It seems as though no matter where you go these days, you're bound to encounter a product containing cannabidiol, commonly referred to as CBD. As you've likely heard by now, the 2018 Farm Bill (formally, the Agriculture Improvement Act of 2018), which was signed into law on December 20, 2018, legalized the regulated production of hemp. This triggered a corresponding amendment of the Controlled Substances Act (CSA), removing "hemp" from the definition of marijuana and specifically excluding "tetrahydrocannabinols (THC) in hemp" from the listing of Schedule 1, or most dangerous, drugs. Hemp is now defined as cannabis plants and derivatives thereof, such as CBD, that contain "no more than 0.3% THC on a dry-weight basis," and is no longer considered a controlled substance under the CSA. However, hemp remains subject to regulation by states. For instance, the State of Idaho seized a truckload of hemp and then pursued a criminal complaint against a driver transporting hemp from Oregon, where it is legal, to Colorado, where it is also legal.

Registering Trademarks

What does all this mean for brand owners? For one, the U.S. Patent and Trademark Office (USPTO) has received a flood of applications to register trademarks for use with CBD-infused products. If you're looking to break into this fast-growing market, you'll want to select a trademark or brand name for your product and ensure it is protected. You'll also want to make sure no one else is already using the same or similar trademark for identical or related goods (or potentially services), as that could raise potential obstacles (such as infringement claims) that could stymie moving forward with your brand. Conducting a comprehensive trademark search is always a good place to start when establishing a new brand. Comprehensive searches cover records from both U.S. state and federal trademark databases as well as common law databases, such as company and domain name registries and use of similar trademarks on Internet websites.

Once the search is done and the coast appears clear, you'll want to secure registration for your trademark. While certain CBD-based products with low-THC content are now legal under federal law, and the trademarks under which they are used are capable of federal registration, there are several important guidelines of which to be aware when seeking U.S. trademark registration for these types of marks and products.

Firstly, as noted above, only hemp-derived CBD is federally legal. Cannabis and CBD-derived from marijuana, i.e., Cannabis sativa L. with more than 0.3% THC on a dry-weight basis, still violates federal law, and applications encompassing such goods will be refused federal registration. Additionally, the goods listed in the trademark application must specify that they contain less than 0.3% THC. If not, the Trademark Examiner will issue an office action to inquire whether the goods comply with federal law. Furthermore, if the terms "HEMP," "CBD," or another variation of the terms cannabis or cannabidiol (e.g., "CANNA") are included as part of the applied-for mark, this will also trigger an inquiry by the Trademark Examiner as to whether and to what extent CBD is featured as an ingredient of the products (or characteristic of the services), and whether the provision of the goods and/or services in U.S. commerce would be deemed lawful.

As also stated above, to be considered legal, hemp must be cultivated in compliance with federal regulations. Not just anyone can grow hemp; a license from the U.S. Department of Agriculture is required. Accordingly, it is likely the Trademark Examiner will inquire into whether the hemp from which the CBD was derived was grown within the U.S., was obtained from an authorized grower or supplier of industrial hemp as sanctioned by the Farm Bill, and whether the covered goods and/or services to be provided under the applied-for mark comply with the Controlled Substances Act. Accordingly, make sure you have all relevant information and are prepared to answer these questions when they arise. The USPTO issued an Examination Guide to help trademark applicants better understand its procedures for processing applications for goods and services containing or concerning CBD (see here).

Seeking state registration, as opposed to federal, for your trademark or brand name is another option to consider, especially if you will be conducting business in one of the several U.S. states that have legalized recreational marijuana use for adults. Each state has its own requirements for trademark registration, and state trademark registrations only confer the benefits of registration within the boundaries of that state. However, if you plan to offer cannabis-related products or services that go beyond the 0.3% THC amount authorized by the Farm Bill, and are operating in a marijuana-friendly state, registering your trademark at the state level can be an effective way to protect your mark and prevent third parties from using the same or confusingly similar trademarks in the same state.

Regulatory Considerations

The Farm Bill explicitly preserved the authority of the Food and Drug Administration (FDA) to regulate products falling within the parameters of the Federal Food, Drug and Cosmetic Act (FDCA). Thus, while hemp-derived CBD has been removed from the Controlled Substances list, it is important to note that food, beverages, dietary supplements, pet treats, and other consumables containing added CBD, or THC of any amount, could still be considered unlawful as containing an unapproved food additive or containing an additive that is not generally recognized as safe. The FDA therefore maintains the right to enforce the FDCA. This prohibition on CBD-infused consumable products hasn't stopped scores of companies from producing, marketing and selling CBD-infused waters, teas, candies, and a multitude of other items for both human and animal consumption. However, if you're selling such items, be advised you could receive a warning letter from the FDA, and the FDA, along with state and/or federal agencies, could decide to take enforcement action.

That said, the FDA has stated that the agency lacks information about the safety of consumables and has opened a docket to receive information. In the interim, the FDA has taken vigorous action against companies that market products containing CBD if any sort of claim to health or therapeutic benefit is made. Thus, claims or marketing can focus on well-being or other aspects of CBD products aside from making claims that could be construed as treating or managing disease. Selling unapproved products with unsubstantiated therapeutic claims is not only a violation of U.S. law, but under the FDA's microscope. While the USPTO will generally not inquire into a brand's marketing claims when determining whether to grant registration of a mark, this is still something to be aware of as you prepare to bring your products to market to ensure you're operating on the right side of the law. To assist the public with understanding the current FDA regulation of the CBD products, the FDA published a list of frequently asked questions and answers (see here).

These are just a few of the many things to consider when launching products or services in the CBD space. If you have any questions about the matters discussed above or otherwise pertaining to CBD products, please don't hesitate to contact us.

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