Thursday, May 19, 2022
Michael Schuster (University of Georgia), Cannabis Derivatives and Trademark Registration: The Case of Delta-8-THC, Ind. L. J. (Forthcoming):
The legal environment surrounding the cannabis industry is ambiguous and constantly changing. While the drug is prohibited under federal law, a 2018 statute legalized a variant of the cannabis plant (“hemp”) that is low in its most common intoxicating agents. Recognizing this, entrepreneurs began to process hemp to extract and sell chemicals contained therein. Included in this trend is the extraction of Delta-8 Tetrahydrocannabinol (“Δ8-THC”)—a psychoactive drug with an increasing market presence in states where most cannabis (e.g., “marijuana”) is illegal.
As competition in the Δ8-THC field emerged, firms sought to distinguish their wares through brand recognition and federal trademark registration. However, the U.S. Patent and Trademark Office (the “USPTO”) refuses to register these marks—arguing that Δ8-THC does not satisfy the requirement that products be used “in legal commerce.” On this point, the USPTO interprets relevant law as criminalizing the sale of Δ8-THC. That conclusion stands in contrast to determinations reached by the Drug Enforcement Agency and federal courts.
This article addresses the propriety of federal registration of Δ8-THC trademarks. It critically analyzes the intersection of federal drug law, hemp’s legalization, and administrative regulations to answer the question. Based on this research, a strong case for the registration of Δ8-THC marks arises. This conclusion has public and private importance.
To seek registration of a Δ8-THC mark, applicants must aver that they use it in commerce. This could amount to admitting to the sale of an illegal drug—depending on the interpretation of somewhat ambiguous regulations. With this in mind, a law and strategy analysis is employed to explain why firms take that risk to seek trademark registration. On this issue, the article identifies specific current market advantages and future strategic gains that warrant this exposure.
Further, public benefits of Δ8-TM registration are explored. A current concern in this largely unregulated market is the presence of harmful impurities in goods sold for human consumption. This issue can be mitigated by aligning the public interest in safe products with private financial incentives. Specifically, the ability to maintain strong trademark rights encourages the creation of goodwill through the sale of quality products. Recognizing this, firms are encouraged to reduce impurities in their Δ8-THC wares under the belief that this will benefit their reputation and thus increase sales.