Will CBD Companies Finally Get Trademark Protection
The CBD industry in the United States has grown exponentially in the past few years. According to data compiled by Statista, consumer sales of CBD products will reach around $1.15 billion by 2020, compared to about $100 million of sales in 2014.1 This explosive growth occurred while CBD occupied something of a gray zone in the U.S. regulatory framework following the passage of The Agricultural Act of 2014 – also known as the 2014 Farm Bill.
The 2014 Farm Bill allowed certain qualified farmers to grow industrial hemp as part of a research pilot program associated with a state department of agriculture or an institution of higher learning.2 While the bill did not separate industrial hemp from the definition of marijuana provided in the Controlled Substances Act, where it is classified as a Schedule 1 drug, the approval of these hemp cultivation programs led many to consider hemp-derived CBD to be a legal substance. Although the DEA made clear statements to the contrary,3 the CBD industry in the U.S. grew exponentially and faced minimal opposition from federal regulatory agencies.
One place where CBD companies did face significant and continuous disapproval, however, was the United States Patent and Trademark Office. While CBD companies argued that they were selling a legal substance, developed according to the provisions clearly articulated in the 2014 Farm Bill, the USPTO consistently denied trademark applications for CBD products.4The USPTO typically rejected such applications on the grounds that CBD was illegal according to the Controlled Substance Act and could not satisfy the “legal use in commerce” requirement of trademark registration.5 Thus, while CBD companies proliferated, their increasingly valuable intellectual property was left unprotected.
On December 20, 2018, the Agriculture Improvement Act of 2018, commonly referred to as the 2018 Farm Bill, was signed into law.6 Among other things, the new law made significant changes to federal regulation of the industrial hemp industry, including the removal of hemp’s inclusion in the definition of marijuana under the Controlled Substances Act. Thus, one of the foremost justifications by the USPTO in denying trademark protections for CBD products appears to be moot.
However, the 2018 Farm Bill explicitly preserved the U.S. Food and Drug Administration’s authority to regulate the inclusion of food, beverages and supplements, and the FDA has not yet altered its stance pertaining to the legality of CBD in these products. According to a statement by FDA Commissioner Dr. Scott Gottlieb, the FDA still deems it illegal 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.”7 Thus, while one door appears to have opened for CBD companies in their struggle for trademark recognition, another may have closed, as the USPTO may adopt the FDA’s stance in future evaluations of CBD-related trademark applications.
Ultimately, it is simply too early to accurately predict what effects the 2018 Farm Bill will have on the USPTO’s treatment of CBD-related intellectual property. The CBD industry, however, does not appear content to wait around, as over 700 applications are already on file pertaining to hemp or CBD products.8
Westword, Total U.S. cannabidiol (CBD) consumer sales from 2014 to 2022 (in million U.S. dollars), Statista, https://www-statista-com.fls.idm.oclc.org/statistics/760498/total-us-cbd-sales/ (last visited Feb. 14, 2019). [https://perma.cc/QF48-CS6Z]↩
Statement of Principles on Industrial Hemp, 81 Fed. Reg. 53395 (Aug. 12, 2016).↩
Clarification of the New Drug Code (7350) for Marijuana Extract, Drug Enforcement Admin., https://www.deadiversion.usdoj.gov/schedules/marijuana/m_extract_7350.html (last visited Feb. 13, 2019). [https://perma.cc/6DC9-RFZ5]↩
Brendan Palfreyman, Legalization of Hemp Opens Door to Federal Trademark Registration for Hemp and CBD Products, JDSupra (Dec. 18, 2018), https://www.jdsupra.com/legalnews/legalization-of-hemp-opens-door-to-52399/. [https://perma.cc/9TEJ-8YWJ]↩
See In re Morgan Brown, 119 U.S.P.Q.2d (BNA) 1350, 1351 (T.T.A.B. 2016).↩
Agriculture Improvement Act of 2018, Pub. L. No. 115-334, 132 Stat. 4490.↩
Food & Drug Admin., Statement from FDA Commissioner Scott Gottlieb, M.D., on signing of the Agriculture Improvement Act and the agency’s regulation of products containing cannabis and cannabis-derived compounds, (December 20, 2018).↩
Sarah Nagae, Passage of the Farm Bill May Assist Cannabis Industry Trademark Applicants, Nexsen Pruet Insights (Jan. 14, 2019), https://www.nexsenpruet.com/insights/trademark-registration-for-hemp-and-cbd-products. [https://perma.cc/93SE-3T56]↩