October 14, 2021 by Jonathan Purow of Zuber Lawler
Like all other companies, cannabis beverage companies build their brands through blood, sweat and tears. Unfortunately, one of the many inequities that arises from the federal legal issues tied to cannabis is that cannabis brands cannot obtain the same types of trademark protection that non-cannabis brands have.
A non-cannabis company can choose a new trademark, search to ensure that it is clear for use and/or registration, and if the coast is clear, they can commence use and apply for and obtain a federal trademark registration. Amongst other benefits, a federal trademark registration gives the owner “nationwide constructive use” of that trademark for those goods, which is a valuable right when the time comes to enforce against interlopers using a similar trademark for similar products.
Yet things are not so simple for cannabis beverage companies, and so these companies need to be as clever with their trademark strategies as they are with their product development. If a beverage contains cannabinoids that are not derived from hemp deemed legal by the 2018 Farm Bill, then the United States Patent and Trademark Office (“USPTO”) will reject a federal trademark application for the trademark in that brand. The USPTO will certainly reject any application for a trademark used in association with beverages that contain THC in any quantities greater than those found in hemp.
Unfortunately, the situation for trademark applications for brand names of beverages containing CBD derived from hemp is not any more favorable. As CBD is the active ingredient in the FDA-approved drug Epidiolex, and the FDA has not issued regulations governing the use of CBD in beverages and edible products, the USPTO rejects all trademark applications for marks used with beverages containing CBD in amounts not standard to hemp. The industry has been waiting for the FDA to issue these CBD regulations for years, and there is no guarantee that they will resolve this trademark obstacle when they do.
While certain applicants try to withhold information about their product containing CBD or THC in their descriptions of their products in their trademark applications, or in the photos of their products they submit with their application, Examining Attorneys at the USPTO conduct online research to sniff out (pun intended) cannabis products. Even if the Examining Attorneys did not find the product’s connection to cannabis and the application proceeded to registration, any such registrations could potentially be canceled on the basis that they were obtained through fraud.
So what is a cannabis beverage company supposed to do to gain some type of trademark protection for their brand name? First off, in states where marijuana is legal it is typically possible to obtain a state trademark registration for that mark. But the protection of that registration extends only so far as the boundaries of that state. Cannabis beverage companies will therefore try to adopt different strategies to obtain the best possible federal trademark coverage that they can. Some parties take advantage of the fact that the USPTO permits federal trademark applications on the basis of “intent to use” to file rolling series of applications in their mark, as a bet that progress will be made on CBD regulations or federal legalization before the date that the application would ultimately be abandoned. Other parties file trademark applications using very specific terms to describe the cannabinoids they contain to avoid trigger words that would earn a rejection from the USPTO, and they can potentially obtain registrations.
The strategy in filing these applications has to continually shift based on developments with the governmental agencies like the FDA that the USPTO turns to for guidance. For example, the USPTO now rejects applications for ingestible products that contain Delta-8 THC.
Ultimately, the unfair circumstances that enable non-cannabis beverage companies to protect their trademarks nationwide via a federal trademark registration while a cannabis beverage company cannot do the same, is just another of the MANY reasons why the federal government needs to rehaul its approach to cannabis. We can only hope for that day in the future when Cannabis Beverage Association members will find it as easy to protect their valuable trademarks as Pepsi does.KEEP READING