Business, Legislative, and Intellectual Property Developments Position Hemp as a Viable Advanced Material

Thursday, September 19, 2019

It seems hard to believe that it’s only been five years since Colorado became the first state in the nation to legalize recreational use of marijuana. Since that time, a veritable tidal wave of change has swept across the country, with most states moving to legalize medical and, in some cases, recreational use of marijuana.

Even more universal has been the legalization of hemp. Hemp and marijuana both derive from the same plant species, Cannabis sativa, but marijuana contains higher levels of THC. Broadly speaking, state and federal laws classify Cannabis sativa containing not more than 0.3% THC as hemp. Forty-seven states have now legalized hemp.

Hemp legalization across most states followed the U.S. Congress’ enactment of the 2018 Farm Bill, signed into law in late 2018, which decoupled “hemp” from the federal Controlled Substance Act’s (CSA) definition of “marihuana.” Congress’ action to decriminalize hemp opened the door for the United States Patent and Trademark Office (USPTO) to clarify its position with respect to trademarks for domestic industrial hemp products.

In May of 2019, the USPTO issued Examination Guide 1-19: “Examination of Marks for Cannabis and Cannabis-Related Goods and Services After Enactment of the 2018 Farm Bill.”

The USPTO began by explaining that: “Use of a mark in commerce must be lawful under federal law to be the basis for federal registration under the U.S. Trademark Act.” In other words, even if goods or services are legal under state law, they are not eligible for trademark protection under federal law if they are considered illegal under federal law, a limitation known as the “lawful use” rule.

Notably, the USPTO made clear that hemp’s removal from the CSA doesn’t guarantee that a cannabis or hemp-related mark will be appropriate for trademark registration. It noted that in addition to the CSA, the Federal Food Drug and Cosmetic Act and the Agricultural Improvement Act must also be considered when determining the legality of a good or service, and, thus, a related mark’s eligibility for trademark registration. The Food and Drug Administration has not yet clarified which hemp-derived products created for human consumption will be allowed.

Accordingly, the USPTO summed up its clarification as follows: “For applications filed on or after December 20, 2018 that identify goods encompassing cannabis or CBD, the 2018 Farm Bill potentially removes the CSA as a ground for refusal of registration, but only if the goods are derived from ‘hemp.’ Cannabis and CBD derived from marijuana (i.e., Cannabis sativa L. with more than 0.3% THC on a dry-weight basis) still violate federal law, and applications encompassing such goods will be refused registration regardless of the filing date.”

Advanced Materials Implications

According to Encyclopedia Britannica, hemp was first cultivated in China for use in creating fibers around 2,800 B.C. While hemp may be more aptly described as an “ancient” material rather than an “advanced” material, the recent push to legalize hemp in the United States has led businesses to start using hemp in innovative ways. The possibility of trademark protection on the federal level and state incentives for hemp production (now that it is legal) have also fueled renewed interest in the material.

  • There are a number of companies that are utilizing hemp in the development of new building materials, including hempcrete, a green alternative to fiberglass insulation, as well as in the production of various wood alternatives.
  • Hemp is being used in the creation of new plant-based, biodegradable bioplastics.
  • Hemp is being used to develop many consumer products as well. According to CNBC.com, more than 25,000 products, including apparel, foods, skin products and dietary supplements are made of hemp.

The 2018 Farm Bill’s removal of hemp from the Controlled Substance Act, the USPTO’s clarification regarding hemp trademark registration, and the widespread legalization of hemp production in states have combined to spur massive interest in not only hemp’s potential as an advanced material, but also the possibility of gaining intellectual property protection at the federal level for such materials. To mix metaphors, right now it’s a bit of a wild-west land grab going on as businesses attempt to sort out new hemp-related business opportunities in the complex legal and regulatory landscape, while determining whether trademark and, in some cases, patent protection is available.