DCT

2:26-cv-10111

Natural Extraction Systems LLC v. Stiiizy Inc

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Key Events
Complaint

I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 2:26-cv-10111, E.D. Mich., 01/12/2026
  • Venue Allegations: Plaintiff alleges venue is proper in the Eastern District of Michigan because Defendants Focus Group Enterprises and Ferndale Maize maintain physical, regular, and established places of business in the District and allegedly committed acts of direct infringement there. Venue over Stiiizy Inc. and Stiiizy IP LLC is alleged based on their control over these Michigan-based subsidiaries and alter egos.
  • Core Dispute: Plaintiff alleges that Defendants’ processes for producing cannabis distillates, and the resulting consumer products, infringe four patents related to methods for chemically modifying cannabinoids through gas-phase decarboxylation and distillation.
  • Technical Context: The patents relate to cannabis extraction technology, specifically methods to convert non-psychoactive cannabinoid acids (e.g., THCA) into their active forms (e.g., THC) more efficiently and with fewer undesirable byproducts than traditional heating methods.
  • Key Procedural History: The complaint notes that all four asserted patents claim priority to a single U.S. provisional patent application filed in 2018, suggesting a unified inventive concept underlies the portfolio.

Case Timeline

Date Event
2018-08-10 Priority Date for all Asserted Patents ('235 Provisional Application)
2020-06-02 U.S. Patent No. 10,669,248 Issues
2023-05-09 U.S. Patent No. 11,643,402 Issues
2025-05-13 U.S. Patent No. 12,297,181 Issues
2025-09-23 U.S. Patent No. 12,420,214 Issues
2026-01-12 Complaint Filed

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 cannabinoid carboxylic acids (e.g., converting non-psychoactive THCA into psychoactive THC) involve prolonged heating. This process is inefficient and generates undesirable side products, such as cannabinol (CBN), while also degrading other valuable compounds like terpenes (’248 Patent, col. 1:15-48).
  • The Patented Solution: The invention proposes a method to rapidly decarboxylate cannabinoids by performing the reaction in the gas phase. This involves vaporizing the cannabinoid acid and then immediately contacting the vapor with a heat sink to condense the desired decarboxylated product ('248 Patent, col. 2:20-24). The specification suggests this process lowers the reaction's activation energy and minimizes the time the molecules are exposed to high temperatures, thereby reducing the formation of unwanted byproducts ('248 Patent, col. 5:5-11). The specification also details a potential self-catalyzed reaction mechanism that may occur in the gas phase ('248 Patent, Fig. 1; col. 2:31-34).
  • Technical Importance: This approach was designed to improve the efficiency, purity, and stoichiometric yield of cannabinoid decarboxylation compared to prior art methods that relied on bulk heating in a liquid or solid phase ('248 Patent, col. 6:1-4).

Key Claims at a Glance

  • The complaint asserts independent claims 1, 2, 8, and 12 (Compl. ¶307).
  • The essential elements of independent claim 1 include:
    • Providing a composition containing a "native cannabinoid molecule" with a carboxyl group in a liquid or solid phase.
    • Contacting the composition with sufficient energy to convert the native molecule into a carbon dioxide molecule and a "modified cannabinoid molecule" in a gas phase.
    • Contacting the gas-phase molecule with a heat sink to condense it into a liquid distillate, achieving at least 95% conversion of the native molecule per mole.
    • Collecting the liquid distillate.
  • Independent claim 2 adds a limitation requiring the final distillate to have a molar ratio of the condensed molecule to cannabinol greater than 100:1. Independent claims 8 and 12 add limitations related to the composition's surface-area-to-volume ratio.

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

  • Issued: May 9, 2023

The Invention Explained

  • Problem Addressed: Like its parent '248 patent, the ’402 Patent addresses the problem of undesirable chemical modifications that result from traditional, prolonged heating methods used to decarboxylate cannabinoids ('402 Patent, col. 1:21-25).
  • The Patented Solution: This invention refines the gas-phase decarboxylation concept by focusing on a key parameter: the surface-area-to-volume ratio of the starting composition. The claims require providing a composition with a ratio "greater than 1000 per meter" before applying energy to induce the gas-phase conversion ('402 Patent, col. 2:30-43; col. 11:29-32). This high ratio is intended to facilitate rapid and efficient energy transfer, promoting the desired gas-phase reaction over degradation pathways ('402 Patent, col. 2:31-33).
  • Technical Importance: The invention identifies a specific, quantifiable parameter (surface-area-to-volume ratio) as a critical factor for optimizing the speed and purity of the gas-phase decarboxylation process.

Key Claims at a Glance

  • The complaint asserts independent claim 1 and dependent claims 8, 14, 15, and 18 (Compl. ¶323).
  • The essential elements of independent claim 1 include:
    • Providing a composition comprising cannabinoids with a surface-area-to-volume ratio greater than 1000 per meter, where the cannabinoids include a native molecule with a carboxyl group.
    • Contacting the composition with sufficient energy to convert the native molecule into a carbon dioxide molecule and a modified cannabinoid molecule in a gas phase.
    • Contacting the modified molecule with a heat sink to condense it into a liquid distillate.
    • Collecting the liquid distillate.
  • The complaint explicitly reserves the right to assert additional claims.

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

  • Issued: May 13, 2025
  • Technology Synopsis: This patent claims methods for chemically modifying cannabinoids extracted from Cannabis plant material. The claims recite specific process parameters, such as coating a heated surface of a "thin-film evaporator" and achieving specific outcomes in the final distillate, including molar ratios of the desired product relative to byproducts like cannabinol and delta-8-tetrahydrocannabinol (’181 Patent, Claims 1, 2, 9).
  • Asserted Claims: Claims 1-4, 9, 19, and 21 (Compl. ¶339).
  • Accused Features: The complaint alleges that Defendants' use of "wiped-film distillation" systems constitutes infringement, identifying these systems as a type of "thin-film evaporator" as recited in the claims (Compl. ¶275).

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

  • Issued: September 23, 2025
  • Technology Synopsis: This patent claims methods for producing a final product comprising a cannabinoid. The claims detail specific properties of the starting composition (e.g., less than 15% water, comprises an oil, at least 1% THCA) and include steps related to the final product's use, such as filling a vaporizer cartridge with the collected distillate (’214 Patent, Claims 1, 4, 18). The method also specifies parameters like using a vacuum and condensing the product within 360 seconds.
  • Asserted Claims: Claims 1, 2, 4-6, 8, 11, and 18-20 (Compl. ¶355).
  • Accused Features: The complaint alleges infringement through Defendants' use of wiped-film and short-path distillation systems to produce distillate and their subsequent use of that distillate to fill vaporizer cartridges for sale (Compl. ¶290, ¶304).

III. The Accused Instrumentality

Product Identification

  • The accused instrumentalities are the processes Defendants allegedly use to manufacture cannabis distillates, primarily identified as "wiped-film distillation" (Compl. ¶206, ¶222). Also accused are the downstream products made from this allegedly infringing process, including Stiiizy-branded THC vape pens, pods, and gummies (Compl. ¶18, ¶188).

Functionality and Market Context

  • The complaint alleges that Defendants utilize wiped-film distillation systems, which operate by spreading a cannabis extract into a thin film across a heated cylindrical surface (Compl. ¶223-¶225). This action allegedly heats the extract, causing the native cannabinoid acids (e.g., THCA) to simultaneously evaporate and decarboxylate into their modified, active forms (e.g., THC) in a gas phase (Compl. ¶213, ¶215). This gas is then allegedly cooled by a condenser and collected as a purified liquid distillate, which forms the base for Defendants' consumer products (Compl. ¶216, ¶218, ¶194).
  • The complaint positions Defendants as a major U.S. cannabis operator, generating "hundreds of millions of dollars in annual revenue" from products that incorporate the accused cannabis distillate (Compl. ¶11, ¶13, ¶19). No probative visual evidence provided in complaint.

IV. Analysis of Infringement Allegations

'248 Patent 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, the native cannabinoid molecule comprises a carboxyl group, and the native cannabinoid molecule is in a liquid phase or a solid phase; Defendants provide extracted liquid cannabis oil containing native cannabinoid molecules with carboxyl groups, such as THCA and CBDA. ¶178, ¶208, ¶211 col. 1:15-19
contacting the composition with sufficient energy to convert the native cannabinoid molecule into (i) a carbon dioxide molecule and (ii) a modified cannabinoid molecule in a gas phase; Defendants' wiped-film distillation systems heat the cannabis extract, causing the native cannabinoid THCA to convert into modified cannabinoid THC in a gas phase (vapor). ¶213, ¶215 col. 2:21-24
contacting the modified cannabinoid molecule with a heat sink to condense the modified cannabinoid molecule into a condensed cannabinoid molecule in a liquid distillate, in which at least 95% of the native cannabinoid molecule is converted... per mole; Defendants' distillation systems use condensers (heat sinks) to condense the gas-phase THC into a liquid distillate. The complaint alleges that final products show no detected THCA, indicating a conversion rate of at least 95%. ¶216-¶217, ¶220 col. 2:23-24
and collecting the liquid distillate. Defendants collect the resulting distillate to manufacture and fill consumer products like vape pods. ¶218 col. 2:24

'402 Patent 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... Defendants' wiped-film distillation systems spread the liquid cannabis extract into a thin film with a thickness of 100 to 500 microns, which Plaintiff alleges results in a surface-area-to-volume ratio greater than 1000 per meter. ¶225, ¶227, ¶239 col. 11:29-32
contacting the composition with sufficient energy to convert the native cannabinoid molecule into (i) a carbon dioxide molecule and (ii) a modified cannabinoid molecule in a gas phase; The systems heat the thin film of extract, converting the native cannabinoid molecules into modified molecules in a gas phase. ¶213, ¶240, ¶242 col. 11:36-39
contacting the modified cannabinoid molecule with a heat sink to condense... into a condensed cannabinoid molecule in a liquid distillate; and The systems use a condenser to turn the gas-phase modified cannabinoid back into a liquid distillate. ¶216-¶217, ¶257 col. 11:40-43
collecting the liquid distillate. Defendants collect the final liquid distillate for use in their products. ¶218 col. 11:44

Identified Points of Contention

  • Scope Questions: The infringement theory for the '402 patent rests on a calculation that a 100-500 micron film achieves a surface-area-to-volume ratio greater than 1000/m (Compl. ¶239). The litigation may raise the question of whether this calculation is technically accurate and how the term "surface-area-to-volume ratio" should be defined and measured in the context of a dynamic wiped-film process.
  • Technical Questions: A key factual question will be whether Plaintiff can demonstrate that Defendants' accused processes actually achieve the "at least 95%" conversion rate required by Claim 1 of the '248 patent. This element may depend on evidence regarding process controls and quality testing obtained during discovery.

V. Key Claim Terms for Construction

The Term: "contacting the composition with sufficient energy to convert" ('248 Patent, Claim 1)

  • Context and Importance: This term defines the core chemical transformation step of the claimed method. Its construction is critical because it will determine whether the claim is limited to a specific reaction mechanism or broadly covers any heating process that achieves the claimed result. Practitioners may focus on this term because the '248 patent specification contains a detailed discussion of a specific, self-catalyzed, gas-phase reaction mechanism ('248 Patent, col. 2:31–col. 4:44), which Defendants could argue limits the scope of this otherwise functional language.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The claim language itself is functional, reciting what the energy must do ("convert the native cannabinoid molecule") rather than how it must be applied or what mechanism it must trigger. This may support an interpretation that covers any form of energy application (e.g., conductive heating in a wiped-film system) that results in the gas-phase conversion.
    • Evidence for a Narrower Interpretation: The specification's description of lowering the "activation energy... by performing the decarboxylation reaction in the gas phase" ('248 Patent, col. 5:7-11) and its extensive modeling of a specific cyclic reaction mechanism ('248 Patent, Fig. 1-2) could be cited to argue that "sufficient energy to convert" requires conditions that facilitate this specific, more efficient gas-phase reaction, rather than simply brute-force heating until vaporization and conversion occur.

The Term: "surface-area-to-volume ratio" ('402 Patent, Claim 1)

  • Context and Importance: This term is the central quantitative limitation of the '402 patent's independent claim. The infringement analysis directly depends on whether the accused wiped-film process creates a composition with a ratio "greater than 1000 per meter." How this ratio is defined, calculated, and measured for a liquid film in a dynamic process will be a dispositive issue.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The patent does not appear to provide a special definition for the term, which may support using its plain and ordinary meaning in the relevant field of chemical engineering. The claim applies the ratio to the "composition" itself, which could be interpreted as the bulk liquid before it is spread into a film.
    • Evidence for a Narrower Interpretation: The specification discusses this ratio in the context of creating a "thin film" ('402 patent, col. 2:39-40, which is part of the '248 patent prosecution history). A party could argue the term must be interpreted as the ratio of the film as it is being heated, not the bulk material. The complaint's own allegations appear to adopt this interpretation by calculating the ratio based on the alleged film thickness (Compl. ¶239).

VI. Other Allegations

Indirect Infringement

  • The complaint alleges that parent entities Stiiizy Inc. and Stiiizy IP induced infringement by their subsidiaries and licensees (e.g., Focus and Ferndale) (Compl. ¶313). The allegations assert that the parent entities actively and knowingly instructed their subsidiaries to perform the infringing processes, in part by establishing and enforcing "standard operating procedures" and controlling the nature and quality of the final branded products (Compl. ¶313, ¶319).

Willful Infringement

  • The complaint requests a finding of willful infringement and enhanced damages (Compl., p. 64, ¶(e)). The specific allegations of knowledge are based on knowledge "at least as of the filing date of this complaint," suggesting the willfulness theory is predicated on Defendants' continued infringement after being notified of the patents by the lawsuit (Compl. ¶311, ¶327, ¶343, ¶359).

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

  • A core issue will be one of process verification: can Plaintiff obtain sufficient evidence to prove that Defendants' internal manufacturing processes, specifically their use of wiped-film distillation, create the physical conditions required by the claims? This includes fact-intensive questions such as the precise thickness of the cannabis oil film, the resulting surface-area-to-volume ratio, and the chemical conversion efficiency achieved.
  • A key legal question will be one of claim scope: can the term "contacting... with sufficient energy," which is rooted in a specification that details a novel gas-phase reaction mechanism, be construed broadly enough to read on the functionally different process of conductive heating that occurs in a wiped-film distillation system?
  • A central question for establishing liability against the parent corporate entities will be one of corporate control: does the evidence show that Stiiizy Inc. and Stiiizy IP exercised sufficient direction and control over their Michigan-based subsidiaries to support a finding of induced infringement and establish venue in the district, or will the entities be treated as distinct for liability purposes?