Welcome back to our weekly podcast that Frost Brown Todd produces to share with our listeners all of the goings-on within the hemp and CBD industries. From a legal and regulatory perspective,

I'm Jonathan Miller. I lead Frost Brown Todd's very diverse and deep hemp practice. I also am the member in charge of Frost Brown, Todd's Washington, D.C. firm, and also serve as the general counsel for the U.S. Hemp Roundtable, the industry's national advocacy organization.

From that perch, I've been deeply involved in helping create the legal and regulatory regimes that our law firm advises clients on how to follow.

So it's an interesting way of viewing the industry, both in terms of how the sausage is made, how the bills are put together, but also what it means for hemp farmers, hemp businesses and CBD companies out there.

Today's topic is trademark law and how that applies to hemp. And we've got a leading expert on not just hemp trademark, but intellectual property in general.

Karlyn Schnapp, Karlyn is a member at Frost Brown Todd and has been working on the hemp trademark issues for about five or six years now. Is that right, Karlyn?

Oh, that's about right, Jonathan.

Well, welcome to the podcast and we're excited to talk with you about hemp and intellectual property.

I am, too.

So before we get into the subject of hemp, let's just talk about intellectual property to begin with, because we do have a number of listeners that know the term trademark. It's a very common term out there. But what does it actually mean?

Why why would any company want to go through the process of getting a trademark?

Well, just like the names that we see on our grocery shelves, like Coca-Cola and Nestlé, for example, trademarks create brand recognition. And when you are a startup, especially in the hemp CBD industry, which is getting very thick in startups, trademarking is going to give that startup security of their brand.

So registering a trademark should be one of the top priorities for the startup when they are starting the establishment of their business. And it's going to help protect the business from the get-go.

And it will keep competitors from using their brand or names or logos similar to what they are investing in, because the trademark is actually going to be an asset at, you know, intellectual property, we think of these things as invisible assets, and that's what a trademark is going to be for your startup in business and once this startup has come up with what they want to call their business, their products.

The trademark is for life. It's permanent as long as the business is using it. And their sales, marketing promotion, it is permanent as long as they continue to use it, it's a lifetime investment for them and it will once they register it, they will have some legal protections that federally that they cannot get any other way.

So there are different kinds of trademarks. There's a trademark for a name and for a mark. Can you kind of explained the differences there?

Sure. Trademarks there. We've seen them again in department stores, shelves. Grocery stores over at Target, anything like at Target, you have the word, but you also have that symbol that they've registered. And you can also have phrases, taglines, logos, designs. And all of these can constitute what's called a trademark.

And the marks can be any combination of those or just a single word or just the symbol. And we generally lump everything together as trademarks. But they're specifically there are goods and services.

And so usually the service marks will fall under the umbrella of trademark. But a service mark is going to be just that. It's for services.

And then we ought to have the regular trademark that we know the name for, which is going to be for goods. And when we're looking at trademarks, there are different categories besides just what you see. And it's the classifications of whether we're looking at a generic mark, a descriptive mark, suggestive, fanciful or arbitrary.

And there are some caveats that go with each of those.

So without getting too deep, we also are familiar with the term patent. What's the difference between a trademark and a patent?

Well, I started out as a patent attorney and I still am a patent attorney. And there is a world of difference between patents and trademarks.

The biggest difference. Well, two, the main two differences are the patent is for innovation, science, technology, and it's for new ideas and helps the inventors make commercial use of those ideas.

And it helps them protect those ideas and it gives them the right to exclude others from that innovation. A patent is a limited lifetime grant of exclusivity. It only lasts for 20 years.

And it covers things such as the composition of matter, methods, how to do things business, not business methods. But it does not cover, for instance, hemp CBD doesn't cover naturally occurring substances.

Trademarks, on the other hand, really are concerned with how a technology is used. But a trademark is a source identifier who is selling the product. And the trademarks are designed for consumer protection, not for the inventor or the business's protection. It's a consumer safeguard.

Great. Yep, very helpful. So I'm a business. Let's just talk about any general business. And I want to get a trademark for my for my product company, et cetera.

I know step one is to call Karlyn Schnapp, but what would once I call you what are you going to tell your client that the next necessary steps are going to be and just generally getting a trademark?

For getting the trademark. What we would do generally is want to run at first a preliminary clearance search to make sure that that trademark that they're interested in is actually available for use and federal registration.

And a preliminary clearance search usually will cover just federally applied for and registered trademarks, as well as state trademarks.

And depending on how heavily they want to invest in the market, we may suggest that they want to do a full clearance search as well, which would also cover not only just the state and federal applied for or registered marks, but also looking at more common law uses domain registries. looking at state registries, attorney general business names that are registered within the state, and just doing a quick and also doing Google searches for businesses that may be within the region that are close or similar to what they're looking for and registering for a trademark, because those would have common law rights as well.

And who are you working with on the federal level and is it on the state level as well?

We would work on the federal level for registering the trademark for the largest bundle of rights with the USPTO, the United States Patent and Trademark Office, and they handle the federal registrations for the trademarks.

For the states, it's going to be the state attorney generals, and they're usually is not that big a bundle of rights that come with the state marks. And the state marks generally are only for, only for use within the state for commerce.

The federal marks, you have to have business outside of the state. So those are interstate marks. So we have to have business across state lines for the federal registration.

So the only reason to get a state trademark is if I'm only selling products within the state. Is there any other reason I would want to get to any particular state trademark?

We are jumping ahead, but I will answer that question now, since it is a good one.

What we sometimes will advise is state registration in instances where federal registration may be an issue.

And I'm going to leave it at that for now. OK, I know where you're headed, and I'm not going to let you steal my punch line yet.

Oh, great.

Well, let's talk about when federal legislation is an issue. So let's talk about hemp. But again, I mentioned you've been working on this for five or six years. You were working on this before the 2018 farm bill and now after the 2018 farm bill.

So if you can kind of share what the status was before the farm bill was passed and now what it is today when it comes to hemp.

Sure. Before the farm bill passed, and that was the December 28th, 2018 farm bill that Jonathan's referring to, that bill removed hemp from the definition of marijuana and the Controlled Substances Act, the CSA. So in that in doing so, hemp-based products like CBD that contain less than zero point three percent THC are no longer controlled substances. So prior to that, the USPTO would not would refuse applications on the basis of those goods being unlawful under federal law if the trademark application covered hemp-related goods.

But now, after that farm bill, the passage of that, those registrations can now be considered legal under the Controlled Substances Act. So the USPTO will now consider them. And hemp products are eligible for federal registration at the USPTO and in the USPTO, also distributed on May 2nd of 2019, some additional examination guides for their examiners and those eventually filtered down to the practicing attorneys who are kind of hit broadside by this, because we were not told that these were coming down.

But what happened in the examination guides is that what this expansion that only included hemp based products, that hemp based CBD products or hemp based products and CBD also derived from marijuana, is still unlawful under federal law.

The other thing that is very critical to these guidelines is that the USPTO warned that because CBD used as a food additive, is still under investigation by the FDA, the use of CBD in foods or dietary supplements is still unlawful. And since it's unlawful, anyone seeking a trademark registration for that use, it will be refused.

And to be clear, we as an industry believe that it is lawful and that the Trademark Office's position, which is derived from the Food and Drug Administration's position, is incorrect. But that doesn't help us with USPTO, which is focused on what the FDA says, correct?

Correct. And that is that's a problem with clients, because sometimes they do have a hard time wrapping their head around that and. It's where hopefully at some point in the near future, the USPTO will have some harmonization with other industries and consider that food additives are also lawful uses.

And if you go to any store drugstore, you will see that there are a lot of ingestible uses of CBD based hemp products. And technically, those are unlawful and shouldn't be sold and would be confiscated. But it's become very hard to control. And at this point, one of the controls is lack of federal trademark protection.

Yeah. Now, we've got a situation where the FDA has claimed that it's illegal, but it's not enforcing on it, the only enforcement actions they take or companies that make outrageous medical claims like it's going to cure cancer, cure Covid. But despite their inaction, that has not helped with the U.S. PTOs position. So if I am a hemp CBD manufacturer and I want to get some sort of trademark protection, am I completely out of luck?

You are not out of luck completely.

What I would suggest is that they first look and see if they can find a registration for a topical product, because that's allowed. So if you can have an ointment, a salve, a gel, a cream, something along those lines, we can get registration. The other thing to think about is filing within the state. If you're not going to be moving across state lines or even if you are just trying to get a state registration, because sometimes what you can do is you can look at some of the states that have more liberal laws regarding recreational marijuana use. They may also have more liberal laws for CBD and hemp based CBD uses or even CBD from hemp. And if you're manufacturing something like that within one of those states, we may be able to get state registration for you, for your mark, for ingestible, as well as topical uses.

And you may be saying, well, what good does that do me? But if you remember, the trademarks are going to be consumer protection and it is also a business investment. And once you register those and file a registration within the state, when we run searches to clear a mark of preliminary clearance search, those marks come up. And so it protects your business in another layer of protection that you might not have thought of, because that preliminary clearance search is going to pull up those state registrations and applications. So if you are working within a state that has some more liberal laws and policies, you may want to consider filing within that state. Just to put your mark, no pun intended, mark, on things and have that showing up in registration searches.

So let's say I'm my brand is called Mellow Miller, and I'm not in one of those liberal states. And I'm also I will only sell ingestible products. Are there other strategies I can use to trademark Mellow Miller?

We could try to put something on some goods, but that is going to be hard... a hard road. And that would be one way to layer the protection until you can have some type of product that is, that we can register. You would also have some common law rights that we could protect.

The other thing to think about is. For the goods or for any trademark that you want to consider, not only do we have to be within the constraints of the USPTO for the CBD derived hemp, we still have to consider general trademark law in general.

And that means we have to make sure that whatever you are going to be protecting with that mark, that mark is not going to be descriptive or generic or borderline descriptive or suggestive. So we still have really two bars to overcome for the registration of any type of mark in the CBD hemp space.

So, by the way, Caroline offline, I'd like you to register Mellow Miller for me before this podcast airs, because I'm worried that some of our listeners will take up that fantastic thing that I just came up with right now so I can take care of that for me.

Sure thing.

So. All right. So I'm sure you've given some good advice here. What other advice would you give to your standard hemp CBD manufacturer who is wanting to get some sort of protection to moving forward so that particularly during this gray period where the FDA is causing this trouble?

Sure. The other types of protection is considering it registering as a business with a service mark. So we could do that rather than looking at trying to protect any of the goods that you would be selling. Manufacturing is just protecting the service mark the business.

And eventually, once the tide turns, we can begin layering in additional protection with the trademarks. And I know it's of little consolation, but at this point, everybody's in the same boat right now. Everyone is paddling in the same ocean. And everyone, I think, is equally frustrated at this point with how to file and register and protect some of these marks and. Well, we can be creative, there are only so many things we can do, and at this point, probably one of the easiest things to do is for a lot of these is try to register it as a business and register the mark as a business.

The other thing you can do is go to the U.S. Roundtable's website, hempsupporter.com and send emails to your members of Congress urging them to pass legislation which would make clear that hemp derived CBD ingestible products are legal. It's a H.R. 841 and S 1698. So if if you if you're interested in getting a full trademark over everything, let's get that legislation passed and help us. That's hempsupporter.com.

Thanks so much, Karlyn. Folks are interested in taking these kinds of steps. There's no one better in the business to help you than Karlyn. Her email is kschnapp@fbtlaw.com. Mine, as always, is jmiller@fbtlaw.com. And we appreciate you all listening in. And thank you, Karlyn, for sharing your wisdom with our listeners.

You're welcome. It's been fun.

And thanks for joining us. Stay tuned for the next episode of Hemp, Legally Speaking, Frost Brown Todd's full service guide to hemp laws and regulations from all the different perspectives of the law. Thanks so much.

If you have questions or ideas for Hemp related topics, email us at hemplegallyspeaking@fbtlaw.com.

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