On May 2, 2019 the United States Patent and Trademark Office (USPTO) issued new guidance regarding cannabis-related trademark applications following the 2018 Farm Bill. Although it’s not the best news for cannabis businesses, it’s not the worst news either, and it adds some welcome clarity to an otherwise muddy, inconsistent area of trademark practice before the USPTO.
The USPTO will continue its standing policy of refusing to register marks for cannabis-related goods and/or services that violate federal law (…although I still contend that this policy is wrong-headed, inconsistent with the USPTO granting cannabis patents, and contrary to the purposes and plain language of the Lanham Trademark Act which provides for registration of marks used in commerce, defined as “all commerce which may lawfully be regulated by Congress” i.e. all commerce that can be regulated and/or prohibited under Congress’ lawful powers, not merely commerce that is deemed lawful — but that’s a tirade for a different blog post or perhaps an appeal to the United States Court of Appeals for the Federal Circuit…).
Pursuant to the new guidance, the USPTO will continue evaluating whether goods or services identified in trademark applications are lawful under federal law including the Controlled Substances Act, 21 U.S.C. §§801 et seq. (CSA) in addition to the Federal Food Drug and Cosmetic Act, 21 U.S.C. §§301 et seq. (FDCA), and the Agriculture Improvement Act of 2018, Pub. L. 115-334 (the 2018 Farm Bill). This much remains the same, so applicants can still expect to be denied trademark registrations for goods or services that are obviously unlawful (*cough* through Congress’ lawful regulating *cough*) under those statutes.
The new guidance now explicitly recognizes the status of hemp under the 2018 Farm Bill. The 2018 Farm Bill removed “hemp” from the CSA, where hemp is defined as “the plant Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids [like CBD], 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.” As a result, cannabis and derivatives such as CBD, from hemp plants that contain no more than 0.3% delta-9 THC on a dry-weight basis are no longer controlled substances and therefore cannot be refused trademark registration on the basis of violating the CSA.
However, even if hemp-derived goods are legal under the CSA, not all CBD or hemp-derived products are lawful under the 2018 Farm Bill. The use in foods or dietary supplements of a substance undergoing clinical investigations without approval of the U.S. Food and Drug Administration (FDA) violates the FDCA. The 2018 Farm Bill explicitly preserved FDA’s authority to regulate products containing cannabis or cannabis-derived compounds under the FDCA. CBD is an active ingredient in FDA-approved drugs and is a substance undergoing clinical investigations. So the USPTO will be skeptical and likely deny applications for foods and dietary supplements touting CBD as an ingredient.
For applications involving “hemp,” the guidance reminds everyone that the USPTO examining attorney has authority to issue inquiries concerning the applicant’s commerce, and will specifically require information about the applicant’s authorization to produce hemp. Applicants will be required to provide additional statements for the record to confirm that their activities meet the requirements of the 2018 Farm Bill. Notably, the trademark office doesn’t issue inquiries about complex regulatory compliance in other highly regulated industries. The USPTO doesn’t ask whether SHELL or MARLBORO, for example, comply with all applicable laws and regulations when they apply for trademarks.
Furthermore, the CSA still makes marijuana illegal, including “all parts of the plant Cannabis sativa L., whether growing or not; the seeds thereof; the resin extracted from any part of such plant; and every compound, manufacture, salt, derivative, mixture, or preparation of such plant, its seeds or resin.” So, under this guidance we can expect the USPTO to refuse registration when an application identifies goods encompassing CBD or other extracts that originate from marijuana (rather than hemp) because such goods remain unlawful under the CSA.
Despite the USPTO’s never-ending efforts to foster consistency among USPTO examiners, practicing trademark lawyers commonly complain about how different USPTO examiners review applications with different levels of scrutiny and care. I like to cut the examiners some slack because they have enormous caseloads and their job is to be an expert on trademark law, not criminal law, FDA regulations, or agriculture. But given the complicated, evolving status of cannabis’ legality, cannabis-related trademark applications have received particularly inconsistent treatment depending upon the USPTO examiners assigned to them. Some cannabis-related applications would be rejected (for identifying unlawful “drug paraphernalia” for example) while others would not. Because of that inconsistency, many astute cannabis businesses have successfully followed a “spaghetti strategy” tossing applications at the wall to see what sticks.
What’s new and helpful with the May 2nd guidance is the USPTO’s specific guidance about the lawfulness of cannabis, its byproducts, and related goods or services with an emphasis on clarifying the legal status of hemp and CBD. This will help overworked USPTO examiners understand current cannabis laws so they can more consistently determine the lawfulness of goods or services listed in cannabis-related applications.
Options for cannabis businesses seeking brand protection at the federal level remain limited and complex. And I expect that inconsistent results will continue, especially for goods or services that make more creative uses of cannabis and cannabinoids. But at least the trademark office has taken a closer look at these issues and examiners should be granting more registrations more easily for lawful cannabis-related trademark applications.