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USPTO Issues CBD Trademark Guidelines in Light of the 2018 Farm Bill: Key Takeaways

On May 2, 2019, the USPTO released its new guidelines on how it will examine federal trademark applications for CBD products in light of the 2018 Farm Bill.[1] While these new guidelines are encouraging for canna-businesses that produce or cultivate hemp and/or manufacture, market, and sell CBD products, considering the carve outs and caveats included therein, it may end up begging more questions than it answers. Below are a few key takeaways:

The New Guidelines Are Based on Source and THC Concentration

From the outset, the new guidelines reiterate the USPTO’s continuing prohibition of federal trademark protection for all parts of the currently-Schedule I substance, “‘Marihuana’ (commonly referred to as ‘marijuana’),”[2] which are defined as: 

[A]ll 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 [(subject to certain exceptions)]. 21 U.S.C. §802(16).

In light of the 2018 Farm Bill, however, “hemp” has been removed from this classification. Furthermore, under the new guidelines, “cannabis plants and derivatives such as CBD that contain no more than 0.3% THC on a dry-weight basis are no longer controlled substances under the CSA,” but  “only if the goods are derived from ‘hemp.’” The USPTO also indicated that it will treat services involving hemp similarly to how it treats goods. For applications involving hemp cultivation or production, the examining attorney will inquire into the Applicant’s authorization to produce hemp.[3]

Finally, Applicants (and/or their attorneys) will have to certify and/or specify in goods and services identifications that the goods or services sought to be protected comport with these requirements.

The New Guidelines Are Retroactive

The new guidelines also set the date the 2018 Farm Bill was signed into effect, December 20, 2018, for determining whether previously-filed federal trademark applications can benefit from the 2018 Farm Bill. For applications filed on or after December 20, 2018, assuming a description of goods and services that comports with the new guidelines, everything should be compliant; but those filed before December 20, 2018 have a tougher path.

Specifically, for those use-based applications filed before enactment of the 2018 Farm Bill “that identify goods encompassing CBD or other cannabis products, registration will be refused due to the unlawful use or lack of bona fide intent to use in lawful commerce under the CSA.” The new guidelines, however, allow Applicants of such applications to amend the application to provide a proper, legal basis for registration. In particular, Applicants may amend (1) the filing date to December 20, 2018 and, for applications based on use in commerce, (2) the filing basis to intent-to-use (as the USPTO will consider any such previously submitted use as illegal prior to the 2018 Farm Bill).

The USPTO will also require Applicants to amend goods identifications to “specify that the CBD or cannabis products contain less than 0.3% THC” and are derived from hemp. We expect the USPTO to update its Trademark ID Manual with acceptable identifications for CBD goods and services shortly.

Unfortunately for Applicants of amended applications, the guidelines also require the USPTO to conduct a new search based on the amendments, including the new filing date. This can raise a number of points for pending applications. For example, can Applicants delay amendment of their filing date to try to maintain an earlier filing date against later filed applications (and for how long)? And for pre-Farm Bill applications directed to legal goods or services suspended due to earlier-filed pre-Farm Bill applications directed to formerly “illegal” goods or services, how quickly will the USPTO act to unsuspend the suspended application in light of the new, effective December 20, 2018 filing date for the earlier-filed application (which will then be suspended instead)?

While this uncertainty may be concerning for those seeking to expeditiously and effectively comply with the new guidelines, the USPTO’s decision to include such explicit instructions for benefiting from the Farm Bill hopefully indicates the USPTO’s willingness to help Applicants navigate this process moving forward. But, the hurdles Applicants face under the new guidelines do not stop here.

The New Guidelines Do Not Affect FDA Prohibitions for Consumable CBD Products

The new guidelines also cautioned that consumable CBD products (for humans and pets) must also be legal under the Federal Food Drug and Cosmetic Act (FDCA) in order for marks covering such products to be registrable. The 2018 Farm Bill “explicitly preserved FDA’s authority to regulate products containing cannabis or cannabis-derived compounds under the FDCA.” Specifically, because “CBD is an active ingredient in FDA-approved drugs and is a substance undergoing clinical investigations” and “[t]he use in foods or dietary supplements of a drug or substance undergoing clinical investigations without approval of the U.S. Food and Drug Administration (FDA) violates the FDCA,” Applicants will have to ensure compliance with the FDCA prior to applying for federal trademark protection under the new guidelines.

In particular, the new guidelines clarified that “registration of marks for foods, beverages, dietary supplements, or pet treats containing CBD will still be refused as unlawful under the FDCA, even if derived from hemp, as such goods may not be introduced lawfully into interstate commerce.”

It is, therefore, difficult to imagine any consumable CBD product gaining federal trademark protection without gaining FDA approval. Currently, Epidiolex is the only FDA-approved drug containing an active ingredient (CBD) derived from a cannabis plant.

On the other hand, cosmetic products containing hemp-derived CBD may be eligible for federal trademark protection. Cosmetics are defined under 21 U.S.C. § 321(i) as:

(1) articles intended to be rubbed, poured, sprinkled, or sprayed on, introduced into, or otherwise applied to the human body or any part thereof for cleansing, beautifying, promoting attractiveness, or altering the appearance, and (2) articles intended for use as a component of any such articles; except that such term shall not include soap.

Generally, cosmetic products are not subject to FDA premarket approval.[4] As the FDA has explained, although “[c]ertain cosmetic ingredients are prohibited or restricted by regulation…currently that is not the case for any cannabis or cannabis-derived ingredients.”[5]

Additionally, the FDA evaluated three generally recognized as safe (GRAS) notices for three hemp-seed derived food ingredients, hulled hemp seed, hemp seed protein powder, and hemp seed oil, and determined these hemp-seed ingredients are safe and can be legally marketed in human foods.[6] Therefore, human food containing these hemp-seed ingredients may also be eligible for federal trademark protection.

But all is not lost for the large part of the industry that is focused on consumable CBD products for health and wellness as the FDA continues to acknowledge and address these challenging crossroads of the 2018 Farm Bill and CBD-based drugs and consumables. So far, the FDA has taken several concrete new steps to address these issues, including:

  1. Scheduling a public hearing on May 31, 2019 for CBD stakeholders to “share their experiences and challenges with these products, including information and  views related to product safety,” as well as provide a “broader opportunity for written public comment.”[7]
  2. Forming “a high-level internal agency working group to explore potential pathways for dietary supplements and/or conventional foods containing CBD to be lawfully marketed; including a consideration of what statutory or regulatory changes might be needed and what the impact of such marketing would be on the public health.”[8]
  3. Updating the FDA’s website with “answers to frequently asked questions on this topic to help members of the public understand how the FDA’s requirements apply to these [CBD] products.”[9]
  4. Issuing “multiple warning letters to companies marketing CBD products with egregious and unfounded claims that are aimed at vulnerable populations [including dangerous marketing efforts that CBD cures or otherwise slows the progression of diseases including cancer, Alzheimer’s, and fibromyalgia, among others].”[10]

Thus, while the tides may still be shifting, Applicants should carefully consider both the timing and content of any federal trademark application aimed at any CBD products that potentially need FDA approval.

The New Guidelines Do Not Affect Current Prohibition for Federal Canna-Trademarks Under the Lanham Act and CSA

Finally (and frustratingly, albeit not surprisingly), the USPTO also confirmed that it is not revising its stance on federal trademark registration of cannabis-related products and services. By way of background, the USPTO has refused to register trademarks on cannabis goods or services, particularly those in the context of the cannabis product itself (e.g., a particular strain of leafy cannabis), due to the lack of any lawful uses of the applied-for marks in commerce. The Lanham Act expressly prohibits registration of illegal products and services, such as those still falling under the Controlled Substances Act (CSA). And the new guidelines unequivocally reiterate this prohibition.

That said the new guidelines provide some additional guidance on how the USPTO will treat federal trademark applications in the canna-industry. For Applicants with pending applications for marks covering products or services that are now legal under the CSA, examination should proceed under the new requirements. For those with marks covering products or services that may still be illegal under the CSA, but that may be legal under some state laws, federal protection is still elusive and Applicants may need to seek protection under individual state trademark laws. And, as the USPTO’s examination has been historically inconsistent concerning cannabis products,[11] it is not a stretch of the imagination to think that the USPTO may continue to swing back toward more canna-friendly policies in the future.[12]

[1] Cannabidiol (CBD) is one of approximately 113 identified cannabinoids in cannabis plants. Tetrahydrocannabinol (THC) is another, albeit largely unaffected by the USPTO’s new guidelines.

[2] Unless otherwise indicated, all quotations come from the Examination Guide 1-19: Examination of Marks for Cannabis and Cannabis-Related Goods and Services after Enactment of the 2018 Farm Bill, USPTO (May 2, 2019), available at https://www.uspto.gov/sites/default/files/documents/Exam%20Guide%201-19.pdf (referred to herein as “the new guidelines”).  

[3] An Applicant is authorized to produce hemp if the hemp is “produced under license or authorization by a state, territory, or tribal government in accordance with a plan approved by the U.S. Department of Agriculture (USDA) for the commercial production of hemp.”

[4] See FDA Regulation of Cannabis and Cannabis-Derived Products: Questions and Answers, FDA, at Q.13, https://www.fda.gov/news-events/public-health-focus/fda-regulation-cannabis-and-cannabis-derived-products-questions-and-answers#cosmetics (last visited May 14, 2019).

[5] Id.

[6] Id. at Q.12; see also FDA Responds to Three GRAS Notices for Hemp Seed-Derived Ingredients for Use in Human Food, FDA (Dec. 20, 2018), https://www.fda.gov/food/cfsan-constituent-updates/fda-responds-three-gras-notices-hemp-seed-derived-ingredients-use-human-food.

[7] Statement from FDA Commissioner Scott Gottlieb, M.D., on New Steps to Advance Agency’s Continued Evaluation of Potential Regulatory Pathways for Cannabis-Containing and Cannabis-Derived Products, FDA (April 2, 2019), https://www.fda.gov/news-events/press-announcements/statement-fda-commissioner-scott-gottlieb-md-new-steps-advance-agencys-continued-evaluation.

[8] Id.

[9] Id.

[10] Id.

[11] Beginning in 2010, the USPTO invited Applicants to apply for federal trademark registrations on cannabis goods and services by creating a new entry in its Acceptable Identification of Goods and Services Manual for: Class 5: “Processed plant matter for medicinal purposes, namely medical marijuana.” See Justin Scheck, Patent Office Raises High Hopes, Then Snuffs Them Out, Wall Street Journal (July 19, 2010), http://www.wsj.com/articles/SB10001424052748704682604575368783687129488. Within a matter of months, and countless applications later, a spokesperson for the USPTO, Peter Pappas, noted that the newly articulated class “raise[d] examination issues . . . was a mistake and [that the USPTO] ha[d] removed it.” Id.

[12] For context, federal trademarks and service marks have been granted (and continue to be granted) in the context of ancillary products and services (e.g., cannabis apparel companies, and informational services/cannabis networking organizations). Regardless, Applicants should always be prepared to controvert USPTO rejections and readily show how the cannabis-related mark does not violate the CSA – no matter how strained the nexus between the goods or services offered by the Applicant to the currently illegal product may be.