Hemp and CBD products have become increasingly popular, showing up in everything from dietary supplements to bedsheets. As the popularity of these products has grown, those seeking to build strong cannabis brands have been met with resistance at the U.S. Patent and Trademark Office (USPTO). This brand building became more difficult on June 16, 2020, when the Trademark Trial and Appeal Board (TTAB) — the appellate body for decisions by USPTO trademark examiners — issued a decision confirming nutritional supplements containing hemp oil extract could not be lawfully sold in commerce and therefore cannot obtain a federal trademark registration.
Legal Background
Under the Controlled Substances Act, marijuana remains a Schedule I controlled substance. The Agriculture Improvement Act of 2018 (also known as the Farm Bill) removed hemp from the Controlled Substance Act’s definition of marijuana, effectively legalizing the production of cannabinoids derived from industrial hemp (including CBD).
Under the Farm Bill, hemp is defined as “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 [THC] concentration of not more than 0.3 percent on a dry weight basis.”
Thus, the Farm Bill provided for legal cultivation of industrial hemp and commercialization of various cannabinoids found within, as apparent from the rapid growth of the market and cannabis brands.
But the Food, Drug, and Cosmetic Act prohibits the use of a “drug” in food or dietary supplements undergoing public clinical investigations without authorization by the Food and Drug Administration (FDA). The Food, Drug, and Cosmetic Act defines the term “dietary supplement” as a product that is “intended for ingestion.” While this definition is broad, it does permit some flexibility. For example, while the FDA has issued dozens of warning letters to CBD companies, it has found that tinctures that are to be taken “sublingually” (meaning under the tongue) are not dietary supplements. However, for hemp or CBD products that are “intended for ingestion,” the FDA maintains they cannot be lawfully sold as dietary supplements.
This rationale stems from the FDA’s analysis that CBD is an active ingredient in drugs undergoing clinical trials (namely Epidiolex, a purified form of CBD approved for use in rare seizure disorders). Correspondingly, the FDA interprets the Food, Drug, and Cosmetic Act as otherwise barring hemp and CBD in food and dietary supplements intended for human or animal consumption.
Thus, even if a CBD product meets the definition of “hemp” under the Farm Bill, it still must comply with other applicable laws, including the Food, Drug, and Cosmetic Act. Although the FDA has indicated it will issue regulations to more fully address this topic, to date it has not done so.
The USPTO’s Standard
The USPTO has a longstanding rule that use of a trademark must be lawful under federal law to provide a basis for federal trademark registration. In May 2019, USPTO issued guidelines for examination of marks relating to cannabis and cannabis-derived products, including CBD. These guidelines acknowledge that hemp-derived CBD products are no longer prohibited under the Controlled Substances Act, but suggested that the USPTO would follow FDA guidance and refuse to register trademarks that are non-compliant with the Food, Drug, and Cosmetic Act.
A Recent Refusal
The USPTO’s application of this rule was made explicit in the June 2020 decision in In re Stanley Brothers Social Enterprises, LLC (Serial No. 86/568,478; June 16, 2020). Stanley Brothers (now Charlotte’s Web, Inc.) first submitted a trademark application for its CW trademark in 2015 for “hemp oil extracts sold as an integral component of dietary and nutritional supplements” in International Class 5. As the Controlled Substances Act and Farm Bill evolved, the trademark application was examined by the USPTO. During examination, Stanley Brothers presented evidence that its hemp oil was complaint with Farm Bill requirements, was grown under a certified Colorado industrial hemp cultivation program and contained a THC concentration of less than 0.3% on a dry weight basis.
Nonetheless, the trademark examiner, as affirmed on appeal to the TTAB, refused registration of the CW trademark. The TTAB found that these dietary supplements containing hemp oil fell into the Food, Drug, and Cosmetic Act’s purview of goods that cannot be lawfully sold in commerce. Therefore, the TTAB viewed the products as not lawfully sold in commerce and affirmed the examiner’s refusal of the trademark application.
For the time being, it seems unlikely that the USPTO will allow any trademarks to issue for goods that are not compliant with the Food, Drug, and Cosmetic Act, which would seem to include most dietary supplements containing hemp oil or CBD.
Other opportunities
The USPTO may still issue trademarks for cannabis-derived goods that the FDA interprets as being compliant with the Food, Drug, and Cosmetic Act. This potentially includes, for example, nutritional supplements that include ingredients that are “generally recognized as safe” (GRAS), such as hulled hemp seed, hemp seed protein powder and hemp seed oil, as well as, of course, non-consumable (topical) CBD products. Another avenue is federal trademark protection for ancillary cannabis-related goods and services that are lawfully sold in commerce.
Despite the lack of availability of federal trademark protection for certain cannabis-derived products, there are other possibilities for intellectual property protection. A common course is claiming common law trademark rights and applying for state trademark registrations, neither of which are reliant on the Food, Drug, and Cosmetic Act. However, as compared to federal registration, both common law and state trademarks may be more difficult to enforce, especially on the internet or outside a home geographic area.
Copyright protection may also be available for logo designs, as the U.S. Copyright Office does not make a lawful-use determination while assessing registrability.
As commercialization of hemp and CBD continues, companies will want to turn to a trusted intellectual property advisor to help develop a strategy to grow their cannabis brand in this fluctuating landscape.
Moish E. Peltz
Moish E. Peltz is a partner at Falcon Rappaport & Berkman PLLC, where he leads the Intellectual Property Practice Group. He has worked with companies to build and grow cannabis businesses and brands across the country. He can be reached at mpeltz@frblaw.com.