office (USPTO), allegedly covering compositions of matter, drug formulation and process of preparation claims for novel psilocybin derivatives.  At that time, MagicMed characterized this patent filing as “the first in a series of applications that together will protect the Company’s broad portfolio of novel psilocybin molecular derivatives, the PsybraryTM.”
  2. On August 24th, 2020, MagicMed issued a press release confirming the company’s intention to file patent applications.  According to the press release, “MagicMed Industries intends to file numerous patents to stake broad claims over the new derivative molecules contained in the Psybrary™, from which the company’s partners can gain a significant competitive edge in new product development using molecules that are fully patent protected.”
  3. It wasn’t until December of 2020 that MagicMed completed filing the “12 patent applications for 9 different chemical compound categories with the potential to protect over 125 million individual molecules.” That was last month. And the rest of the psychedelics industry had already caught onto the idea of creating and filing intellectual property.

MagicMed was Late to the Game.

MagicMed’s priority dates could not possibly go back early than mid-2020 when it filed its first provisional patent application on psilocybin derivatives. And, MagicMed’s other patent applications weren’t filed until at least Q4 of 2020. (Before that, Mr. Tucker was boasting about his “intention” to file applications.) Given that patent applications do not publish until 18 months after their earliest priority date, MagicMed has no idea about other entities filing patent applications between about June of 2019 and the present day. Any disclosures during that period of time would create prior art that would anticipate MagicMed’s patent application.

Similarly, Mr. Tucker has no idea whether other entities filed competing patent applications between June of 2019 and MagicMed’s first patent filing. Notably, the psychedelic industry had fully embraced patents by that time; so it wouldn’t be surprising if lots of patent applications were filed between June of 2019 and July of 2020. Taken all together, the story of MagicMed could have an ironic outcome: MagicMed’s compounds could infringe other companies’ patents! If that happens, it will be curious to see if Mr. Tucker views those patent infringement lawsuits as “facilitating” MagicMed’s business.

Psychedelic Patents

Core One Labs Buys Volcan Bio and Patents

On December 31, 2020, Core One Labs announced the acquisition of Vocan Bio Inc.. As discussed below, the deal appears to center around intellectual property. Through the deal, Core One Labs acquired Vocan’s patent pending biosynthetic method of producing API grade psilocybin. Core One Labs intends to leverage this patentable technology and also develop more IP as part of its acquisition of Vocan Bio Inc.. Notable, neither Core One Labs nor Vocan have any granted patents or published patent applications assigned to them. See also Tips on Evaluating Psychedelic Patents.

According to Core One’s press release, “The acquisition of Vocan gives the Company [Core One] all the necessary licensing and research facilities to continue the development of psilocybin as an alternative therapy.” Here, the research facilities seem relevant to developing new technology but it is unclear what licensing facilities would be necessary to that development.

Core One further explains that “Vocan’s leading research team, led by Dr. Hancock, combined with its intellectual property to produce and patent biosynthesized API grade psilocybin, positions Core One as a leader in the psychedelic space.” Here, it seems clear that Core One has purchased Vocan’s (potentially patentable) biosynthetic methods. However, it remains unclear how those methods could be used to patent API grade psilocybin, which is a known molecule (i.e., not “new”). Others have developed new crystalline forms (e.g., Compass) or combinations of mushroom extracts from different species (e.g., Paul Stamets) but the press release does not offer clues as to whether Core One has plans to make new forms of psilocybin.

Core One further explains, “If Vocan can produce psilocybin at scale [via a patentable method], it has the potential to provide products at a lower cost than every other company, disrupting the entire industry.” This statement suggests that Core One could make psilocybin cheaply (via a patented method) and leverage their competitive advantage despite not having a patent on the resulting compound, psilocybin which is in the public domain. This is consistent with the following statement from Core One: “Vocan’s team of scientists, specializing in protein expression and biosynthetic fermentation, have discovered a patentable method of producing psilocybin, the active ingredient in psychotropic mushrooms.” (Notably, psilocybin is not the only active ingredient in psychotropic mushrooms.)

Aside from the acquisition of Vocan, Core One Labs “has developed a patent pending thin film oral strip which dissolves instantly when placed in the mouth and delivers organic molecules in precise quantities to the bloodstream, maintaining excellent bioavailability. With this technology, the Company intends to further develop its IP technology to focus on delivering psychedelic molecules with an initial focus on psilocybin.” Apparently Core Labs intends to use its newly acquired methods of making psilocybin to source the active compounds needed for its thin film oral strips.


Psychedelic Patents

Is Patenting Psychedelics Unfair?

On January 1st, 2021 the team of Konstantin Gerber, Inti García Flores, Angela Christina Ruiz, Ismail Ali, Natalie Lyla Ginsberg, and Eduardo E. Schenberg (herein “Schenberg” or “the authors”) published and article title “Ethical Concerns about Psilocybin Intellectual Property” in ACS Pharmacology & Translational Science. To summarize, the authors assert that it is unethical to make modern pharmaceuticals inspired by old natural medicinals without somehow compensating the indigenous people who have long used natural medicinals. The authors cited Psilocybin Alpha’s “Patent Tracker” to illustrate the recent trend in patenting psychedelic innovation. This conclusion is based on a general misunderstanding between (a) developing and patenting new forms of psychedelic compounds and (b) removing existing forms of those compounds from the public domain.

New Technology does not Remove Old Technology from the Public Domain.

Schenberg notes that naturally occurring “traditional” or “indigenous” psychedelic medicines have existed for millennia. Yes. Those medicines are in the public domain (aka the “prior art”). These can not be patented. The authors specifically point out that the Mazatec community is one indigenous community that has used naturally occurring psychedelic medicines for millennia. No new development or patent attorneys can take those medicines away from the Mazatecs or anyone else. Only new technology can be patented.

Developing new forms of old natural medicinals does not take anything away from the indigenous people. Researching and patenting psilocybin (see Compass) and developing pharmaceutical formulations (e.g., Compass Pathways’ crystalline form of psilocybin, COMP360) does not affect existing practices of using magic mushrooms. Rather, the patent system rewards the inventors of new technology with a limited monopoly on that technology as an incentive to bring it into existence for future generations. In the case of Compass, they developed a new psilocybin formulation (with a new, unnatural crystalline form) that is suitable for modern day medicine. The standard for patenting “new” technology is actually lower than this. For example, Paul Stamets has filed numerous patent applications on new combinations of mushroom extracts, which simply combine mushroom extracts in a new way. Arguably, Mr. Stamets is entitled to a patent on these new combinations (even though the compounds previously existed) because the new combination provides a new beneficial result, e.g., enhanced neuroregenerative properties.

New Drug Development can be Patented Despite Older Technology.

Unlike old medicines, newly developed drugs (including new combinations of natural substances, see, e.g., Paul Stamets above) can be patented. Schenberg contrast thousands of years of natural medicinals to the recent trend to make western medicines based on them: “Researching psilocybin is configuring a bioprospecting project resulting in the pharmaceutical industry pursuing innovation through intellectual property rights….” Here, note that the new technology arises from researching, “bioprospecting,” and “pursuing innovation.” This is not taking something out of the public domain. Rather, the research efforts add something new– arguably something valuable. It is that innovation that gives rise to intellectual property rights. Also, no one “pursues innovation through intellectual property rights.” Rather, intellectual property rights are awarded to those who successfully innovate.

The authors suggest that that developing new pharmaceutical products inspired by natural medicinals is unethical because the pharmaceutical companies have “no plans for reciprocity with or compensation for the indigenous communities who have protected these traditional mushroom practices for millennia.” Here, note that the indigenous communities aren’t losing anything. They are free to continue enjoying the benefits of their traditional practices. No one is stealing anything from them. The traditional medicines remain in the public domain. And the present innovators (like Compass) enjoy the fruits of their new technology. New developments of old medicinals can be patented.

As the authors point out, “… the Mazatec indigenous communities who stewarded these traditional medicines for millenia are not party to any of these patents, despite a number of international treaties asserting indigenous rights to their intangible cultural heritage.” Correct. The Mazatec indigenous communities did not invent the new technology. So, they are appropriately not party to the patents covering the new technology. Likewise, today’s innovators (like Compass Pathways) are have no claims to the “intangible cultural heritage” of the Mazatec people, e.g., traditional psilocybin medicines that have been used for millenia. Only new technology can be patented.

Lastly, the authors posit that “When the intellectual “property” derived from naturally occurring compounds is the prior art of indigenous people, we are obliged to explore the ethics of shareholders reaping the financial benefit from these compounds. Reflecting on these ethical dilemmas may offer frameworks to understand and solve for the ongoing harm of extractive economics, and perhaps even point the way toward reciprocal and reparative arrangements with indigenous stewards of medicines and molecules around the world.” Here, the authors seem to recognize that today’s new technology and new intellectual property is actually different; and they raise the question as to whether practitioners of earlier technologies should be compensated for newer versions. This is an interesting point for reflection.

  • Should Telsa compensate Ford for its electric car sales simply because Ford made cars before Tesla?
  • Should Apple compensate Edison for iPhone sales?
  • There are obviously lots of other comparisons

Arguably the existing patent system strikes a good balance in encouraging innovators to disclose new technology by offering them a limited monopoly. However, requiring today’s innovators to compensate others for “traditional” practices that have existed for millenia could create disincentives for innovation. In the case of the Mazatecs, the authors effectively suggest affording them intellectual property rights that extend for thousands of years– instead of existing system while limits the patent rights to about 20 years.