DCT

1:26-cv-20190

Natural Extraction Systems LLC v. Green Thumb Industries Inc

Log In
Key Events
Complaint

I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 1:26-cv-20190, S.D. Fla., 01/12/2026
  • Venue Allegations: Plaintiff alleges venue is proper in the Southern District of Florida because Defendants maintain physical, regular, and established places of business within the district and have committed the alleged acts of patent infringement there, either directly or through subsidiary and alter ego entities.
  • Core Dispute: Plaintiff alleges that Defendants’ processes for producing cannabis distillate infringe four patents related to methods for chemically modifying cannabinoids, primarily through gas-phase decarboxylation.
  • Technical Context: The technology concerns methods for converting cannabinoid acids (e.g., THCA) found in cannabis plants into their active forms (e.g., THC) for use in consumer products, a critical step in the manufacturing process for the legal cannabis industry.
  • Key Procedural History: The complaint does not mention any prior litigation, inter partes review proceedings, or licensing history between the parties. A significant portion of the complaint is dedicated to establishing alter ego and agency relationships between the parent defendant (Green Thumb Industries Inc.) and its Florida-based subsidiaries.

Case Timeline

Date Event
2012-01-01 Plaintiff Natural Extraction Systems, LLC founded.
2017-10-01 Florida grants a Medical Marijuana Treatment Facility license to an entity later acquired by Defendants.
2018-02-01 Merger transfers the MMTC license to Defendant KSGNF III.
2018-06-01 Green Thumb Industries Inc. acquires control of its subsidiary structure through a reverse takeover.
2018-08-10 Earliest Priority Date for all Asserted Patents (filing of U.S. Provisional App. No. 62/717,235).
2018-11-01 Defendant GTI Florida acquires Defendant KSGNF III.
2020-06-02 U.S. Patent No. 10,669,248 Issued.
2023-05-09 U.S. Patent No. 11,643,402 Issued.
2025-05-13 U.S. Patent No. 12,297,181 Issued.
2025-08-01 RYTHM, Inc. allegedly acquires VCP IP Holdings, LLC.
2025-09-23 U.S. Patent No. 12,420,214 Issued.
2026-01-12 Complaint Filing Date.

II. Technology and Patent(s)-in-Suit Analysis

U.S. Patent No. 10,669,248 - *"Methods to Chemically Modify Cannabinoids,"* Issued June 2, 2020

The Invention Explained

  • Problem Addressed: The patent’s background section describes that traditional methods for decarboxylating cannabinoids (e.g., converting non-psychoactive THCA into psychoactive THC) require prolonged heating (Compl. ¶¶ 194-195; ’248 Patent, col. 1:20-33). This process is inefficient and generates undesirable side products, such as cannabinol (CBN), which can cause drowsiness and degrade the quality of the final product (’248 Patent, col. 1:28-33).
  • The Patented Solution: The invention proposes a method to rapidly decarboxylate cannabinoids by performing the chemical reaction in the gas phase. The process involves vaporizing the cannabinoid carboxylic acids and then immediately contacting the vapor with a heat sink to condense the resulting activated cannabinoid (’248 Patent, Abstract; col. 2:20-24). This approach is described as lowering the activation energy of the reaction, which minimizes the time the molecules are exposed to high temperatures and thereby reduces the formation of unwanted byproducts (’248 Patent, col. 5:6-10).
  • Technical Importance: This method purports to enable the production of purer, more potent cannabinoid distillates with greater efficiency and fewer undesirable degradation products compared to conventional heating methods (Compl. ¶10; ’248 Patent, col. 1:46-48).

Key Claims at a Glance

  • The complaint asserts independent claims 1, 8, and 12 (Compl. ¶315).
  • Independent Claim 1 recites a method with the following essential elements:
    • Providing a composition with a native cannabinoid molecule (containing a carboxyl group) in a liquid or solid phase.
    • Contacting the composition with sufficient energy to convert it into a modified cannabinoid molecule in a gas phase.
    • Contacting the modified molecule with a heat sink to condense it into a liquid distillate.
    • Achieving at least 95% conversion of the native molecule into the condensed molecule.
    • Collecting the liquid distillate.
  • Independent Claim 8 adds the limitation of:
    • Coating a heated surface with the composition at a surface-area-to-volume ratio greater than 500 per meter.
  • Independent Claim 12 requires the initial composition itself to have:
    • A surface-area-to-volume ratio greater than 1000 per meter.
  • The complaint also asserts dependent claim 2, which requires the final distillate to have a molar ratio of the condensed cannabinoid to cannabinol greater than 100:1 (Compl. ¶188).

U.S. Patent No. 11,643,402 - *"Gas Phase Methods to Decarboxylate Cannabinoids,"* Issued May 9, 2023

The Invention Explained

  • Problem Addressed: Similar to the '248 patent, the '402 patent addresses the problem that prolonged heating used to activate cannabinoids also produces undesirable chemical modifications and byproducts (’402 Patent, col. 1:21-25).
  • The Patented Solution: The invention discloses a gas-phase decarboxylation method that emphasizes starting with a composition having a high surface-area-to-volume ratio (greater than 1000 per meter) (’402 Patent, col. 2:50-55). This high ratio facilitates rapid vaporization and conversion upon contact with sufficient energy, after which the resulting activated cannabinoid vapor is condensed and collected (’402 Patent, col. 1:30-41).
  • Technical Importance: The claimed method aims to maximize the efficiency of cannabinoid activation while preserving the chemical integrity of the final product by minimizing exposure to degradative conditions (’402 Patent, col. 1:24-25).

Key Claims at a Glance

  • The complaint asserts independent claim 1 (Compl. ¶242).
  • Independent Claim 1 recites a method with the following essential elements:
    • Providing a composition comprising native cannabinoids with a carboxyl group, where the composition has a surface-area-to-volume ratio greater than 1000 per meter.
    • Contacting the composition with sufficient energy to convert the native cannabinoid into a modified cannabinoid in a gas phase.
    • Contacting the modified cannabinoid with a heat sink to condense it into a liquid distillate.
    • Collecting the liquid distillate.
  • The complaint also asserts dependent claims 8, 14, 15, and 18, which add limitations related to conductive heating and specific chemical concentrations in the final distillate (Compl. ¶¶ 238-241).

U.S. Patent No. 12,297,181 - *"Methods to Chemically Modify Cannabinoids,"* Issued May 13, 2025

  • Technology Synopsis: This patent discloses methods to chemically modify cannabinoids by using a thin-film evaporator. The process involves coating a heated surface with an extracted cannabis oil at a high surface-area-to-volume ratio to perform a gas-phase conversion, followed by condensation. The claims specifically require limiting the formation of byproducts such as cannabinol (CBN) and delta-8-tetrahydrocannabinol (Δ8-THC) to specific low levels (’181 Patent, Abstract; claims 1, 2, 9).
  • Asserted Claims: Independent claims 1, 2, and 9 (Compl. ¶¶ 270, 271, 273).
  • Accused Features: The complaint alleges that Defendants' use of wiped-film and roller-film distillation systems, which are types of thin-film evaporators, to produce cannabis distillates infringes the ’181 patent (Compl. ¶¶ 276, 282).

U.S. Patent No. 12,420,214 - *"Methods to Produce Products Comprising Cannabinoids,"* Issued September 23, 2025

  • Technology Synopsis: This patent claims a method of producing a cannabinoid product by starting with a specific composition (e.g., an oil with less than 15% water and at least 1% THCA), contacting it with a heated surface under vacuum to cause conversion via conduction, condensing the resulting vapor, and collecting the distillate. The patent further claims methods that include providing a vaporizer cartridge and filling it with the produced distillate (’214 Patent, Abstract; claims 1, 4, 18).
  • Asserted Claims: Independent claims 1 and 18 (Compl. ¶¶ 285, 292).
  • Accused Features: The complaint alleges infringement based on Defendants’ use of short-path distillation systems (thin-film evaporators) to create distillate and their subsequent manufacture and filling of Rise and &Shine-branded vaporizer cartridges with that distillate (Compl. ¶¶ 296, 297, 312).

III. The Accused Instrumentality

Product Identification

  • The accused instrumentalities are the processes Defendants use to manufacture cannabis distillate, specifically identified as short-path distillation, wiped-film distillation, and roller-film distillation (Compl. ¶¶ 207, 212-214). Products made from these processes, including vaporizer cartridges and edibles sold under brands such as "&Shine" and "RYTHM," are also accused of infringement (Compl. ¶¶ 29, 203-204).

Functionality and Market Context

  • The complaint alleges that Defendants use "KDT distillation" systems (a brand of wiped-film distillation) and "Delta Separations System" (a brand of roller-film distillation) to produce their cannabis distillates (Compl. ¶¶ 210-214). These processes allegedly involve spreading a cannabis extract as a thin film across a heated surface, which simultaneously converts inactive cannabinoid acids (THCA) into their active form (THC) in a gas phase and vaporizes them (Compl. ¶¶ 218-221, 230-233). This vapor is then allegedly condensed using a "cold trap" and collected as a distillate (Compl. ¶¶ 222-224). The complaint alleges this distillate is used in products generating "hundreds of millions of dollars in annual revenue" (Compl. ¶30). As evidence, the complaint references packaging for a "cannabis vape cartridge" that is allegedly "Manufactured by KSGNF LLC" (Compl. ¶127).

IV. Analysis of Infringement Allegations

U.S. Patent No. 10,669,248 Infringement Allegations

Claim Element (from Independent Claim 1) Alleged Infringing Functionality Complaint Citation Patent Citation
providing a composition comprising cannabinoids, in which the cannabinoids comprise a native cannabinoid molecule... and the native cannabinoid molecule is in a liquid phase or a solid phase Defendants provide a cannabis extract containing liquid-phase THCA as the input for their distillation systems. ¶¶193, 217, 219 col. 7:3-9
contacting the composition with sufficient energy to convert the native cannabinoid molecule into... a modified cannabinoid molecule in a gas phase Defendants operate short-path distillation systems that heat the extract, causing the THCA to convert into THC and enter a gas phase as a vapor. ¶¶220-221 col. 7:10-14
contacting the modified cannabinoid molecule with a heat sink to condense the modified cannabinoid molecule into a condensed cannabinoid molecule in a liquid distillate The distillation systems allegedly use a "cold trap," which functions as a heat sink, to condense the gas-phase THC into a liquid distillate. ¶¶222-223 col. 7:15-18
in which at least 95% of the native cannabinoid molecule is converted into the condensed cannabinoid molecule per mole The complaint alleges this conversion rate is met based on analyses of Defendants' final products, which contain THC and less than 0.1% of the original THCA. ¶¶225-226 col. 19:57-60
collecting the liquid distillate Defendants collect the resulting distillate from their systems to manufacture commercial cannabis products. ¶224 col. 7:19

U.S. Patent No. 11,643,402 Infringement Allegations

Claim Element (from Independent Claim 1) Alleged Infringing Functionality Complaint Citation Patent Citation
providing a composition comprising cannabinoids wherein the composition has a surface-area-to-volume ratio that is greater than 1000 per meter... in either a liquid phase or a solid phase Defendants' wiped-film and roller-film systems allegedly spread the cannabis extract into a thin film of 100 to 500 microns on a cylindrical surface, which is alleged to create the claimed ratio. ¶¶247-248 col. 2:50-55
contacting the composition with sufficient energy to convert the native cannabinoid molecule into... a modified cannabinoid molecule in a gas phase Defendants' systems allegedly transfer energy from a heated surface to the thin film of liquid, causing the conversion of THCA to THC in a gas phase. ¶¶249-251 col. 2:33-37
contacting the modified cannabinoid molecule with a heat sink to condense the modified cannabinoid molecule into a condensed cannabinoid molecule in a liquid distillate The process allegedly uses a cold trap, which functions as a heat sink, to condense the gas-phase THC into a liquid distillate. ¶265 col. 2:38-41
collecting the liquid distillate Defendants collect the resulting distillate, which is then used to make and sell products such as vape cartridges. ¶266 col. 2:41
  • Identified Points of Contention:
    • Scope Questions: A central question may be whether standard chemical engineering equipment, such as the "wiped-film" and "roller-film" distillation systems allegedly used by Defendants, falls within the scope of the patented methods. The analysis may focus on whether the patents claim a specific novel process or merely apply known principles to a new field.
    • Technical Questions: The complaint's allegations regarding quantitative limitations (e.g., "surface-area-to-volume ratio," "95% conversion," "molar ratio greater than 100:1") appear to be inferred from the composition of the final products (Compl. ¶¶ 203, 226, 248). A point of contention may be whether these product characteristics are sufficient evidence that the accused process itself meets every step required by the method claims.

V. Key Claim Terms for Construction

  • The Term: "surface-area-to-volume ratio"

  • Context and Importance: This quantitative term appears in independent claims of the '248, '402, and '181 patents and is central to the infringement allegation. The dispute will likely turn on how this ratio is calculated for a liquid film spread on a surface, as opposed to a collection of particulates, and whether the Defendants' alleged film thickness of "100 to 500 microns" (Compl. ¶234) necessarily satisfies the claimed thresholds of "greater than 500 per meter" or "greater than 1000 per meter."

  • Intrinsic Evidence for Interpretation:

    • Evidence for a Broader Interpretation: The specifications emphasize the functional goal of a high ratio: to ensure that energy "favors vaporization and decarboxylation relative to the heating and vaporization of other molecules" (’248 Patent, col. 6:12-15). This functional description could support a construction that encompasses any technique achieving this goal, including creating a thin liquid film.
    • Evidence for a Narrower Interpretation: The specifications provide detailed examples of calculating this ratio for ground plant matter (particulates) suspended in a gas (’248 Patent, col. 17:1-4). A party could argue that the term's meaning is limited by these specific embodiments and does not directly read on a liquid film coated on an evaporator wall, which might be characterized differently in the art.

  • The Term: "heat sink"

  • Context and Importance: The infringement theory relies on construing the "cold trap" in Defendants' alleged short-path distillation systems as a "heat sink" (Compl. ¶¶ 222-223). Whether this standard piece of distillation equipment meets the claim limitation will be a key issue.

  • Intrinsic Evidence for Interpretation:

    • Evidence for a Broader Interpretation: The patents describe the heat sink's function as being to "condense the decarboxylated cannabinoid" (’248 Patent, col. 2:23-24). This functional language suggests that any component performing this condensation function, such as a cold trap, would fall within the term's scope. The specification also provides diverse examples, including "a colloid," "an aerosol," and a "fluid-cooled condenser," supporting a broad definition (’248 Patent, col. 13:35-37; ’181 Patent, col. 15:61-63).
    • Evidence for a Narrower Interpretation: A party might argue that by providing novel examples like colloids and sprays (’248 Patent, col. 13:35-37), the patentee was distinguishing the invention from conventional condensers used in standard distillation, potentially suggesting that a "cold trap" is part of the prior art the patent sought to improve upon.

VI. Other Allegations

  • Indirect Infringement: The complaint extensively alleges induced infringement by the parent company, Green Thumb Industries Inc. (GTI). It claims GTI knowingly instructed its subsidiaries to perform the infringing processes through "standard operating procedures," controlled the manufacture and sale of the resulting products, and enforced common standards across its enterprise (Compl. ¶¶ 321, 323, 327, 337).
  • Willful Infringement: The complaint alleges that Defendants have had "actual knowledge" of the asserted patents "at least as of the filing date of this complaint" (Compl. ¶¶ 319, 335, 351, 367). This allegation forms the basis for a claim of willful infringement, for which Plaintiff seeks enhanced damages under 35 U.S.C. § 284 (Compl. Prayer for Relief (e)).

VII. Analyst’s Conclusion: Key Questions for the Case

  • A central issue will be one of process characterization: Can Plaintiff demonstrate through discovery and expert testimony that Defendants' commercial-scale distillation processes—allegedly standard wiped-film and roller-film evaporation—actually meet the specific quantitative limitations recited in the claims, such as the surface-area-to-volume ratios and byproduct concentration limits?
  • A key legal question will be one of corporate liability: The complaint dedicates extensive detail to alter ego allegations. The case may turn on whether Plaintiff can pierce the corporate veil and prove that parent company GTI exerts sufficient control over its subsidiaries to be held directly liable for their alleged infringement in Florida.
  • A fundamental question of claim scope will be whether the patented methods, which describe gas-phase decarboxylation with an emphasis on novel process parameters, can be construed to cover established chemical engineering techniques like thin-film evaporation applied to cannabis extract, or if those techniques are distinct from what the patents claim and enable.