NNBV guest column: the state of affairs for federal CBD trademarks

In Nevada, where recreational and medicinal marijuana are legal and available in many different ingestible forms, owners of cannabis and hemp-related trademarks may be able to obtain state trademark registrations to protect their brands.

A Nevada state trademark registration protects a registrant's trademark rights only within the state of Nevada, and does not afford a registrant with substantially more rights or remedies than what already exists under the common law.

Under the common law, trademark rights are derived from use, and therefore, the general rule is the first party to use a trademark in commerce is the owner of the trademark where the trademark is used in commerce.

Since common law trademark rights are limited to geographic areas where the trademark is being used, trademark owners often seek to obtain federal trademark registrations, which protect a registrant's trademark rights across the United States, puts the public on constructive notice of the registrant's rights in the given trademark, cuts off certain common law rights that may exist, and provides a wide array of remedies.

Because marijuana still remains a Schedule 1 drug under the Controlled Substance Act, the United States Patent and Trademark Office (“USPTO”) will not register federal trademark registrations that are used to identify goods containing marijuana.

However, with the passage of the Agricultural Improvement Act of 2018 on Dec. 20, 2018, often referred to as the “2018 Farm Bill,” federal trademark registrations are now available for certain types of hemp products, including certain cannabidiol (“CBD”) products.

CBD products are now extremely popular and available throughout the United States. These goods range in form from hand lotions, to capsulized sleep aids, to gummy bears, and can be purchased through massive retailers like Amazon.

In light of the popularity of CBD products, many trademark applications for CBD products at the USPTO have been filed by individuals and companies that seek to protect their brand and prevent others from using their given name or design.

Under the 2018 Farm Bill, a federal trademark application that identifies certain types of CBD goods that was filed on or after Dec. 20, 2018, in which the goods that are derived from hemp and contain less than 0.3% of federally illegal component tetrahydrocannabinol (“THC”), is a potential candidate for federal registration. However, federal registration is not currently available for all CBD goods that meet these requirements.

After the 2018 Farm Bill was signed into law, the commissioner of food and drugs for the United States Food and Drug Administration (“FDA”) issued a statement on the Farm Bill and the FDA's regulation of products containing cannabis and cannabis-derived compounds. Go to bit.ly/2MwhGEV to read that statement and learn more.

In this statement, Commissioner Dr. Scott Gottlieb, MD, stated that although the 2018 Farm Bill removes hemp as an illegal substance under federal law, the FDA will continue to regulate cannabis products under the Food, Drug, and Cosmetic Act (“FD&C Act”) and Section 351 of the Public Health Service Act.

With regard to CBD and other cannabis and cannabis-derived compounds, the FDA made clear that the addition of CBD to food products and dietary supplements is unlawful under the FD&C Act.

Because of the FDA's stance, the USPTO will not issue federal registrations for food, beverages or other ingestible CBD goods at this time. With that said, federal registrations may be issued for non-ingestible goods such as hand lotions and non-ingestible oils that contain CBD.

Therefore, the current state of affairs for CBD trademark applications at the federal level is that registrations may issue for CBD goods that are not ingestible (like topical creams) and prohibited by the FDA, but registrations will be refused for marks that identify ingestible goods such as food and beverages even if they contain less than 0.3% THC.

The legal landscape as it pertains to cannabis and hemp has changed greatly over the last several years, and will most likely change again in the near future.

As such, individuals in the cannabis and hemp industry should stay up-to-date on current developments on this emerging area of law and develop strategies to build and protect their trademarks and service marks.

Matt Francis is a shareholder with Brownstein Hyatt Farber Schreck, LLP, working out of the law firm's Reno offices. Go to www.bhfs.com to learn more.