The 2018 farm bill legalized industrial hemp, which is a nonpsychoactive version of cannabis, and its derivatives for cultivation and sale. The law stipulated that, as long as individuals had official approval from their states or tribes, they could cultivate hemp and sell it for use in everything from textiles and clothing to concentrates. Thanks to the federal status of hemp and cannabis, businesses in the space cannot trademark their products — but this may soon change.
A CBD company that recently fell afoul of this regulation is now appealing, and if the company wins, the ruling could have implications across industries dependent on soon-to-be legal products such as cannabis and psychedelics. Joy Tea, a company that markets hemp-derived tea, had tried to secure a trademark with the U.S. Patent and Trademark Office (“USPTO”) only to be denied. According to USPTO, the lawfulness of goods isn’t determined by what the law at the federal level may be months or years from now but at the time of the application.
So, even if a company anticipates that CBD beverages or any other product will be legalized in the future, the application will not be registrable. Even though Congress had already legalized CBD via the farm bill in 2018, the USPTO denied Joy Tea’s application because the U.S. Food and Drug Administration (“FDA”) still doesn’t allow marketing cannabinoids in dietary supplements or food items.
Joy Tea’s attorney Larry Sandell argues that it was improper for the federal agency to deny Joy Tea a trademark registration. Sandell, who is an intellectual property attorney at Mei & Mark LLP, says trademarks are meant to protect a company’s ideas as the company prepares itself for the market. For instance, companies in the pharmaceutical space can obtain trademark registration for a formulation to protect it from theft while they are still working on the product.
Countering that argument, the USPTO said that while this is true, the comparison is misleading as pharmaceuticals are not unlawful, per se. Since Joy Tea’s CBD-based beverages do not have FDA approval, the USPTO says that the beverages are not only unapproved but unlawful. Thus, Joy Tea is seeking an appeal against the ruling, and if it is successful, the effects will reverberate far and wide.
If Joy Tea succeeds, companies will be able to trademark products that currently aren’t legal at the federal level, making these spaces a lot more desirable for startups and established businesses. If the company loses its case, businesses in cannabis, psychedelics and other such industries will be stuck in a “terrible spot,” Sandell says.
The outcome of this appeal may have far-reaching consequences in the cannabis sector, and it remains to be seen how a successful appeal may spur innovation at firms such as RYAH Group Inc. (CSE: RYAH), which already has a sizeable portfolio of innovative products.
NOTE TO INVESTORS: The latest news and updates relating to RYAH Group Inc. (CSE: RYAH) are available in the company’s newsroom at https://cnw.fm/RYAH
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