Trademark law in the U.S. protects “any word, name, symbol, or design, or any combination thereof, used in commerce” to identify one company’s goods or services from another, and to indicate the source of the goods or services. Protection is available for trademarks used in commerce (called “common law” rights) and heightened protections are available for marks that are used in commerce and registered.
Unfortunately, federal protection does not extend to cannabis products, paraphernalia, or equipment intended for use in ingesting cannabis. Because the “use in commerce” of the cannabis plant and such related products is illegal under the Controlled Substances Act (CSA), the marks are ineligible.
This roadblock creates significant challenges for businesses in the cannabis industry who seek to protect the goodwill they have established in their brands and to prevent others from using identical or confusingly similar marks on identical or related products.
Brand owners in the cannabis industry were hopeful that the 2018 Farm Bill, signed into law on Dec. 20, 2018, would change this dynamic. The 2018 Farm Bill removed “hemp” from the definition of marijuana, meaning that cannabis plants and derivatives such as cannabidiol (CBD) derived from hemp that contain no more than 0.3% THC (tetrahydrocannabinol) on a dry-weight basis are no longer controlled substances under the CSA.
This change allowed companies selling CBD products in states with legalized medicinal and/or recreational cannabis regimes to expand sales of CBD products significantly, including across state lines into states that have not regulated cannabis.
After passage of the 2018 Farm Bill, many cannabis companies filed U.S. trademark applications for a variety of CBD products, including edibles, beverages, topicals, and smoking/vaping devices.
The May 2019 release of an Examination Guide by the U.S. Patent and Trademark Office (USPTO) did not provide the hoped-for federal trademark protection for CBD products. The guide provides only very limited relief from the bar against federal trademark registration for companies selling CBD products. The guide confirmed that ingestible products containing CBD remain illegal and ineligible for federal trademark registration under the Food, Drug and Cosmetic Act (FDCA), which prohibits the use, in foods or dietary supplements, of a drug or substance undergoing clinical investigations without approval of the FDA. This means that the only CBD products eligible for federal trademark registration are topicals or other non-ingestible products. The most popular types of CBD products (edibles, beverages, and tinctures) are still excluded.
The path to establishing “common law” rights by using a trademark on cannabis/CBD products in commerce without registration is likely blocked as well, because this protection derives from the same federal statute.
Securing trademark rights in the cannabis industry is frustrating. Nevertheless, cannabis companies should maintain frequent, obvious, and consistent use of their trademarks to create the strongest position possible for establishing and protecting their brands. This means choosing and using unique brands; using trademarks consistently in marketing and packaging; designating words, images, and slogans as trademarks by using the “TM” symbol; and taking advantage of state-level protections.
Some states may recognize common law trademark infringement claims, and state-level registration provides protection and a potential state-law infringement claim within that state. For a company selling THC products, a registration list may include states in which recreational (11 states + D.C.) and/or medical (33 states + D.C.) production and sale of cannabis have been regulated, and in which a company can comply with that state’s regulations regarding operation and sale.
A company selling CBD products derived from hemp under the 2018 Farm Bill has access to an even longer list of states. A state-by-state filing plan may seem onerous when compared to the convenient federal registration, but it’s an option.
Other available brand protection strategies are:
- Pursuing federal trademark registration for non-primary products such as merchandise, if the mark is used as a brand/source-identifier and not as an ornamental or decorative element.
- Filing patent applications for novel processes, machines, or other patent-eligible inventions.
- Pursuing copyright registration for labels and/or sufficiently creative/original logos or packaging.
- Monitoring the market for use of identical or confusingly similar brands by third parties and taking action when and if possible.
Until there is some significant movement at the federal level, whether by the FDA or toward de-criminalization, brand protection for cannabis companies will remain challenging, but not impossible. In the crowded market, cannabis companies should do all they can to protect their valuable brands, and must be creative and diligent in accomplishing that protection.
Contact Parna, to learn more about actions you can take to protect the value of your cannabis brand, or one of our Cannabis Industry Group attorneys, who bring deep business expertise and relevant cannabis/hemp industry experience, to advise owners and operators on forming and sustaining successful businesses in the cannabis and hemp industries.