Rocco E. Cozza • January 21, 2020

The CBD business landscape is vastly changing.  Coined the gold rush of our generation, many people are looking to find a way into the market.  However, a CBD business poses many challenges to the inexperienced and uneducated entrepreneur.  In follow up posts I will get into more detail on some of these areas, but I want to focus on protecting your CBD brand, in particular, trademarking the brand.

In the past, trademark law posed a problem for the CBD business because of the legal definition of marijuana.  However, in late 2018, the legal definition of marijuana changed.  In December of 2018,  hemp and hemp-derived products that contain no more than 0.3% THC on a dry-weight basis were excluded from the legal definition of marijuana.  Following this trend in mid-2019, the United States Patent and Trademark Office (USPTO), issued a trademark application examination guide in line with the revised definition.  The guide provides details for the registration of marks used for goods and services that fall within this new exclusion from the federal definition of marijuana and are otherwise lawful under federal law.

This significant shift has led to cannabis and CDB business owners and counsel crafting new strategies to protect the IP of hemp-derived products and services.  As this industry is growing at a rapid pace, this is a must for any entrepreneur or business owner in the CBD space.  Before we get to the specifics of the new USPTO guidance for registering cannabis-related marks, let’s briefly discuss the regulation of Cannabis under Federal Law

CBD Business:  Cannabis Regulation Under Federal Law

First, many people get confused as to what CBD is compared to cannabis.  Let’s break that down.  The Cannabis Sativa plant is compromised of both Cannabidiol (CBD) and THC (tetrahydrocannabinol). CBD is non-psychoactive; THC is psychoactive. CBD can be extracted from hemp plants or cannabis plants, both of which fall under the scientific definition of Cannabis Sativa.

Prior to December 2018, Federal law did not distinguish CBD from illegal cannabis.  The Controlled Substances Act,  21 U.S.C.S. § 801 et seq. , prohibits manufacturing, distributing, dispensing, or possessing certain controlled substances, including marijuana, which also included all goods that contained CBD or THC derived from Cannabis Sativa.  The definition of marijuana changed with the Agriculture Improvement Act of 2018 to exclude hemp and hemp-derived products that contain no more than 0.3% THC on a dry-weight basis.  This change in effect lifted the federal ban on CBD derived from hemp.  Word of caution, however:  not all CBD-containing or hemp-derived products are necessarily lawful under federal law.

As a CBD business owner, you must also be aware of the Federal Food Drug and Cosmetic Act (FDCA) that regulates the use in foods or dietary supplements.   Further, the Agriculture Improvement Act requires hemp to be produced under license or authorization by a state, territory or tribal government in accordance with a plan approved by the U.S. Department of Agriculture for the commercial production of hemp.

Now that we have some of the basics on Federal laws surrounding the Cannabis and CBD industries, let’s talk trademarks.

The requirement for Federal Trademark Registration – “Lawful Use in Commerce”

Everything has a catch, right?  Even registering a trademark for a CBD related product or service has one.  All trademarks to be registered must be for a product or service “lawfully used in commerce.”  But what exactly does that mean?  We first need to understand the definition of “commerce.

The Lanham Act (also known as the Trademark Act) defines “commerce”  as “all commerce which may lawfully be regulated by Congress” .  Congress happens to be a key word in the definition. Simply put, use in commerce only creates trademark rights when the use is lawful under federal law, which is regulated by Congress.

This has created a problem in the Cannabis industry when it comes to protecting intellectual property.  Despite a Cannabis business selling goods or services lawful under state law, if such goods or services are not lawful under federal law, the “lawful use in commerce” definition cannot be met.  Now there are a variety of strategies that can be employed to protect IP, such as using ancillary goods and services that are lawful under Federal law to register the marks or filing “intent to use” applications, which gives a 36-month window to make use of the mark in commerce.

Steps to take under the new USPTO Guide

First and foremost, if you filed an application before December 20, 2018, you have the option to amend your application to comply with the new examination guide and request a new filing date of December 20, 2018.  You can also just file a new application.  Despite which way you decide to go, there is one very important thing you must understand.  Your identification of goods or services must specify that the CBD or hemp products for which you are seeking protection contain less than 0.3% THC.  This is an ABSOLUTE MUST.

The USPTO will still refuse to register marks for the following:

  • Foods, beverages, dietary supplements, or pet treats containing Hemp-derived CBD because such products have not yet been approved by the FDA.
  • The commercial production of hemp unless it has been licensed or authorized by a state, territory or tribal government in accordance with a plan approved by the U.S. Department of Agriculture, which has not yet issued such regulations.

As the industry is changing, we are beginning to see the stigma lifting and lawmakers understanding the benefits to CBD and Hemp-derived products.  The new guidance from the USPTO gives CBD business owners hope in protecting the fruits of their labor and the brands they are building.  Please understand that this discussion is just the tip of the iceberg.   There are many different strategies that can be used to protect intellectual property even if federal trademark registration is not a possibility.  If you would like to discuss any of these strategies in more detail, just reach out to our firm by clicking here.

Cozza Law Group Business Law Blog

By Rocco Cozza August 22, 2026
The enforceability of restrictive covenants and non-compete agreements depends on various factors, including how and when the employee/contractor initially signed the document. A company or employer may find it easier to enforce these agreements if they work with business law attorneys in Pittsburgh during the initial drafting and signing processes. If a company can steer clear of common mistakes from the very beginning, it can protect its competitiveness and avoid issues caused by former employees/contractors. Pennsylvania Only Enforces Non-Compete Agreements That Meet Five Requirements While Pennsylvania does not have a clear statute governing non-compete agreements, past cases have established a three-part test for their enforceability. First, a non-compete agreement must clearly define a timeframe in order to be enforceable. In other words, it must have an expiry date. You cannot stop an employee or contractor from competing indefinitely. Case law also suggests that non-compete agreements with the strongest enforceability are only valid for a few years (and not decades). A Pennsylvania court is also likely to reject a non-compete agreement with an ill-defined scope. In other words, the contract must describe exactly what the employee or contractor is prohibited from doing. The scope must also be reasonable, meaning you can only prevent employees from joining clear competitors. If a company is only distantly related to your industry or field, a non-compete probably can’t prevent your former employee from joining that organization. Scope also encompasses the type of company information that the employee uses to compete in the future. You cannot stop a former employee from using their own inherent skills and knowledge to set up a competing business. The only way you can legitimately curb competition from a former employee is by limiting the way they use your company’s “confidential information.” You might be surprised to learn that your former employees have every right to use company information that you consider to be confidential. As long as that information is publicly available, your employees can use it freely. This includes price lists, your suppliers' contact information, and general business practices well-known in your industry. One example of “confidential information” in this context is a list of your customers, complete with their email addresses and telephone numbers. Although this information might be publicly available, a normal person would not be able to recreate the finished list without spending years building a business (as you have). Intellectual property is another example of protected, confidential business information. If you have gone through the trouble of obtaining a patent or a copyright, your employee has no right to steal this information and use it to set up a competing business. The same logic applies to “trade secrets,” which may include confidential formulas or recipes. That said, it is important to remember that these violations are governed by intellectual property law, and not necessarily non-compete agreements. Non-compete agreements in Pennsylvania must also clearly define their geographical “reach.” You can only prevent an employee from competing with you in your geographical area, such as the City of Pittsburgh or Allegheny County. Even if your employee signs a non-compete agreement, they could theoretically travel to another state or country before starting a competing business. Finally, companies in Pennsylvania generally need to offer employees or contractors something in return for signing non-compete agreements. If the penalties for violating the agreement represent the “stick,” then the reward represents the “carrot.” In business law, this reward is called “consideration.” A common type of consideration is a job offer. With the job offer on the table, there is a clear reward for signing the non-compete agreement. On the other hand, the potential employee could always walk away from the job offer without excessive penalties. Another type of consideration is career advancement. This might be a raise or a promotion. An employee may decide to sign a non-compete agreement in order to access these career benefits. If they reject the offer, they would presumably keep their current position in the company without any other consequences. Pennsylvania courts may deem unenforceable a non-compete agreement that lacks these promised rewards. In the eyes of the court, an employee faces a difficult situation if they could lose their job by not signing a non-compete agreement. As with all contracts, duress or undue influence can make non-compete agreements unenforceable. Penalties Help Enforce Valid Non-Compete Agreements Assuming a non-compete agreement is valid, what exactly stops an employee from violating it? Without effective penalties, a non-compete agreement is useless. You can enforce your non-compete agreements with “injunctions.” These are court orders that require your former employee or contractor to immediately stop working for the competing business. If they have set up their own business, a court order could force them to shut down operations. Penalties may also include damages. The court can order the competing employee or contractor to pay compensation for your losses. For example, an employee might have stolen all of your customers by offering the same services for a lower price. In this situation, you could recover all of the profit you would have earned if those customers had remained loyal. Negotiation Is Often the First Step of Enforcement While taking your former employee or contractor to court can lead to positive results, most parties attempt to resolve their disputes through negotiation first. Indeed, mandatory “arbitration clauses” are often built into non-compete agreements. A business law attorney can represent your best interests during these negotiations, ensuring positive outcomes without an expensive, time-consuming trial. Can a Business Law Attorney in Pittsburgh Help Me? A b usiness law attorney in Pittsburgh may be able to help if you are serious about making your restrictive covenants and non-compete agreements as enforceable as possible. Legal assistance with drafting and negotiating these agreements from the outset may improve their enforceability if a dispute arises later. That said, lawyers can also help resolve disputes over restrictive covenants signed long in the past. To explore this topic further, consider contacting Cozza Law Group, PLLC at (412) 790-2789. You can also find us online .
By Rocco Cozza June 8, 2026
Shareholders set corporations apart from other types of businesses, and they often help companies achieve considerable levels of success. On the other hand, executives and directors often forget that each shareholder is a part owner. With so many owners, it is easy to see how complex shareholder disputes can become. The first step is to understand why and how these shareholder disputes arise. The second step is to resolve the dispute, potentially with guidance from an experienced business litigation attorney in Pennsylvania . Shareholder Disputes Arise Because of Shareholder Rights To understand shareholder disputes, you first have to understand shareholder rights. Common shareholders have voting privileges, which means they can control the trajectory of the company. Although some shareholders never bother to vote, others take these rights very seriously. The more shares you have, the more power you have to control major decisions. Shareholders also have the right to profit from the success of a company. Because of this, they have a financial incentive to oversee the company’s trajectory. If the company leadership starts to make mistakes or intentionally act against the interests of the shareholders, disputes naturally arise. Finally, shareholders rely on the accuracy of records and corporate books to make their investment decisions. For example, they might choose to sell or hold their stocks depending on the published earnings of a company. If these records are inaccurate or intentionally altered, the shareholders may make poor investment choices as a result. Now that you understand shareholder rights, it is easy to see how shareholder disputes might arise. Shareholders might sue if they feel that the company is making major decisions without bothering to hold votes. They might also sue if they feel that the leadership is acting against their best interests. Another type of lawsuit might involve shareholders suing a company for inflating their earnings and releasing inaccurate data. Shareholder Disputes Often Begin With Alternative Dispute Resolution Most lawsuits, including shareholder disputes, go through a process of alternative dispute resolution (ADR) before parties actually proceed to the courtroom. ADR may involve mediation or arbitration, and it takes the form of private negotiations. The shareholders may select legal counsel to negotiate on their behalf, as it would be impractical for thousands of individuals to sit at the negotiation table. In other situations, an individual shareholder might file a lawsuit on their own. In this situation, that individual might be present at the negotiation table alongside their legal counsel. ADR often serves everyone’s best interests, helping to resolve disputes without resorting to expensive and time-consuming litigation. Public trials are not good for business, and shareholders might be just as willing to resolve these issues in private as the executive suite. Arbitration clauses are often “built in” to the corporate bylaws or charter. In other words, parties may have no choice but to attempt mediation/arbitration before proceeding to a trial. That said, parties are under no obligation to successfully complete the arbitration process. One party could refuse to negotiate, and a trial would subsequently become inevitable. What are Some Common Types of Shareholder Disputes? Shareholder disputes may take various forms. All of these lawsuits fall into four main categories, however. An individual shareholder might file a direct lawsuit against the company. Another type of lawsuit might be a “derivative suit,” which involves the shareholders suing on behalf of the corporation. This type of lawsuit often targets a specific bad actor within the company, such as a self-dealing CEO. Class actions are also relatively common. In this type of lawsuit, numerous shareholders join forces to file a single lawsuit against the corporation, often under federal securities law. Finally, a dispute might take the form of an “appraisal proceeding,” which focuses on whether the company has received a fair valuation before a merger. How Does Pennsylvania Law Affect Shareholder Disputes? Pennsylvania law is quite deferential to the board of directors, granting it considerable control and authority. A common source of conflict in a corporation is the contrast between the “democracy” of the shareholders and the authority of the board of directors. Pennsylvania tilts the scales in favor of the board. First, Pennsylvania requires a shareholder to make a written demand to the board before they can file a derivative lawsuit. The board can then appoint a “Special Litigation Committee” to investigate the shareholders' claims and demands. If the committee determines that a lawsuit would go against the best interests of the company, courts in Pennsylvania may not allow it to continue. It is difficult to circumvent these requirements for derivative lawsuits in the Keystone State because of strict limits on direct lawsuits. Finally, Pennsylvania has no rule that states a board must place its shareholders’ interests above those of other relevant parties. These parties might include employees, customers, suppliers, and even the greater community or environment. This is not the same in other jurisdictions, making the Keystone State a “board-friendly” state that repels takeovers. In fact, it is considered by many to be the most management-friendly state in the country and one of the toughest places for shareholder plaintiffs to sue. While this is good news for boards facing shareholder lawsuits, the Keystone State’s protections are not infinite. Effective legal representation is necessary to take advantage of the jurisdiction’s legal safeguards. On the other hand, plaintiff shareholders can still achieve success in Pennsylvania, but they may need to rely on innovative, experienced business litigation lawyers in the face of strong regulatory barriers. Contact Cozza Law Group PLLC to Learn More About Shareholder Disputes While online research can provide plenty of insights into shareholder disputes, each case is slightly different. Given the varied nature of shareholder disputes, it may help to discuss your specific circumstances with a business litigation attorney in Pennsylvania . Cozza Law Group PLLC serves enterprises of all sizes, offering a fractional counsel model that provides legal guidance that fits your company’s unique needs. Continue this dialogue by contacting us at 412-453-8673 or visiting us online .