Every business has an imperative to protect their brand identity to the best extent possible, which includes securing trademarks for goods and/or services. For many entrepreneurs, the choice is as simple as applying for the brand name you intend to use, perhaps after you have considered alternatives and competitors, and settled on the name(s) you want to use. For cannabis businesses, it is not so simple.
The signage of the Farm Bill in late 2018 legalized the cultivation and harvest of cannabis with concentrations of THC below a certain threshold, but it did not, however, make all substances derived from such cannabis plants lawful products in interstate commerce. With the exception of Epidiolex (cannabidiol) and Marinol (dronabinol), both approved drugs by the FDA, any other ingestible products that contain CBD or THC are typically deemed unapproved drugs, and the production, distribution, and sale thereof are not lawful uses in commerce according to the United States Patent and Trademark Office (USPTO). Often, simply by virtue of the expressed desire to use a brand name on an ingestible good that contains cannabinoids, the USPTO imputes unlawful intent on the applicant even when the applicant may not have had any intention of violating any law and simply sought to secure the right(s) to use their intended trade name on goods or services that are legal at the state level but may presently not be legal at the federal level.
While state laws permit for the operation of cannabis-based businesses in a majority of states, and retailers from Amazon and Hudson News to 7-Eleven and your neighborhood convenience store or bodega sell CBD infused products, federal branches of government, including the Food and Drug Administration (FDA) and the United States Patent and Trademark Office (USPTO) continue to hold the position that nearly all CBD and THC ingestible goods are not lawful goods in commerce. For purposes of securing a trademark, a USPTO Examiner treats a licensed operator maintaining compliance with state laws concerning the production of ingestible CBD or THC products the same as a black-market operator producing edibles unless that licensed operator is lawfully producing either Epidiolex or Marinol.
Confronted with this perplexing, and paradoxical, reality that operators acting in compliance with state laws are not entitled or afforded any federal brand protection because they are engaged in allegedly unlawful commerce, some businesses elect, at their own risk and peril, to not pursue any federal intellectual property registrations. Some market participants resolve to treating their brand as a common law trademark, sometimes promoting their treatment of their brand as a trademark with the usage of a ™ and even attempting to police out third-party usage. Others, despite the legal reality, commit to applying for a federal trademark for the CBD good(s) with an erroneous belief that the trademark will be successfully secured or planning to hold a place in line and signal to other market participants, entrepreneurs, and potential applicants that there is an entity already using the brand name in the class of goods or services they filed an application or intent-to-use application for.
According to USPTO Examiners, the announced intention to build a brand of CBD ingestible products may, in and of itself, be the poison pill to a federal trademark application. As a result, few applicants, without the help of sophisticated legal counsel, deploy a trademark approach and strategy that has the potential to actually yield the use of a registered federal trademark. While it is true that a federal trademark may not be available to an entity because of the product(s) and/or service(s) they offer within interstate commerce, that does not mean that entity is without an intellectual property portfolio or strategy and is ineligible for any trademark protection or access to using a brand name with the comfort and knowledge that a competitor will not use a similar or an identical brand name or logo. Federal trademarks are still available for lawful goods and services being practiced by lawful market actors who are not otherwise engaged in unlawful commerce.
Any individual or entity that has been denied a federal trademark for their CBD product(s) on the basis that their goods (or services) violate the Controlled Substances Act (CSA) or are otherwise unapproved drugs under the Food Drugs and Cosmetics Act (FDCA) are not without alternative solutions to their brand protection quagmire. Hoban Law Group, and its skilled panel of intellectual property experts, have creative solutions for individuals and entities seeking to build strong brand identity, including federal and/or state trademarks and other types of intellectual property protection (copyrights, patents, etc.), depending on the facts and circumstances. For a consultation on intellectual property strategy, including an analysis of the federal and state trademark landscape for your goods or services, contact the intellectual property experts at Hoban Law Group.