CBD and Your Branding

Cannabidiol (CBD) is a chemical compound, a cannabinoid, derived from the marijuana plant (cannabis sativa).  CBD is generally non-psychotic.  Most forms contain only trace amounts of the hallucinogen THC (tetrahydrocannabinol).  Used in supplements, creams, oils, tinctures, and ointments CBD is said to have a range of health and palliative benefits.  Where states have made marijuana or medical marijuana legal, a growing number of companies are producing and marketing products containing CBD, and recently the Federal Drug Administration approved a CBD-based medication for the treatment of certain forms of epilepsy.

CBD is illegal under U.S. federal law, however, and that affects branding and the protection of your trademarks used on CBD products and related services.  In effect, you should not be able to obtain federal registration of, and the federal protection of rights in any trademark used on any cannabis product or in connection with the distribution of cannabis products, including those containing CBD.

The Law

Some would say cannabidiol is “technically illegal,” but that would be inaccurate and risky.  Although there may have been questions and questionable assertions made about the legality of CBD and other marijuana derivatives (hemp oil, for example) prior to January, 2017, clarifications made by the U.S. DEA, a new code added to Schedule I of the Control Substances Act (CSA), and comments, including a pointed footnote, published in the Federal Register1 make clear that the Department of Justice places CBD among Schedule I drugs along with heroin, ecstasy, and LSD no matter how much or how little of the hallucinogenic component the CBD may contain.  So it is unlawful under the CSA “to manufacture, distribute, or dispense, or possess with intent to manufacture, distribute, or dispense, a controlled substance,” including CBD, in the United States, regardless that 30 states permit use of marijuana and its derivatives to a greater or lesser extent, and regardless that the federal government so far has chosen not to widely enforce federal law in contravention of those state laws.  This relates to branding because U.S. trademark law provides “no exception” that allows acts of the U.S. Congress to be ignored.

So how does this affect trademark regsitration?

To register a trademark in the U.S. Patent and Trademark office, the goods and services with which the trademark is used must be traded (moved, shipped, offered, provided) “in commerce,” a term defined as trade “which may lawfully be regulated by Congress.”  That is, specifically, trade between states as opposed to trade within a state.2  So, “technically,” regardless of what may be permitted within a state, because it is unlawful to move or distribute marijuana and goods containing any marijuana derivative between states, trademarks cannot lawfully be registered in the U.S. Patent and Trademark Office for use on marijuana products, on goods containing CBD or any other cannabinoid, or for use with services to distribute goods containing CBD or other marijuana derivatives.

This is worth noting at this time because, when you have a marijuana business in a state where your business is legal, you expect your business to grow, and you want to protect your brand and have the ability to prohibit others from using your trademark anywhere in the country.  You may have heard or been told that, in spite of CBD being illegal, the U.S. Trademark Office has registered trademarks for use on goods containing CBD and for services including the distribution of such goods.  In fact, yes, since October, 2013, over 400 applications have been filed for federal registration of marks for use on goods containing CBD and services for distributing them, and fifty-one of those marks are now registered, the latest registered just last month.

More to the point, in spite of the prohibition, hundreds of applications to the U.S. Trademark Office based on “intent” to use a trademark on goods containing CBD or for distribution of CBD goods have been “allowed” for registration and (for the time being) remain active.

The times they are a-changin’

In the manual of procedures that guides trademark examiners as they determine whether a mark may be registered, the registration of marks for use on marijuana and in connection with its distribution has been referred to as unlawful since at least January, 2013.3  In each edition of the manual since 2013, this exclusion has become ever more specific, citing the CSA, amendments to the CSA, and in the latest edition, October, 2017, explicitly including “marijuana extracts.”  Since then, the path to registration of trademarks for use on and in connection with CBD-containing goods (and related components, such as hemp oil) has become increasingly difficult, and it is not possible to predict with any certainty what will become of existing registrations, allowed applications, and new applications.

Keep in mind that trademark examiners are effectively independent actors, each permitted to a great extent to interpret the rules as he or she reads them.  So new applications appear to be meeting a range of fates.  It has been common for some time for an application mentioning CBD, hemp, hemp oil, and especially marijuana, cannabis, or THC, to be questioned, and the applicant required to make a statement that the identified goods and services are not unlawful.  In many instances, when CBD has been claimed to come from “industrial hemp”4, the application was allowed, but that appears to have become rare.  More applications mentioning CBD (and related derivatives) are currently being refused outright as “unlawful.”  Some are still being questioned, but it’s not yet clear what answers will be acceptable, and it may be necessary for applicants to delete CBD from their applications, if that would even be permitted in a particular case.  At the same time, however, a good number of examiners seem willing to sit on CBD applications, waiting for the rules to become more clear or change.

So far nothing has been done to invalidate the 51 existing registrations for CBD goods and distribution services.  But CBD applications that had been allowed, some extended to the maximum limit (three years after allowance), are now being refused registration upon making the mandatory Declaration of Use and “proof of use” in interstate trade necessary for registration.

The moral

For the time being, it seems at least unwise to invest in applying for U.S. registration of trademarks for use with goods containing marijuana extracts of any kind or the distribution of them.  Even if a registration were obtained, it would be next to impossible to enforce and defend federal trademark rights in your mark.  As an alternative, however, most states within which marijuana is legal will register a state trademark for use on some or all cannabis goods and services, and U.S. trademark registration may be obtained for the related goods and services you may make and distribute (supplements, body care, cosmetics, food) that do not contain CBD or other unlawful substances and for providing information and advocacy related to marijuana.

[1] “Establishment of a New Drug Code for Marihuana Extract,” Federal Register, 12/14/2016, https://www.federalregister.gov/documents/2016/12/14/2016-29941/establishment-of-a-new-drug-code-for-marihuana-extract#citation-1-p90195

[2] It should be noted that use of a trademark on marijuana and derivative products within a state which permits marijuana use and within another such  state and within another state … is not trade between states.

[3] Trademark Manual of Examining Procedure §907

[4] An agricultural product used for its fibers in textiles and cordage, but still illegal to grow in the U.S. under the CSA (except under license for research purposes), so that almost all of such products of the industrial hemp plant are imported.