TRADEMARK TRIAL AND APPEAL BOARD (TTAB) CONTEMPLATES CBD TRADEMARKS
The extent to which Cannabis-based products are legal in the United States is unfortunately a function of a complicated assortment of laws, interpreted differently and idiosyncratically by different government bodies. While pure THC products are undoubtedly still illegal under the Control Substance Act, Hemp, and a key derivative, Cannabidiol (CBD), is tentatively legal under the Farm Bill, although with a series of caveats. Recall, CBD, which is not responsible for the “High” normally associated with THC, is purported to have a variety of still undiscovered benefits and is presently being explored and scientifically validated. Thus, under the FDA’s present interpretation of the Food, Drug, and Cosmetics Act (FDCA), food products containing CBD are still illegitimate.
How is any of this relevant for brand owners and prospective trademark applicants? Well, the United States Patent and Trademark Office (USPTO) has to determine in what way it can balance the competing interests of providing trademark protection to worthy brand-holders under traditional trademark jurisprudence while not stepping on the toes of other federal agencies.
In the seminal case of, In re Stanley Brothers Social Enterprises LLC, the Trademark Trial and Appeal Board (TTAB) delivered a truly consequential and indeed precedential decision for how the Office will treat CBD-infused products vis-à-vis trademarks.
THE LEGAL STATUS OF MARIJUANA, HEMP, AND CBD
CSA: The Controlled Substance Act designates Marijuana as a substance that falls squarely under its Schedule I Classification, thus rendering the manufacturing, distribution, and/or distribution, of marijuana illegal. 21 U.S.C. § 841(a)(1). What qualifies as “Marijuana”? THC? CBD? Some percentage-based combination of the two cannabinoids? “Marijuana” as defined in the CSA consists of:
all parts of the plant Cannabis sativa L., whether growing or not; the seeds thereof; the resin extracted from any part of such plant; and every compound, manufacture, salt, derivative, mixture, or preparation of such plant, its seeds or resin. 21 U.S.C. § 802(16)(A).
Thus, under a narrow and literal reading of this CSA provision, Hemp/CBD should certainly be disqualified and illegal.
HEMP BILL: Complicating the otherwise straightforward reading of the CSA is the 2014 Hemp Bill – and subsequently amended 2018 Farm Bill – which, under a limited set of circumstances, carved out an exception from the strict reading of the CSA for “industrial hemp”. In relevant part, the term “hemp” means, “the plant Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis.” 7 U.S.C. § 1639o (the “Industrial Hemp Provision”).
So, what this means in layman’s terms, is that if a given product has a THC concentration of not more than 0.3 percent, it falls under the Industrial Hemp Provision and is thus not barred under the Controlled Substance Act.
FDA: Lastly, it is important to understand how the FDA fits into this larger legal narrative. The FDCA prohibits, “[t]he introduction or delivery for introduction into interstate commerce of any food to which has been added … a drug or biological product for which substantial clinical investigations have been instituted and for which the existence of such investigations has been made public ….” 21 U.S.C. § 331(ll).”
So, even if hemp is still otherwise permissible under the CSA by virtue of the Hemp Bill carve out, Food products, containing hemp extracts are still impermissible because of FDA restrictions.
THE FUNDAMENTALS OF THE CBD TRADEMARK CASE
Stanley Brothers Social Enterprises, LLC cultivates and produces products containing or derived from cannabis, including a hemp oil extract that contains significant levels of cannabidiol (CBD). Stanley Brothers markets their hemp oil as a dietary supplement and general wellness product. In their initial 2015 trademark application, Stanley Brothers sought registration for the mark “CW”, for, “hemp oil extracts sold as an integral component of dietary and nutritional supplements” in CL 005.
The examining attorney who reviewed the application refused Stanley Brothers’ request on the grounds that the admittance of the trademark would necessarily contravene the Trademark Act, because the Trademark Act prohibits the registration of marks for illegal products.
“[U]se of a mark in connection with unlawful shipments in interstate commerce is not use of a mark in commerce which the Patent [and Trademark] Office may recognize.” Coahama Chem. Co., Inc. v. Smith, 113 USPQ 413, 418” Accordingly, “[w]e have consistently held that, to qualify for a federal … registration, the use of a mark in commerce must be ‘lawful.’” PharmaCann, 123 USPQ2d at 1123
CBD is still undergoing clinical investigations to determine its efficacy and potential hazards. However, the FDCA prohibits, “[t]he introduction or delivery for introduction into interstate commerce of any food to which has been added … a drug or biological product for which substantial clinical investigations have been instituted and for which the existence of such investigations has been made public ….” 21 U.S.C. § 331(ll). CBD falls squarely under this definition.
Because CBD is currently undergoing public clinical investigation and isn’t yet FDA approved, introducing the Stanley Brothers’ hemp product into interstate commerce would be in violation of the FDCA. The examining attorney finally concluded that the hemp oil was “per se unlawful” under the Food, Drug, and Cosmetics Act (FDCA) and therefore, the USPTO simply could not advance the application.
Stanley Brothers appealed the decision on three grounds, all challenging the trademark examining attorney’s broader thesis that their goods are illegal under Federal law (both the FDCA and CSA). In their appeal to the Trademark Trial and Appeal Board, Stanley Brothers argued that:
Applicant’s Argument: The Industrial Hemp Provision of the 2014 and 2018 Farm Bills excludes industrial hemp from sections of the FDCA. It allows the cultivation of hemp for certain industrial purposes.
TTAB Response: The TTAB rejected this argument because they believed Stanley Brothers’ ability to legally cultivate cannabis for industrial purposes was not relevant and the Farm Bill’s exemptions do not permit the distribution or sale of CBD in food, when CBD is still subject to clinical investigation. The TTAB held that the FDCA’s prohibition on food containing drug/biological products still under clinical investigations simply cannot be abridged by the Farm Bill.
Applicant’s Argument: Their hemp oil extract is a dietary supplement, not food and therefore its goods should not fall under the cited prohibition of the FDCA.
TTAB Response: The TTAB rejected this argument. The FDCA’s definition of food includes dietary supplements and under 21 U.S.C. § 321(f), “[t]he term ‘food’ means (1) articles used for food or drink for man or other animals … and (3) articles used for components of any such article.” It defines food as articles used for “food or drink for man or other animals” and “components of any such article.” Using this definition, the TTAB found that Stanley Brothers’ goods were food.
Applicant’s Argument: CBD is exempt from the FDCA because it was marketed for food before the clinical investigation of CBD began. Stanley Brothers submitted a press release by the Hemp Industries Association (“HIA”) which stated that the use of CBD in food predated the clinical study of CBD.
TTAB Response: TTAB rejected this argument because they found it to be “unsupported by any probative evidence” and interpreted the press release not as statement of fact but of HIA’s opinion. Also, the Food and Drug Administration disputes the HIA’s assertion that the use of CBD in food products pre-dates the clinical trial.
THE RULING OF THE CBD TRADEMARK CASE
Ultimately, the TTAB held that the Examining Attorney did indeed establish that the Applicant’s goods constituted a per se violation of the FDCA and therefore would be an inadmissible basis for a trademark registration on the Trademark Act. The TTAB affirmed the unlawful refusal of Stanley Brothers’ trademark application.