Hemp is “legal,” but what does it mean for U.S. trademarks?

Cannabis Jan 11, 2019 Nashville, TN

By: Justin McNaughton

In the last few years the U.S. Trademark Office has been amassing a collection of rejected and abandoned trademark applications listing Cannabidiol in the description of goods; hundreds of these dead applications are now strewn across the records of the U.S. Trademark Office. Until December 2018, the U.S. Trademark Office had been refusing Cannabis-derived products from registration because the DEA had proclaimed that most CBD products were illegal in interstate commerce.

On December 20, 2018 the President signed the Agriculture Improvement Act of 2018 (“Farm Bill”). By now, you’ve heard that the law is groundbreaking because it removes hemp (containing less than .3% THC) from the purview of the Controlled Substances Act. In essence, the DEA just left the room.

So what does that mean for U.S. trademarks?

As a starting point, a product or service must be legal in interstate commerce to be eligible to be registered by the U.S. Patent and Trademark Office. In fact, “the goods or services to which the mark is applied, and the mark itself, must comply with all applicable federal laws. . . . In order for an application to have a valid basis that could properly result in a registration, the use of the mark has to be lawful, i.e., the sale or shipment of the product under the mark has to comply with all applicable laws and regulations. If this test is not met, the use of the mark fails to create any rights that can be recognized by a Federal registration.” See 37 C.F.R. §2.69. (Internal citations omitted).

This brings us to the FDA. Not to be upstaged by the Farm Bill and the DEA’s departure, the FDA recently released its own guidance on the subject (it seems everyone has an opinion). In its opening salvo, the FDA states:

“Congress explicitly preserved the agency’s current authority to regulate products containing cannabis or cannabis-derived compounds under the Federal Food, Drug, and Cosmetic Act (FD&C Act) and section 351 of the Public Health Service Act. In doing so, Congress recognized the agency’s important public health role with respect to all the products it regulates. . . . In short, we treat products containing cannabis or cannabis-derived compounds as we do any other FDA-regulated products — meaning they’re subject to the same authorities and requirements as FDA-regulated products containing any other substance. This is true regardless of the source of the substance, including whether the substance is derived from a plant that is classified as hemp under the Agriculture Improvement Act.”

Additionally, it’s unlawful under the FD&C Act to introduce food containing added CBD or THC into interstate commerce, or to market CBD or THC products as, or in, dietary supplements, regardless of whether the substances are hemp-derived. This is because both CBD and THC are active ingredients in FDA-approved drugs and were the subject of substantial clinical investigations before they were marketed as foods or dietary supplements. Under the FD&C Act, it’s illegal to introduce drug ingredients like these into the food supply, or to market them as dietary supplements.

The FDA’s guidance indicates that the FDA is asserting jurisdiction over many hemp-derived products, at least to the extent they are foods or dietary supplements or if they are making health claims. The FDA also announced that certain products originating from “hulled hemp seeds, hemp seed protein and hemp seed oil” were generally recognized as safe in foods and ingestible products so long as they do not make medical claims.

So just as quickly as the DEA exited, the FDA entered claiming authority as the new sheriff. So what of trademarks under this new sheriff?

Generally, the Trademark Office won’t refuse a trademark application based on unlawful use in commerce unless “either (1) a violation of federal law is indicated by the application record or other evidence, such as when a… federal agency responsible for overseeing activity in which the applicant is involved, and which activity is relevant to its application, has issued a finding of noncompliance under the relevant statute or regulation, or (2) when the applicant’s application-relevant activities involve a per se violation of a federal law.” See 37 C.F.R. §2.69.

Unfortunately, for many ingestible CBD products, the Trademark Office may take the FDA’s word that it is responsible for overseeing CBD and take its guidance to mean that edible products containing CBD are not permitted in interstate commerce. We won’t know for a few months until the currently pending trademark applications for ingestible hemp products are reviewed and until the FDA releases its guidance on how CBD and hemp-derived products will be treated. On the other hand, there may be trademark registrations available for non-food products, non-dietary supplement products, hemp seed products, hemp plants, hemp seed protein, and hemp seed oil and other products – so long as there are no medical claims associated with them.

We had hoped things would settle out with passage of the Farm Bill, but in some respects the old Irish proverb could apply: Better the Devil you [knew]?

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Hemp is “legal,” but what does it mean for U.S. trademarks?

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