Following on the heels of the passage of the Agricultural Improvement Act of 2018 (the Farm Bill) in December 2018, the U.S. Patent and Trademark Office (“USPTO”) recently announced that it would begin considering federal trademark protection for goods and services that encompass cannabis or cannabidiol (CBD) derived from hemp.
In a recently issued “Examination Guide” – which is issued to clarify standards of application review by the USPTO’s examining attorneys and to assist practitioners when new issues relating to trademark prosecution arise that are not necessarily yet covered in the periodically updated “Trademark Manual of Examining Procedure” – the USPTO stated: “For applications filed on or after December 20, 2018 that identify goods encompassing cannabis or CBD, the 2018 Farm Bill potentially removed [the U.S. Controlled Substance Act (the CSA)] as a ground for refusal of registration, but only if the goods are derived from ‘hemp.’”
Additionally, the USPTO announced that applicants who previously submitted trademark applications and/or had their applications rejected based on the legal status of CBD prior to December 20, 2018 will be able to refile or amend their applications.
Under 15 U.S.C. § 1052, trademarks and service marks must involve “lawful use in commerce” to be eligible for federal registration. As explained in the just-issued Examination Guide 1-19 “Examination of Marks for Cannabis and Cannabis-Related Goods and Services after Enactment of the 2018 Farm Bill” (dated May 2, 2019), the USPTO “refuses to register marks for goods and/or services that show a clear violation of federal law, regardless of the legality of the activities under state law.”
The CSA makes it unlawful for, among other conduct, “any person knowingly or intentionally … to manufacture, distribute, or dispense, or possess with intent to manufacture, distribute, or dispense, a controlled substance.” “The term ‘controlled substance’ means a drug or other substance, or immediate precursor, included in schedule I, II, III, IV, or V” of the CSA. Marijuana is a schedule I drug. As such, it is difficult, if not impossible, to register a marijuana-related trademark.
The 2018 Farm Bill amended federal law and, as explained in Examination Guide 1-19, “change[d] certain federal authorities relating to the production and marketing of ‘hemp,’ defined as ‘the plant Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta-9 tetrahydrocannabinol [THC] concentration of not more than 0.3 percent on a dry weight basis.’” Most notably, as the Examination Guide also explained, the Farm Bill “remov[ed] ‘hemp’ from the CSA’s definition of marijuana, which means that cannabis plants and derivatives such as CBD that contain no more than 0.3 percent THC on a dry-weight basis are no longer controlled substances under the CSA.”
As such, hemp-derived CBD products and services are now eligible for trademark protection. And, as the USPTO explained, it issued Examination Guide 1-19 “to clarify the procedure for examining marks for cannabis and cannabis-derived goods and for services involving cannabis and cannabis protection following the 2018 Farm Bill.”
Trademark protection for CBD goods and services
The USPTO has now made clear:
For applications filed on or after December 20, 2018 that identify goods encompassing cannabis or CBD, the 2018 Farm Bill potentially removes the CSA as a ground for refusal of registration, but only if the goods are derived from “hemp.” Cannabis and CBD derived from marijuana (i.e., Cannabis sativa L. with more than 0.3 percent THC on a dry-weight basis) still violate federal law, and applications encompassing such goods will be refused registration regardless of the filing date. If an applicant’s goods are derived from “hemp” as defined in the 2018 Farm Bill, the identification of goods must specify that they contain less than 0.3 percent THC. Thus, the scope of the resulting registration will be limited to goods compliant with federal law.
The USPTO, though, also has reiterated that all trademark applications identifying goods containing “CBD or other cannabis products” filed before December 20, 2018 “will be refused due to the unlawful use or lack of bona fide intent to use in lawful commerce under the CSA.” In other words, CBD products were illegal at the time the application was filed and, therefore, registration will not be approved. However, the USPTO will allow an applicant to amend such an application to change its filing date to December 20, 2018, i.e., the date the 2018 Farm Bill was enacted. Per the recently issued Examination Guide, for an applicant who chooses to amend the filing date, the following will also be required:
- Amend the application to “specifically state” that such an amendment is “authorized” and meets the standard requirements for filing a trademark.
- “[A]mend the identification of the goods or services to specify that the CBD or cannabis products contain less than 0.3 percent THC.”
- After amending the application, “the examining attorney will conduct a new search of the USPTO records for conflicting applications based on the later application filing date.”
Alternatively, an applicant can (i) abandon the previous application and file a new one, or (ii) “respond to the stated refusal by submitting evidence and arguments against the refusal.”
The new Examination Guide also relates to service marks that “encompass activities prohibited under the CSA,” the practical effect being that marks relating to activities such as the cultivation, production, and sale of third-party CBD products, as well as similar services, will be reviewed under the same scrutiny as trademark applications for CBD goods and, in turn, be afforded the same remedies for refiling or amending filing dates.
CBD still faces other legal hurdles
Although the availability of federal trademark protection provides an important path forward for CBD goods and services, there are still many hurdles to overcome before full federal acceptance. As the USPTO expressly pointed out in Examination Guide 1-19, and consistent with the long-established prohibition against affording registration for marks encompassing unlawful activities in general, many CBD products (e.g., foods, beverages, dietary supplements, and pet treats) still cannot be sold legally in the United States without approval by the U.S. Food and Drug Administration(the “FDA”). The Farm Bill provides the FDA with explicit authority to regulate such products, and the FDA has not yet allowed any such sales. However, regulations governing the sale of such products may not be far off as the FDA is scheduled to hold a public hearing on May 31, 2019 to hear from industry stakeholders regarding current regulations of CBD in food.