Global IP Holding Inc v. Verano Holdings Corp

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Global IP Holdings, LLC (California)
  • Defendant: Verano Holdings Corp. (Canada) and Verano Holdings, LLC. (Delaware)
  • Plaintiff’s Counsel: DNL Zito
• Case Identification: 1:25-cv-03043, N.D. Ill., 03/21/2025
• Venue Allegations: Venue is alleged to be proper based on Defendants maintaining a regular and established place of business in the Northern District of Illinois.
• Core Dispute: Plaintiff alleges that Defendants' process for producing cannabis extracts infringes patents related to methods for selectively extracting cannabinoids using super-cooled ethanol to minimize chlorophyll contamination.
• Technical Context: The technology concerns chemical extraction processes for isolating active compounds from plant matter, a critical step in the manufacturing of cannabis concentrates and related consumer products.
• Key Procedural History: The asserted patents share a common priority date and subject matter, with U.S. Patent No. 10,814,248 being a continuation-in-part of the application family that led to U.S. Patent No. 10,507,407. The complaint does not mention any prior litigation or administrative proceedings involving these patents.

Case Timeline

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

U.S. Patent No. 10,507,407 - Methods to reduce chlorophyll co-extraction through extraction of select moieties essential oils and aromatic isolates

Issued December 17, 2019

The Invention Explained

• Problem Addressed: The patent’s background describes the drawbacks of conventional cannabis extraction methods. Hydrocarbon-based solvents are noted for their volatility and safety risks, while other methods tend to co-extract undesirable constituents such as plant lipids and chlorophyll, which then require costly and complex post-extraction purification steps ('407 Patent, col. 1:24-56).
• The Patented Solution: The invention proposes a method using super-cooled 100% grain ethanol as a solvent. By chilling both the solvent and the plant material to a specific low-temperature range (e.g., -30°C to -50°C), the process selectively dissolves target molecules like cannabinoids and terpenes while leaving behind the less-soluble lipids and chlorophyll ('407 Patent, col. 2:6-8; Fig. 1). This is intended to yield a purer initial extract, simplifying the overall manufacturing process.
• Technical Importance: This method purports to offer a safer alternative to volatile hydrocarbon extractions and a more efficient alternative to supercritical CO2 extractions by minimizing the need for extensive downstream purification of the crude extract ('407 Patent, col. 1:57-65).

Key Claims at a Glance

• The complaint asserts independent claim 1 (Compl. ¶33).
• Claim 1 requires, in combination:
  • (i) a pre-processing step of lowering a solvent’s temperature to a range of -30°C to -50°C;
  • (ii) contacting the solvent and plant substrate at that temperature range to create an emulsion;
  • (iii) reducing the emulsion via atmospheric evaporation of the solvent;
  • (iv) recovering the solvent from the emulsion; and
  • (v) purging the remaining solvent to yield a "resultory extract" that is "substantially free of any lipids and chlorophyll."
• The complaint alleges infringement of "one or more claims," suggesting the right to assert dependent claims is reserved (Compl. ¶34).

U.S. Patent No. 10,814,248 - Methods to reduce chlorophyll co-extraction through extraction of select moieties essential oils and aromatic isolates

Issued October 27, 2020

The Invention Explained

• Problem Addressed: As a continuation-in-part, the '248 Patent addresses the same technical problem as the '407 Patent: the inefficient co-extraction of undesirable compounds like chlorophyll during cannabinoid extraction ('248 Patent, col. 1:31-47).
• The Patented Solution: The '248 Patent describes a similar cold extraction method but explicitly broadens the definition of the solvent. The claims encompass not only pure ethanol but also solvent mixtures, such as 95% ethanol combined with 5% of another non-ethanol solvent, or other specified materials like heptane or hexane ('248 Patent, Abstract; col. 2:48-62). The core inventive concept of using cryogenic temperatures for selective extraction remains central.
• Technical Importance: The patent appears designed to cover a wider range of industrial practices by claiming processes that utilize common solvent blends rather than being limited to pure 100% grain ethanol ('248 Patent, col. 24:23-29).

Key Claims at a Glance

• The complaint asserts independent claim 1 (Compl. ¶39).
• Claim 1 is structurally similar to claim 1 of the ’407 Patent but adds a preamble limitation that the process "excludes use of liquid carbon dioxide" and, critically, includes an optional limitation defining the solvent composition. The key elements are:
  • A process that excludes liquid carbon dioxide;
  • (i) a pre-processing step of lowering a solvent’s temperature to -30°C to -50°C;
  • (ii) contacting the solvent and plant substrate at that temperature;
  • (iii) atmospheric evaporation to reduce the resulting emulsion;
  • (iv) recovering the solvent;
  • (v) purging to yield an extract substantially free of lipids and chlorophyll;
  • Wherein the solvent is optionally defined as "(a) 95% ethanol and 5% of a solvent that is another solvent that does not comprise ethanol" or "(b) ... a solvent-like material selected from ... heptane, hexane, isopropyl alcohol, and methanol."
• The complaint reserves the right to assert other claims (Compl. ¶40).

III. The Accused Instrumentality

Product Identification

• The complaint identifies the accused instrumentality as the "Accused Method," which is a process for extracting cannabinoids from hemp or cannabis plant substrate using the "ExtractionTek (formerly Delta Separations) Cup 30 Ethanol Extraction System" (Compl. ¶¶21-22).

Functionality and Market Context

• The complaint alleges the Accused Method performs a series of steps that correspond to the patented process. This includes: lowering the temperature of an ethanol-based solvent to a range of -30°C to -50°C; contacting the cooled solvent with plant material; using atmospheric evaporation via equipment like a rotary or falling film evaporator to reduce the extract; recovering the solvent for re-use; and purging the final extract under vacuum to remove residual solvent, lipids, and chlorophyll (Compl. ¶¶25-30). On "information and belief," the complaint alleges the solvent used is a mixture of 95% ethanol and 5% of a non-ethanol solvent (Compl. ¶31). Defendants are alleged to use this process to create products sold throughout the United States (Compl. ¶4). No probative visual evidence provided in complaint.

IV. Analysis of Infringement Allegations

'407 Patent Infringement Allegations

'248 Patent Infringement Allegations

Identified Points of Contention

• Scope Questions: The term "substantially free of any lipids and chlorophyll" is not quantitatively defined in the claims. The complaint alleges this standard is met (Compl. ¶30), but a dispute may arise over the level of purity required to satisfy this limitation.
• Technical Questions: The complaint alleges the "atmospheric evaporation" step is performed by a rotary evaporator (Compl. ¶28). Since rotary evaporators are often operated under vacuum to lower a solvent's boiling point, a factual question arises as to whether the accused process truly performs this step at atmospheric pressure, or if its operation falls outside the claim's scope.
• Evidentiary Questions: The allegation that Defendants use a 95%/5% solvent blend, which is critical for infringing the asserted optional limitation of the '248 Patent, is made "on information and belief" (Compl. ¶31). The factual basis for this allegation will be a primary focus of discovery.

V. Key Claim Terms for Construction

The Term: "substantially free of any lipids and chlorophyll"

• Context and Importance: This term, present in the independent claim of both patents, defines the required purity of the final extract. Its construction is critical, as infringement hinges on whether the accused process achieves this qualitative standard. Practitioners may focus on this term because its inherent ambiguity makes it a likely subject of dispute.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The specification describes the invention as a process that "yields a clean cannabinoid/terpene extract devoid of plant lipids and chlorophyll" ('407 Patent, col. 2:60-62), language that may support a more qualitative, non-numeric standard of purity.
  • Evidence for a Narrower Interpretation: The abstract of the '407 Patent states that embodiments can provide an extract "with a concentration of chlorophyll that is below 1%." A party could argue this provides a specific, quantitative benchmark that defines the scope of "substantially free."

The Term: "atmospheric evaporation"

• Context and Importance: This term defines a specific process step in claim 1 of both patents. Its construction will be central to the infringement analysis, as the complaint accuses equipment (rotary evaporators) that can operate under vacuum, potentially creating a conflict with the "atmospheric" requirement.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The patent specification offers little explicit definition beyond the term itself, simply listing it as a process step ('407 Patent, col. 2:19-20). A party might argue the term should be interpreted broadly to mean evaporation that is not pressure-assisted, or that the accused equipment can be operated in a mode that satisfies this limitation.
  • Evidence for a Narrower Interpretation: The plain and ordinary meaning suggests the evaporation must occur at ambient atmospheric pressure (e.g., ~760 Torr). A party will likely argue that operation under a partial vacuum, a common use for rotary evaporators to expedite solvent removal, does not meet this limitation.

VI. Other Allegations

Willful Infringement

• The complaint alleges that Defendants' infringement has been willful "since at least the date of the filing of this complaint" (Compl. ¶¶37, 43). This is a standard allegation of post-suit willfulness based on the notice provided by the lawsuit itself; no facts are alleged to support pre-suit knowledge or willfulness.

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

• A core issue will be one of definitional scope: can the qualitative term "substantially free of any lipids and chlorophyll" be construed to a specific, quantifiable standard, such as the "below 1% chlorophyll" concentration mentioned in the '407 patent's abstract, and does the accused process meet that standard?
• A central technical question will be one of functional operation: does Defendants' use of a rotary evaporator for solvent reduction constitute "atmospheric evaporation" as required by the claims, or does its operation under vacuum create a dispositive mismatch with the claim language?
• A key evidentiary question will be one of compositional proof: what evidence will Plaintiff be able to produce in discovery to substantiate its "information and belief" allegation that Defendants use a 95%/5% ethanol-based solvent blend, a fact necessary to prove infringement of the asserted optional limitation of the '248 patent?