The current disparity between state and federal law regarding businesses engaged in the cannabis-infused food and beverage industry presents a number of challenges. While the majority of U.S. states have passed some sort of legislation opening the door to medical and/or recreational cannabis food and beverage product development and sale, federal law is still engaged in the process of updating its stances on cannabis, including its position on legal trademark protection.
When establishing a legal cannabis food and beverage business, companies need to take whatever steps they can to protect their brands since the U.S. Patent and Trademark Office (USPTO) currently does not provide trademark protection for foods and beverages infused with cannabis—including products made with cannabidiol (CBD), which is no longer considered a controlled substance (the only CBD products currently eligible for federal trademark registration are topical applications or other non-ingestible products). The sticking point is that trademark law prohibits registration of products that companies cannot legally sell across state lines.
When the 2018 Farm Bill was signed into law in December 2018, it removed hemp—defined as cannabis bred to have concentrations of tetrahydrocannabinol (THC) of no more than 0.3 percent on a dry weight basis—from the Controlled Substances Act. This groundbreaking federal legislative decision catalyzed a rapid rush to market.
However, delays at the FDA in providing a regulatory roadmap to approving use of CBD ingredients has hamstrung industry progress. In early February, the Trump Administration revealed that its fiscal 2021 budget plan requests funds be set aside to help FDA invest “in priority activities,” including the “regulation of cannabis and cannabis derivatives.”
So while the federal government is taking steps toward establishing federal oversight for the cannabis-infused food and beverage industry, there is still much work to be done.
In the absence of federal USPTO protection for cannabis food and beverage brands, companies operating in this market need to take other steps toward protecting their brands. While federal trademark protection isn’t currently an option, individual states also maintain registers to protect trademarks. Registering brand trademarks at the state level will begin to establish initial levels of protection. This process is best led by legal consul with experience in domestic cannabis brand protection.
The first step is to research the entire U.S. legal cannabis market to ensure that your proposed brand name is not already in use in any way, shape or form. If another company has begun to lay claim to the brand name with historical precedent, secondary claims for the brand will likely prove futile.
It’s important to establish a consistent, clear usage of the brand across the marketplace. That will create historical precedent that will help cannabis food and beverage companies protect their investment in the brand and their intellectual property.
Another approach to potentially establish federal trademark protection is to seek USPTO protection for ancillary products directly related to the food or beverage cannabis product brand. This could include brand-oriented clothing, reusable grocery bags, and other promotional materials.
“Registering these ancillary products establishes goodwill built up in that name in other categories,” Justin J. Prochnow, shareholder, Greenberg Traurig, LLP, Denver. “Then, when trademarks open up for foods and beverages, you can make the argument that it’s a natural extension of those trademarks.”
It’s important that these ancillary products or any associated marketing or promotional materials not use any wording related to hemp or cannabis to avoid potential red flags during the trademark application process. This ancillary product approach could even extend into non-edible CPGs, such as CBD-infused personal care products that share the same branding as the cannabis-infused medical or recreational foods or beverages. Companies can also seek to register a distinctive design mark or logo connected to the food or beverage product branding.
Remember to avoid making any health or medical claims related to the products, which would raise a red flag from a federal perspective and potentially negate progress made toward brand protection. Brand reputation can factor into challenges related to trademark protection.
It also might make sense to apply for federal trademark with the expectation that USPTO will deny it, suggests Prochnow. “Going through that process helps establish evidence of using the brand for the purposes of common law trademark protection.”
Finally, companies will subsequently need to actively monitor the cannabis product marketplace and protect their brands.
While this patchwork approach toward brand protection isn’t ideal, it establishes a strong track record to hold up as public evidence. Then, as federal opportunities for cannabis brand trademark protection come into effect, cannabis food and beverage companies can take the next step in protecting their business interests.