CBD, Amazon Distribution Channel And Trademarks: What You Need To Know

This article was originally published on Hoban Law Group, and appears here with permission.

Amazon.com AMZN is the largest on-line retailer in the United States and has overcome numerous obstacles to arrive in this position. This author has worked with enforcement of IP rights including trademark on platforms including eBay and Amazon since the 1990’s.

In the early days, trademark owners selling products at Amazon could use their trademarks to eliminate knock-off sales.  Amazon created a system of regulations for itself and various procedures for limiting the sales of knock-offs on its platform.  Now Amazon seems to be requiring various vendors of CBD products to hold a registered trademark.

The benefits to Amazon of this new requirement are multi-fold.  By requiring a registration, the issue of knock-offs is reduced before it happens.

Another benefit is that the US Trademark Office, which does not register trademarks for illegal products, is now Amazon’s first-tier policing mechanism for regulatory compliance.  Amazon’s regulatory compliance burden is now minimized by the combination of its new policies regarding trademarks for CBD products and a stricter policing policy against CBD trademarks of the US Trademark Office.

The Trademark Office Refuses Registration of CBD Products

The challenge for CBD vendors is that while the farm bill is in full force, CBD is technically illegal under many circumstances.  The FDA has determined that CBD isolate is technically a drug in many ingestible forms, and its regulations prohibit selling “drugs”.  The Trademark Office now refuses registration of CBD products.

CBD is Different Than Hemp Extract Containing CBD

CBD is, however, different than hemp extract containing CBD.  Since hemp extracts are not consistent it is not being used as a drug in the pharmaceutical world.  CBD isolate, which is very consistent, is being used as an ingestible drug.  Some legal experts will say that there is a “grey area” surrounding the sales of hemp extract containing CBD.  The US Trademark Office has registered trademarks in the past for hemp extract products, but is not always consistent.  It has also refused registration, and this is quite common.

Solutions:  Many sell topicals including CBD or hemp extract, and obtain trademark registration for their name.  The name can be used later for a broader swath of products.  Others can license a trademark that is already registered from a third party and control the distribution of the third party branded CBD products.  Both are viable ways of developing and owning rights to a registered trademark.

Questions about this subject matter can be directed to Kevin@hoban.law.

Read the original Article on Hoban Law Group

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