folder Filed in Cultivation, Policy
PHYLOS FALLOUT: Open Cannabis Project to Shutter This Month
OCP legal advisor Dale Hunt talks about why he just resigned from representing Phylos.
Tom Hymes

On Monday, staff and board members of the Open Cannabis Project posted a statement to Medium announcing that the organization will “sunset” by the end of May. The news comes seven paragraphs deep into the statement following a lengthy recitation of events surrounding Phylos Bioscience’s own announcement on April 16 that it is entering commercial breeding. In the OCP statement, which reads as part denunciation, part explanation, and part mea culpa, the eight signatories—Beth Schechter, John Gilmore, Jesse Dodd, Angela Bacca, Dale Hunt, Nat Pennington, Rebecca Gasca, and Reggie Gaudino—lay out a narrative in which Phylos, which had “earned trust in the community through a narrative of standing against monocropping and promoting the protection of small farmers and breeders is now using their data as part of a plan that’s built to support big-ag models and ultimately become their competition.”

Evidence is presented in the form of the now infamous video of Phylos CEO Mowgli Holmes presenting at a Miami investors conference this February, where he, as the OCP statement puts it, “…shares the company’s overall investment strategy, which puts breeding at the center of it. According to Dr. Holmes, Phylos now considers itself a ‘legacy data company’ and the genetic sequencing and sex test services they provide growers and breeders only exist to support the breeding project. Some of the statements Dr. Holmes made dismiss the work of the very breeders who contributed to [Phylos’s] research and suggest that their breeding project will create ‘outrageous new strains’ to replace them. Dr. Holmes’s presentation to investors confirms many of the fears the community has had about Phylos’ intentions for years.”

However, the Phylos story also is inextricably intertwined with OCPs, which was started as a “project of Phylos to ‘protect’ heirloom varieties from overbroad patents as cannabis transitions into a legal market,” but which, the statement seems to suggest, may have had another intended purpose; namely, to allay concerns and fears about Phylos “through the work of the Open Cannabis Project. Our story has been a key part of shaping their public image as altruistic and science-loving protectors of the cultivation community,” the statement reads.

OCP became its own organization in late 2017, “with a new board and new leadership, built with the intent to carry out the same mission — to prevent people who did not invent new cannabis breeds (‘patent trolls’) from receiving monopoly-granting patents.” Since then, it has tried to carry on despite having trouble raising money and, perhaps more significantly, having to endure a constant stream of criticism that always seemed to have its roots in the group’s connection to Phylos. In the end, the perhaps inevitable decision was made that the tangled web could not be untangled.

“Through it all, and despite our best efforts,” the statement reads, “we’ve been called a fraud, a scam and a cover for some kind of secret plot. At first, we thought it was simply a technical misunderstanding of the subject matter. Now we know that there is truth to some of these fears. For those of us who were brought into OCP as it separated from Phylos, we came on board because we sincerely believe in protecting small growers and breeders during this crucial transition to a legal market. We also feel we have been deceived. As a result, no matter what we do as an organization going forward, Open Cannabis Project will never escape this deception.”

In acknowledging the role OCP played in “the actions of others,” the signatories say they are determined to “love our friends and still draw clear ethical boundaries. Now that we know what we know, we are doing our part to make it right.” Unfortunately, making right means sunsetting the organization “by the end of May 2019. The open data set will remain in the public domain, hosted at an organization such as the Internet Archive and of course on NCBI,” the statement reads. “We will do our best to share what we’ve learned with anyone who’s interested in taking this kind of work further.”

In addition to a final offering, a Legal and Advocacy Clinic for breeders and growers on licenses, patents, interstate commerce, and new FDA hemp regulations that is part of the Cultivation Classic, taking place next week in Portland, Oregon, the statement concludes with three issues that continue to face breeders and growers today.

  • The cannabis community still needs better documentation systems for legal, scientific, environmental and R&D reasons, as well as community-led frameworks to support it.
  • Growers and breeders still need legal resources to help them protect their work — and, really, legal resources in general.
  • There are still overbroad patents that could be countered, though they aren’t just on plants and likely require a new strategy.

People are encouraged communicate with OCP via info@opencannabisproject.org and by continuing to subscribe to its newsletter here.

Dale Hunt speaks about Phylos resignation

Dale Hunt, a botanist and patent attorney, is legal advisor to the Open Cannabis Project and a signatory to the statement issued Monday explaining why the organization feels compelled to dissolve itself by month’s end. Hunt reached out to Future Cannabis Project to explain why he also made the decision to resign from representing Phylos last Friday, a decision that came with a palpable sense of personal and professional responsibility that at times escalated to anguish. In the end, faced with certain unavoidable truths, Hunt’s decision to resign was easy even if getting there was, in the end, tortuous.

“I started as a botanist,” he said. “I got bachelor’s degree in botany, a Masters in genetics, and a PhD in molecular and cellular biology. Then I decided I didn’t want to be a professor, so I went to law school. I spent a whole lot of years doing patents in biotech, clean tech, and alternative energy, and I also worked with agriculture companies protecting all kinds of different plants on behalf of clients all around the world, and I never even dreamed about there being a legal cannabis industry.”

Sometime in 2014, Hunt was contacted out of the blue by Mowgli. “He said they were looking for an expert in plant intellectual property to be on the board of the Open Cannabis Project,” said Hunt.

“We’re trying to protect the public domain of cannabis as the legal industry get rolling,” he recalled Mowgli telling him. “We don’t want anybody to come in and claim copyright that really corresponds to what is in the public domain in cannabis, but we don’t really understand how the patent system is going to relate to the cannabis industry, so we’re looking for somebody who really understands the intellectual property system of plants. We looked far and wide and you seem to be the guy who is the expert in plant intellectual property both U.S. and foreign.”

Hunt was interested. “I had never thought about the cannabis industry, but it seemed like a good way to expand my interests,” he said. After getting permission t work in cannabis from the law firm where he is a partner, he agreed to take the position. “I was on the OCP board of directors for a while, but it was pretty unpopular. The industry, especially the old-school people, is untrusting of patents altogether and initially the OCP was perceived as kind of an inherently anti-patent organization. I guess it was kind of dissonant to have a patent attorney on the board of an anti-patent organization, so they quietly moved me off it and made me an advisor for OCP. I don’t even know when this happened, but I realized it had when I checked the OCP website and saw I wasn’t a board member anymore.”

Hunt didn’t mind not being on the board. He was excited to be part of OCP and was getting increasingly involved with the industry. “I was invited to speak at MJBizCon, so that was flattering,” he said. But there were some red flags that got his attention at the time and seem increasingly significant from his current perspective.  

“What was really interesting was that I would get these phone calls from Mowgli with really complicated intellectual property questions that seemed like they might be more relevant to his company than anything having to do with OCP,” he said. “As a board member, I was not acting as patent counsel to anybody, but the lines weren’t clear. In terms of the questions Mowgli was asking, I thought they might be relevant to what OCP was doing, but it does seem like maybe I was just giving free advice to the company. Mowgli made it clear he had a law firm in Portland that was his official patent counsel, but there were moments when I wondered if I was being used. But I was okay being used because I was excited to be on the periphery of the cannabis industry.”

Hunt was not retained as counsel to Phylos at this point, and said he was hoping to represent the company. “I told my firm there was a chance I could represent them, but I also understood that it was a startup. So, here I am doing all this cannabis work, going to meetings and conventions, giving talks, basically doing volunteer work that is not generating any billable work, and even though I didn’t have any knowledge about what Phylos was doing as a company, I was giving advice to Mowgli about plant intellectual property. I didn’t even participate in board meetings with the entire board while I was officially on the board. I figured it was a scheduling problem, but it was probably a good year or more—and a few months before Beth joined—before I started participating in OCP meetings and phone conferences as a legal advisor. “

Hunt added, “I was never counsel to Phylos when they were doing whatever they were doing with gathering data, which is why I’m free to talk about it now. If I had been, I couldn’t talk about it because I would have an ongoing duty of confidentiality. I did do a limited amount of patent work for them late in the game but had nothing to do with any of their plant breeding.”

Resigning

“I resigned from working for Phylos last Friday so that I wouldn’t have any duty of loyalty when the OCP statement went out,” said Hunt on Tuesday, a day after OCP issued its statement. He was still in a state of shock because of a profound realization that he had experienced only within the last few days and was still in the middle of processing. He talked about it as though reliving it.

“If you want to talk about betrayal or shock, here is what I would say,” said Hunt. “When Beth circulated a draft of the OCP board letter, I had heard about all the controversy swirling around, and, you know, I’ve known Mowgli for a few years now and I guess I trend to believe the best about people, and I always believed that he was a great guy as sincere as he comes across. I believed that the intentions for OCP were exactly as they were stated, and that Mowgli’s values were exactly as he had stated them to be.

“So, when I started to hear the controversy over Phylos, and even when I got personally blamed on Instagram about a week and a half ago, I really thought it was just bad messaging,” he added. “I hadn’t done any diligence. I hadn’t seen the investor video. I just thought it was bad messaging and bad PR.

“So, when Beth first circulated the OCP letter, my first thought was that I have a duty of loyalty as an attorney,” he continued. “I can’t sign anything this strongly worded, I don’t personally feel this sense of betrayal, and I’m not this angry. And here’s this link to this video I haven’t watched. I guess I should watch the video.”

“When I watched it, I was literally sickened,” he said. “I don’t exaggerate, and I don’t use the word ‘literal’ when I don’t mean it. I hear people talk about Monsanto like it’s Big Ag and an evil corporation, but Monsanto is what it is and doesn’t pretend to be anything else. But when I saw a different Mowgli from the person I had ever seen, when I heard him talk about the fact that Phylos was going to basically make obsolete every cultivar, every strain, of cannabis that had been submitted to the Galaxy, I was literally sickened to my stomach. He can backtrack that all he wants, but that’s what he said.”

Hunt paused. When his next words came, they caught hard in his throat. “I work with plant breeders. I’m an attorney that files plant patents on behalf of plant breeders. In the process I’ve gotten to know a few of them, and they are lovely people. The breeders I know have been doing this because it is a passion for them and because it’s their life. Some of them are commercially successful and know how to take what they’re good at and make good money, but some of them scrape by. I see how they live and I’m trying to help them successfully commercialize what they do. And I see this guy that I really admired tell investors that he’s going to wipe them out. It’s someone I don’t recognize.

“This is why I am still in shock, because I’m not a dumb guy. I’m a scientist and a lawyer, but I made the mistake of giving Mowgli the benefit of the doubt, and so it’s clear that as of Thursday night I hadn’t done my diligence and had just assumed the best about the people involved. I assumed there was no way it could be this sinister until I watched that video for myself, and it remains with me…I remain in shock, because here’s where I’m still stuck. I wonder if [Phylos] was this duplicitous right from the start. From the day I met Mowgli, was this the business plan all along and I didn’t notice and nobody noticed, or was the business model of building the Galaxy and testing things with it so unprofitable that they had to switch over to breeding with the DNA information, and then had to backfill the story for the investors and make it sound like they had this plan all along? Where is the duplicity? Was it baked into the cake or did it come along later when it became necessary to attract investors? It’s certainly there now but was it there all along? That’s the question I’m left with, and it just leaves me so disappointed. I’m glad I finally did my diligence and that’s why I resigned from representing them on Friday.”

To Patent or Not to Patent

Going forward, Hunt—who also founded resource sites plantlaw.com and mjpatentsweekly.com, which tracks both published applications and issued patents for cannabis-related products and services—says he is determined to not only continue helping small-scale breeders and growers, but to dispel what he believes is a consequential misconception perpetrated on the cannabis cultivator community.

“What’s crazy about all of this is that someone convinced the cannabis community that they would get some type of protection from sharing this DNA information, and what they got was increased vulnerability,” he said. “Then they got the idea that patents are bad but sharing their DNA information is good, when it’s exactly the opposite.

“Breeders can protect their strains and cultivars from patent trolls with a plant patent or a utility patent that’s strain by strain,” he added. “You wouldn’t do that for hundreds of strains. If you’re a breeder, you do it for the ones that are worth protecting, that are going to have commercial value for years. Those that are going to have commercial value for only a season or two are not worth the cost.”

Hunt also is emphatic that DNA is unnecessary to file a plant patent, and questions the underlying reasons why most breeders feel they need to sequence their cultivars, but that doesn’t mean he doesn’t think someone should sequence if they have the money. Additional value can be derived even if it isn’t necessary to file a patent. In fact, the day of our interview he published a blog post entitled, “NONE: That’s How Much DNA Sequence You Need to Submit A Plant Patent Application.” In it, he includes a lot of helpful information for anyone considering IP protection for their plants, including a ballpark list of budgets for various circumstance, from defensive to offensive. Considering the level of protection patents afford, the options to file a plant patent through an attorney for less than $10,000 is anything but prohibitive. Having the option to self-file for under $5000 is even better for many people. To help facilitate that, Hunt says that he will “soon be posting forms enabling you to self-file a Cannabis provisional patent application and providing instructions for self-filing a plant patent.”

He believes measures such as these are necessary if the breeders he cares about most want to survive and thrive. “I have this view of a cannabis industry in the future that has room for the breeders that big cannabis might think it’s going to wipe out,” he said. “Which is why, even though that investor video was sickening, I still look forward to working with these great breeders that I love working with. I think the cannabis industry has different segments that are going to segment, and that Big Cannabis is going to be one thing and magical breeders are going to be another thing.

“Big Cannabis is going to be about a crop that is produced in mass as a factory to make a molecule,” he explained. “Whether that molecule is THC, CBD, or something else, it’s going to be like corn, wheat, or soy, just like Mowgli said. And sure, they can produce that in giant acreages and try to squeeze it down to be one-percent more efficient, less disease resistant, and use less water, and if that floats your boat, knock yourself out, do all your fancy marker-assisted breeding and take all the beauty and creativity out of it.

“But there have been breeders who have been surviving in the hills for generations, hiding from the feds and scraping out a living. These men and women who have survived all kinds of things have a passion and a talent, a gift that is truly magical, and they’re going to survive this, too.”

Angela Bacca Beth Schechter Dale Hunt Jesse Dodd John Gilmore Nat Pennington Phylos Bioscience Rebecca Gasca Reggie Gaudino