In the wake of the 2018 Farm Bill, the United States Patent and Trademark Office (Trademark Office) issued an Examination Guide regarding the prosecution of applications covering hemp derived goods and services. The great news is that there is a pathway to federally registering brand names for hemp-based cannabinoid products, though there are some caveats and restrictions that we discuss below. Despite this significant advance, applications for hemp-derived cannabinoid products applied-for prior to the passage of the 2018 Farm Bill face some challenges.

First, a recap of what remains the same:

The Trademark Office reiterated that registrations will not issue for goods and services that are derived from “marijuana,” as defined under the Controlled Substances Act (CSA), because marijuana remains federally unlawful. This also includes “paraphernalia” that is primarily intended for use in manufacturing, distributing, or dispensing marijuana. Keep in mind that CBD may be derived from either marijuana (as defined under the CSA) or hemp (as defined by the 2018 Farm Bill).

Under the 2018 Farm Bill, many hemp products are now federally lawful, so long as the products comes from any part of the Cannabis sativa L. plant, whether growing or not, with a delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis. However, federal registration is not available for all hemp products:

United Sates Department of Agriculture (USDA) Controls Domestic Production: While the 2018 Farm Bill made hemp goods potentially lawful if they are derived from “hemp” (i.e., contain less than 0.3% THC), to date, the USDA has not promulgated regulations, created its own hemp-production plan, or approved any state or tribal hemp-production plans to permit domestic hemp cultivation.

Federal Food, Drug, and Cosmetic Act (FDCA) Controls: The 2018 Farm Bill explicitly reserved the FDA’s authority to regulate products under the Federal Food, Drug, and Cosmetic Act (FDCA), which prohibits selling or otherwise introducing into commerce any food (including any animal food or feed) that includes a substance for which substantial clinical investigations have been instituted and publicly announced. As CBD is an active ingredient in FDA-approved drugs and is a substance undergoing clinical investigations, the USPTO will not register marks for “ingestible” CBD-infused products including, foods, beverages, dietary supplements, or pet treats, regardless of whether the CBD comes from “hemp.”

Controlled Substances Act (CSA) Controls: To the extent that the cannabis product has more than 0.3% THC, the cannabis is considered marijuana, not hemp, and remains federally unlawful.

Now for the new and somewhat challenging stuff:

For applications filed before the enactment of 2018 Farm Bill, the Trademark Office will allow certain amendments to pending applications to qualify for federal registration:

Amending the Application Date & Identification: Intent-to-use applications covering hemp products filed before December 20, 2018, will be refused based on unlawful use or lack of a bona fide intent to use the mark in commerce. Meaning, the Trademark Office’s position is that since it was unlawful to provide hemp products in commerce prior to this date, applicants could not have had a bona fide intent to offer lawful products until this date. To overcome this refusal, the Trademark Office will allow the applicant to do the following:

• Amend the filing date to December 20, 2018; and

• Amend the identification to specify that the goods/services are intended for use with hemp with “a delta-9 THC concentration of not more than 0.3% on a dry weight basis.”

For applications originally filed based on use in commerce (rather than intent-to-use), applicants may amend the application to intent-to-use and then do the two steps identified above.

[For applications filed on or after December 20, 2018, the Trademark Office recognizes that hemp goods may be lawful, but only if the goods do not violate the FDCA and include the language about the hemp being not more than 0.3% THC in the identification.]

While we support the Trademarks Office’s position that the scope of resulting registrations should be limited to goods compliant with federal law, we foresee problems tying the identification language to the current federal law. The laws surrounding cannabis, hemp, and CBD, are anything but well-established and while 0.3% is the current THC limit for cannabis to be considered “hemp,” it is not unthinkable that Congress may raise or lower this number given that new research into the plant that will occur as a result of the 2018 Farm Bill. Therefore, if an applicant amends its identification to state that the CBD is derived from hemp with not more than 0.3% THC, and the lawful limit is subsequently lowered to 0.2% THC, this legislative shift would unexpectedly make the identified goods and services unlawful.

Additionally, when an application filing date is changed, the priority date is also changed, and the Trademark Office plans to re-examine such amended applications to determine whether there have been any marks filed in the interim that create a likelihood of confusion with the applied-for mark. Since priority is central factor in any trademark dispute and there are hundreds of applications for hemp products that will have a filing date of December 20, 2018, this potentially creates significant issues including:

• With hundreds of marks now with the same priority date, who actually has priority
• Responding to likelihood of confusion refusals based on applications filed after the original filing date and before the amended date of December 20, 2018

Further, this new procedure does not expressly account for the possibility that an applicant could have had a bona fide intent to create a product where the CBD is derived from the parts of the cannabis plant that have always been excluded under the CSA, i.e., the mature stalks. As we have previously discussed, the Trademark Office appears to maintain its position that there are no commercially appreciable amounts of CBD in mature hemp stalk even though there are international providers of hemp stalk biomass which, in fact, contain commercially viable amounts of CBD. With the support of expert testimony, Evoke Law overcame unlawfulness refusals prior to the 2018 Farm Bill by providing the Trademark Office with irrefutable scientific evidence that the mature stalks do indeed produce CBD in appreciable quantities without the commingling from other plant parts, such as ‘resinous’ secretions.

Note to Hemp Cultivators: For applications covering the cultivation, manufacturing, or sales of hemp, the USPTO will inquire into the applicant’s authority to conduct such activities. The 2018 Farm Bill requires domestic hemp be produced under license or authorization by a state, territory, or tribal government in accordance with a plan approved by the USDA. As discussed above, the USDA has not promulgated any regulations, created its own production plan, or approved any state hemp production plans. Meaning, there is no authorized domestic hemp production except for states, tribes, or institutions of higher education that can continue to operate under the authorities of the 2014 Farm Bill until the 2018 plan and regulations are in place. It is presently unclear what information an applicant will need to provide to prove it is, or plans to, lawfully cultivate hemp under the 2018 Farm Bill.

As discussed, there are many potential issues with the USPTO’s guidance that could have widespread ramifications for the industry. Stay tuned to see how it shakes out.