Oregon leads the nation in building a regulated psilocybin industry. As this industry grows and matures, operators must remain mindful of important intersections between regulations and intellectual property.
Background: Oregon Psilocybin Services Act & Finalized Rules
The Oregon Psilocybin Services Act Ballot Measure 109 (M109), otherwise known as the Oregon Psilocybin Services Act (the “OPSA”), established a legal basis for producing and consuming so-called “magic mushrooms” and other psilocybin products in the state. In order to implement the OSPA, the state government established the Oregon Psilocybin Services (“OPS”) agency, which recently finalized rules for regulating psilocybin. These rules (“ORR”) establish a supply chain from spore to consumption, comprised of:
- Manufacturers (who produce whole fungi, homogenized fungi, psilocybin extract, or edible psilocybin product)
- Testing labs (who test mushrooms for potency and perform quality control)
- Service centers (where psilocybin/mushrooms are consumed), and
- Facilitators (who administer psilocybin/mushrooms and watch over a person during their experience.
Importantly for manufacturers, both the OSPA and the ORR contain extensive language regarding product labeling and packaging. These legal requirements unavoidably impact the ability of manufacturers to establish brands and develop the trademark rights in these important business assets.
Psilocybin Label Requirements in Oregon
As discussed in other Rogoway Law blog posts by this firm, Oregon recently became the first U.S. state to establish a regulatory framework for commercial psilocybin activities. The OSPA and OPS rules govern labeling requirements for psilocybin products. Product labels represent one of the most important ways manufacturers distinguish their products for consumers. However, OSPA § 475A.626 and ORR 333-333-2400 add crucial requirements to psilocybin product labels, restricting content and mandating several important elements.
Specifically, in § 475A.626, the OSPA requires that all Psilocybin product labels must communicate:
(A) Health and safety warnings;
(B) If applicable, activation time;
(D) If applicable, serving size and the number of servings included in a psilocybin product; and
(E) Content of the psilocybin product.
Adding much more depth and complexity to labeling requirements, ORR 333-333-2400 articulates labeling and packaging rules in even greater detail. Specifically, the ORR states:
(1) A label required by these rules must:
(a) Be printed or attached to client packaging containing psilocybin products.
(b) Contain all required information in a legible font at least eight points large.
(c) Be in English, though it may also be in other languages.
(d) Be unobstructed and clearly visible.
(2) A label may not:
(a) Display any untruthful or misleading statements including, but not limited to, a health claim that is not supported by the totality of publicly available scientific evidence (including evidence from well-designed studies conducted in a manner that is consistent with generally recognized scientific procedures and principles), and for which there is significant scientific agreement, among experts qualified by scientific training and experience to evaluate such claims; or
(b) Be attractive to minors, as that is defined in OAR 333-333-1010.
(3) Required Information. Client packaging must display:
(a) The manufacturer’s business or trade name and license number.
(b) One of the following product type names: whole fungi, homogenized fungi, psilocybin extract, or edible psilocybin product.
(c) The net quantity of contents using the metric system of measurement and expressed in terms of fluid measure if the item is liquid, or in terms of weight if the item is solid, semi-solid, or viscous.
(d) The quantity of psilocybin analyte contained in the product, expressed in milligrams, and calculated using laboratory test results required by OAR 333-333-7040.
(e) A unique identification number as defined in OAR 333-333-1010.
(f) The “best by” date indicating the time that the manufacturer has determined that their product will retain its original quality.
Compliance with these regulations requires careful attention to detail in order to seamlessly meld the requisite legal elements with branding, on the crucial consumer-facing product component – the psilocybin manufacturer’s product label(s). If done effectively, even a highly regulated label can distinguish a manufacturer’s products in the eyes of consumers and compellingly identify the source of goods.
Importance of Trademarks for Psilocybin Brands
As with any new industry, such as psychedelics, many factors, including product strength, brand distinctiveness, customer loyalty, and rights to exclusive use of trademarks, can determine winners and losers. This will certainly hold true for psilocybin manufacturers in Oregon. Those who wish to succeed in the growing and increasingly competitive Oregon market will need to focus on developing brand protection strategies. A strong trademark strategy can identify the source of goods, provide legal protections for a brand, and help to guard against counterfeiting and fraud. Promptly filing trademark applications, for certain types of goods and services, can represent one of the most important brand protection tools for psilocybin companies. Early trademark filers benefit from a less crowded register, offering greater chances of securing a registration for a compelling brand name.
Challenges In Obtaining Psilocybin Trademarks
The federal status of psilocybin presents one threshold challenge for manufacturers seeking to implement a trademark registration strategy. The United States Patent and Trademark Office (“USPTO”), the federal agency tasked with registering trademarks, takes the position that psilocybin trademarks for “trafficking” activities are ineligible for federal registration. This is because use of a trademark in commerce must be lawful under federal law to be the basis for federal registration under the U.S. Trademark Act. See generally Trademark Manual of Examining Procedure (TMEP) §907. The USPTO refuses to register marks for goods and/or services that show a clear violation of federal law, regardless of the legality of the activities under state law.
Psilocybin is currently classified as a Schedule I controlled substance. The Controlled Substances Act (“CSA”) makes it unlawful to: manufacture, distribute, dispense, or possess a controlled substance; and sell, offer for sale, or use any facility of interstate commerce to transport drug paraphernalia. See 21 U.S.C. §§801-971. This means the USPTO will likely refuse to register trademarks that facilitate the manufacturing, distribution, sale, and consumption of psilocybin. This, unfortunately, means that Oregon psilocybin manufacturers will not be able to register trademarks identifying their core products – whole fungi, homogenized fungi, psilocybin extracts, and edible psilocybin products.
However, other categories of trademark rights remain available for psilocybin manufacturers in Oregon. For example, while the trademark cannot identify the psilocybin products themselves, manufacturers can nonetheless register trademarks in ancillary goods and services, such as apparel featuring branding. Other trademark protection strategies, such as obtaining state-level registrations and developing common law rights may prove helpful for Oregon psilocybin manufacturers as well.
The regulatory and IP experts at Rogoway Law have extensive experience helping clients in highly regulated industries navigate challenging issues related to product labeling and branding. Please reach out if we can be of assistance.