Page 10 - BusinessWest August 17, 2020

An Uphill Battle
Strategies for Protecting Trademarks Used on CBD Products
By Mary Bonzagni
Federal trademark registration is viewed as an attractive form of property-rights pro- tection for most industries. The benefits
of such a registration are numerous.
A federal trademark registration serves to
recast what would normally be localized com- mon-law trademark rights into nationwide trade- mark rights. It provides the owner with the right to use the ® designation, to enforce the owner’s rights in federal court, and to file the trademark registration with U.S. Customs to block infring- ing imports. A federal registration also provides
a basis for registering the trademark in foreign countries and jurisdictions.
Unfortunately, members of the cannabis industry have faced an uphill battle when trying to protect their brands on the federal level.
This article will focus on strategies for protect- ing trademarks used on CBD products, which may be grouped into two categories: marijuana- derived CBD products and hemp-derived CBD products.
Marijuana is still treated as a controlled sub- stance and is illegal under the Controlled Sub- stances Act (CSA), regardless of its legality under certain state laws. As such, trademarks for mari- juana-derived CBD products cannot be federally registered. The U.S. Patent and Trademark Office
(USPTO) has issued trademarks for goods and services that are indirectly related to marijuana, but the closer the description of goods and ser- vices is to the sale or distribution of marijuana, the less likely it is that the UPSTO
will allow the application.
Hemp was previously regulated
as an illegal substance under the CSA. It was removed as an illegal substance under the Agricultural Improvement Act of 2018, also known as the Farm Act, which fed- erally legalized hemp and hemp- derived products that contain
no more than 0.3% THC (by dry
weight). The 2018 Farm Act legal-
ized CBD derived from hemp not from marijua- na, so, at least for now, the federal government will view the source of the CBD as decisive in determining its legality under federal law.
To recap, marijuana-derived CBD products are illegal under federal law, and, thus, trade- marks for such products cannot be federally reg- istered. On the other hand, products infused with CBD derived from hemp, which have a low-THC content, are now legal under federal law, and
the trademarks under which they are used are capable of federal registration. Being capable of federal registration, however, does not guarantee
registration.
The U.S. Patent and Trademark Office’s cur-
rent policy is to refuse trademarks for foods, bev- erages, dietary supplements, and pet treats con-
“Unfortunately, members of the cannabis industry have faced an uphill battle when trying to protect their brands on the federal level.”
taining hemp-derived CBD that have not been approved by the Food and Drug Administration (FDA). These goods raise lawful-use issues under the Federal Food Drug and Cosmetic Act (FDCA). Trademarks for the following goods, however, can be federally registered:
• Hemp-derived CBD products that are not consumed (e.g. salves, ointments, and skin oils) which contain less than 0.3% THC on a dry- weight basis; and
• ‘Generally rec- ognized as safe’ (GRAS) products
Trademarks
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total up to $250,000, $100,000 of which will be offered in the form of 0% inter- est debt financing, with $150,000 worth of initial cannabis inventory to be offered on consignment, provid- ing a boost of capital to help get the operation off the ground. Theory will also connect the successful applicant with professional services like banking, legal, insurance, and HR.
“This is something we felt really strongly about,” Winstanley said. “We felt it’s the future of the industry, to make sure everyone has an opportu- nity to get into it.”
Cannabis
Continued on page 59
Cannabis
Continued from page 9
A Social Contract
Winstanley said Theory’s experience setting up shop in Chicopee went as smoothly as it could have, considering the built-in rigor of the process, espe- cially at the state level.
“We’ve always known there were a lot of policies in place at the state level and the local level. It’s a long process,” he told BusinessWest. “But we want to make sure we get it right and operate
in ways that are beneficial to the local population, and we want to make sure to set an example for what legal canna- bis should look like in this day and age.”
One way Theory — which also has locations in Great Barrington and Bridgewater, and employs about 200 people in its cultivation, manufactur- ing, and retail divisions — does that is through the kind of social-equity program the CCC made a point of emphasizing.
It recently accepted applications from ‘economic-empowerment’ appli- cants as designated by the commission and will select a qualified applicant to partner with, guiding and mentoring the entrepreneur through the process of opening their doors, from financial assistance to professional services to zoning and regulatory hurdles.
That financial commitment will
“
just really happy to see cannabis is back, and hopefully we can continue to contribute, and the industry will provide some much-needed life in these strange times.”
Right now, we’re
Valued relationships. Something we build.
Robert Borawski President
(413) 586-5011 Borawskiinsurance.com
10 AUGUST 17, 2020
FEATURE
BusinessWest