DCT

2:23-cv-00281

Capna IP Capital LLC v. ETZ Hayim Holdings SPC

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I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 2:23-cv-00281, W.D. Wash., 02/28/2023
  • Venue Allegations: Venue is alleged to be proper based on Defendant being a Washington corporation with a principal address and regular, established places of business within the Western District of Washington.
  • Core Dispute: Plaintiff alleges that Defendant’s cold ethanol extraction system for producing cannabis and hemp-derived products infringes patents related to methods for selectively extracting desired compounds while minimizing the co-extraction of chlorophyll.
  • Technical Context: The technology addresses a key challenge in the cannabis and hemp processing industry: producing high-purity cannabinoid and terpene extracts by using super-cooled solvents to avoid undesirable plant byproducts like lipids and chlorophyll.
  • Key Procedural History: The two patents-in-suit belong to the same family; U.S. Patent No. 10,814,248 is a continuation-in-part of the application that led to U.S. Patent No. 10,507,407. A Certificate of Correction was issued for the ’407 Patent in March 2023, clarifying a temperature range in claim 1, which may be relevant to claim construction.

Case Timeline

Date Event
2016-04-14 Earliest Priority Date for ’407 and ’248 Patents
2019-12-17 ’407 Patent Issued
2020-10-27 ’248 Patent Issued
2023-02-28 Complaint Filed

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 Dec. 17, 2019)

The Invention Explained

  • Problem Addressed: The patent background describes drawbacks of conventional cannabis extraction methods, including the volatility and impurity of hydrocarbon solvents and the high cost of supercritical CO2 systems. A specific problem is the co-extraction of undesired constituents like plant lipids and chlorophyll, which contaminates the final product (’407 Patent, col. 1:15-44).
  • The Patented Solution: The invention proposes a method using a super-cooled solvent, such as grain ethanol, to extract cannabinoids and terpenes from plant material. By operating at very low temperatures (e.g., -30°C to -50°C), the process is designed to prevent the undesired, less-soluble chlorophyll and lipids from being extracted along with the target compounds, resulting in a cleaner extract (’407 Patent, Abstract; col. 1:60-63). The process involves steps for pre-chilling the solvent and plant matter, contacting them for a specific time, and then separating and purging the resulting extract (’407 Patent, col. 8:13-27).
  • Technical Importance: The described method aims to provide a safer, more reliable, and cost-effective process for producing high-purity cannabis extracts using a food-grade solvent, making it suitable for commercial-scale production (’407 Patent, col. 1:60-65).

Key Claims at a Glance

  • The complaint asserts at least independent claim 1 (Compl. ¶18).
  • The essential elements of independent claim 1 are:
    • A pre-processing step lowering a solvent's temperature to a range of -30°C and -50°C.
    • Contacting the solvent with plant substrate at a temperature of -30°C to -50°C to create an emulsion.
    • Evaporating the emulsion.
    • Recovering the solvent from the emulsion.
    • Purging the resulting extract so it is "substantially free of any lipids and chlorophyll."
  • The complaint reserves the right to assert additional claims (Compl. ¶18).

U.S. Patent No. 10,814,248 - Methods to reduce chlorophyll co-extraction through extraction of select moieties essential oils and aromatic isolates (issued Oct. 27, 2020)

The Invention Explained

  • Problem Addressed: The ’248 Patent addresses the same technical problem as its parent ’407 Patent: the need for an efficient extraction method that avoids co-extracting undesirable plant compounds like chlorophyll and lipids with the target cannabinoids (’248 Patent, col. 1:30-49).
  • The Patented Solution: The method described is fundamentally similar to the ’407 Patent, relying on super-cooled extraction to achieve selective separation. However, the claims of the ’248 Patent are structured differently, notably by explicitly excluding the use of liquid carbon dioxide and providing a broader, optional definition for the solvent used in the process (’248 Patent, col. 24:1-24).
  • Technical Importance: This patent builds on the same technical premise as the ’407 Patent, aiming to refine and potentially broaden the scope of protection for low-temperature, solvent-based cannabis extraction techniques (’248 Patent, col. 2:7-12).

Key Claims at a Glance

  • The complaint asserts at least independent claim 1 (Compl. ¶25).
  • The essential elements of independent claim 1 are:
    • A process that excludes the use of liquid carbon dioxide.
    • A pre-processing step lowering a solvent's temperature to a range of -30°C to -50°C.
    • Contacting the solvent with plant substrate at -30°C to -50°C to create an emulsion.
    • Evaporating the emulsion.
    • Recovering the solvent from the emulsion.
    • Purging the resulting extract so it is "substantially free of any lipids and chlorophyll."
    • An optional clause where the solvent is either "95% ethanol and 5% of a solvent that is another solvent" or a material from the group of "heptane, hexane, isopropyl alcohol, and methanol."
  • The complaint reserves the right to assert additional claims (Compl. ¶25).

III. The Accused Instrumentality

Product Identification

The accused instrumentality is identified as "Lazarus's cold ethanol extraction system" and the resulting products (Compl. ¶16).

Functionality and Market Context

The complaint alleges that the accused instrumentality is an extraction process used by the Defendant to produce its commercial cannabis and hemp products (Compl. ¶¶16, 18). The complaint points to a blog post on Defendant's website as an example of the accused process but does not provide specific technical details about its operation, such as the exact temperatures or solvent compositions used (Compl. ¶16). The complaint alleges the resulting products are sold throughout the United States and the State of Washington (Compl. ¶21).

IV. Analysis of Infringement Allegations

The complaint alleges that the Defendant's "cold ethanol extraction system" directly infringes at least claim 1 of both the ’407 and ’248 patents (Compl. ¶¶18, 25). The complaint refers to claim charts in Exhibits C and D, which were not included with the public filing, that purportedly detail the infringement (Compl. ¶¶23, 30). In the absence of these exhibits, the infringement theory must be inferred from the claims and the general description of the accused instrumentality. No probative visual evidence provided in complaint.

  • Identified Points of Contention:
    • Factual Question: A primary point of contention will be establishing the specific operating parameters of the accused "cold ethanol extraction system." Discovery will likely focus on whether the process operates within the claimed temperature range of -30°C to -50°C, as required by both asserted claims.
    • Technical Question: The claims require a final product that is "substantially free of any lipids and chlorophyll." The parties may dispute what level of purity satisfies this qualitative limitation and what evidence is sufficient to prove it.
    • Scope Question (’407 Patent): The definition of "solvent" in claim 1 of the ’407 Patent will be a critical issue. The specification includes a statement that could be interpreted as defining the term as "100% grain ethanol," which may create a significant dispute over the claim's scope compared to the broader language of the ’248 Patent.
    • Scope Question (’248 Patent): The infringement analysis for the ’248 Patent will depend on the specific solvent used by the Defendant. The patent's broader, optional claim language covering 95% ethanol or other specified solvents suggests a potential alternative infringement theory if the accused process does not use 100% ethanol.

V. Key Claim Terms for Construction

  • The Term: "solvent" (as used in ’407 Patent, Claim 1)

    • Context and Importance: The definition of this term is critical for the ’407 Patent. If construed narrowly to mean only "100% grain ethanol," it would significantly limit the scope of claim 1. If given a broader meaning, it would cover a wider range of potential extraction processes. Practitioners may focus on this term because the specification contains an explicit and potentially limiting definition.
    • Intrinsic Evidence for Interpretation:
      • Evidence for a Broader Interpretation: Claim 1 itself uses the general term "solvent" without qualification, and the background section discusses a wide array of extraction solvents, which could support an argument for a plain and ordinary meaning not limited to ethanol (Compl. ¶18; ’407 Patent, col. 1:22-31).
      • Evidence for a Narrower Interpretation: The "Summary of the Invention" section states: "The term solvent as used herein should be understood to describe 100% grain ethanol" (’407 Patent, col. 2:4-5). This explicit statement provides strong intrinsic evidence for a narrow definition that equates "solvent" with 100% grain ethanol for all claims.

  • The Term: "substantially free of any lipids and chlorophyll" (as used in Claim 1 of both patents)

    • Context and Importance: This limitation defines the required purity of the end product and is a central element of the inventive process. The dispute will center on how "substantially free" is measured and what threshold must be met.
    • Intrinsic Evidence for Interpretation:
      • Evidence for a Broader Interpretation: The claims do not provide a numerical value, and the term "substantially" inherently suggests a degree of approximation rather than absolute purity. This may support a construction that requires a significant, but not necessarily total, removal of the specified impurities.
      • Evidence for a Narrower Interpretation: The Abstract of both patents states that the methods provide an extract "with a concentration of chlorophyll that is below 1%" (’407 Patent, Abstract; ’248 Patent, Abstract). A party could argue this provides a specific, objective benchmark for what the inventor considered "substantially free."

VI. Other Allegations

  • Indirect Infringement: The complaint's formal counts (Counts I and II) only allege direct infringement under 35 U.S.C. § 271(a) (Compl. ¶¶18, 25). The complaint does not plead specific facts to support claims of induced or contributory infringement.
  • Willful Infringement: Plaintiff alleges that Defendant "made no attempt to design around the claims" and "did not have a reasonable basis for believing that the claims of the ... Patent were invalid" (Compl. ¶¶19-20, 26-27). The prayer for relief seeks treble damages for willful infringement (Compl. ¶9(B)). These allegations are conclusory and appear to assert objective recklessness without pleading specific facts related to pre-suit knowledge of the patents.

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

  • A core issue will be one of claim construction: can the term "solvent" in the ’407 patent be defined by the plain language of the claim, or will it be narrowly construed as "100% grain ethanol" based on an explicit definition in the specification? The resolution of this question may determine the viability of the infringement claim for the ’407 patent.
  • A key evidentiary question will be one of factual proof: what are the actual, verifiable operating parameters—specifically the temperature range and solvent composition—of Defendant's accused extraction process? Plaintiff’s ability to prove these facts fall within the scope of the asserted claims will be dispositive.
  • The case also raises a question of litigation strategy: how does the assertion of two related patents with different claim scopes—one arguably narrow (’407) and one explicitly broader (’248)—affect the case? This dual-front assertion suggests a strategy to cover multiple potential factual scenarios that may emerge during discovery.