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CBD May Be Legal, but Challenges Still Persist in Obtaining CBD Product Trademark Registration

CBD is more common than ever these days, conveniently placed on your local corner store’s checkout aisle. But are they legal to purchase in your state? What about their names and logos, can they be federally registered as trademarks?

Last week, the Trademark Trial and Appeal Board (TTAB) ruled that a Colorado Cannabidiol (CBD) company could not register a trademark for hemp oil extracts because it violated the Food, Drug & Cosmetics Act (FDCA). In In re Stanley Brothers Social Enterprises, LLC, 2020 U.S.P.Q.2d 10658 (TTAB 2020), the Applicant developed a strain of cannabis that contained high CBD and low THC content. This specific strain of cannabis was found to help a young girl with severe form of childhood epilepsy. The girl’s name was Charlotte, and the strain was subsequently named “Charlotte’s Web,” which led to the Applicant’s attempt to trademark “CW.”

CBD is a non-psychoactive naturally occurring phytocannabinoid found in certain strains of cannabis, including marijuana and hemp. Tetrahydrocannabinol (THC) is another compound, well known for its psychoactive properties – the one that gets you “high.” Some studies have found CBD to be effective in providing relief from various mental health conditions, including anxiety, depression, insomnia, and post-traumatic stress disorder. The popularity of CBD products has exploded in recent years thanks to the passage of the U.S. Farm Bill in 2018 that legalized industrial hemp. The popularity has been bolstered by the legalization of medical and recreational marijuana at the state level. The production and purchasing of CBD is federally legal as long as it does not contain more than 0.3 percent THC; however, some state law restrictions may apply. For example, in Virginia, a prescription is necessary to obtain CBD.

When it comes to selling food to which CBD or THC has been added, the FDA’s position is a negative one. Under section 301(11) of the FDCA, it is prohibited to introduce or deliver for introduction into interstate commerce any food to which has been added a substance which is an active ingredient in a drug product that has been approved under section 505 of the FDCA, or a drug for which substantial clinical investigations have been instituted and for which the existence of such investigations has been made public. The FDCA also bans the sale of food products that have drugs added to them under 21 U.S.C. § 331(11).

Because the TTAB determined CBD to be a “biological product for which substantial clinical investigations” are ongoing, registration of the Applicant’s hemp extract product was prohibited. The Applicant argued the product was exempt from the FDCA’s restrictions under the Industrial Hemp Provision; however, the TTAB said that the industry group’s opinion does not change the law. The TTAB found that “a trade group’s unadorned statement of a ‘position’ (as opposed to fact), unsupported by any evidence, is an insufficient basis upon which to make a finding of fact, especially where the FDA disputes the stated position.” The second argument the Applicant presented was that dietary supplements were not “food;” however, because the Applicant identified its hemp oil extract as “an integral component of dietary and nutritional supplements,” the TTAB determined it fell within the FDCA’s definition of food. Lastly, the Applicant argued that CBD fell within an FDCA exception for drugs or biological products “marketed in food … before any substantial clinical investigations involving the drug or the biological product have been instituted.” The TTAB disagreed, however, citing lack of probative evidence.

Trademark registrations associated with cannabis have repeatedly been refused on similar grounds, because they cannot be “lawfully used in commerce.” See PharmaCann, 123 USPQ2d at 1123 (quoting In re JJ206, LLC, 120 USPQ 1568, 1569 (TTAB 2016) and In re Brown, 119 USPQ2d 1350, 1351 (TTAB 2016) (“to qualify for a federal … registration, the use of a mark in commerce must be ‘lawful.’”). In those decisions, the TTAB cited the Controlled Substances Act, which prohibits marijuana at the federal level. The most recent ruling, however, cited only the FDCA, which is likely because hemp and non-psychoactive CBD derived from hemp have been removed from the Controlled Substances Act.

It is interesting to note that a recent litigation proceeding concerning the legality of marketing and selling of CBD was stayed. Glass v. Global Widget, LLC, No. 2:19-cv-01907-MCE-KJN, 2020 U.S. Dist. LEXIS 104400 (E.D. Cal. June 15, 2020). The Defendant claimed the FDA was poised to issue CBD guidance soon, which would provide substantial clarification concerning the issues raised in the lawsuit. The Court decided to stay the lawsuit “until such time as the FDA completes its rulemaking regarding the marketing, including labelling, of hemp-derived ingestible products.”

It would not be surprising if the TTAB adopts a similar standard, where applications involving CBD would not simply be denied, but suspended pending guidance from the FDA. In Glass, the parties were directed to notify the Court within ten days after the expected FDA regulations were issued. This appears to be a reasonable decision, in light of what the FDA has been doing in the last year. The FDA conducted a public hearing on CBD in 2019, and thereafter appointed an agency task force along with a public docket for comments. In November 2019, the FDA issued a consumer update on CBD entitled “What you Need to Know (And What We’re Working to Find Out) About Products Containing Cannabis or Cannabis-derived Compounds, Including CBD.” Furthermore, the FDA stated that the agency is “evaluating the regulatory frameworks that apply to certain (CBD products) that are intended for non-drug uses, including whether and/or how the FDA might consider updating its regulations, as well as whether potential legislation might be appropriate.” All of this indicates that the FDA will be releasing regulations and guidelines very soon, which will not only inform the issues raised in Glass but will also provide guidance for the issuance of CBD trademarks.

COPYRIGHT © 2020, STARK & STARKNational Law Review, Volume X, Number 189

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About this Author

Gene Markin Attorney Stark & Stark Law Firm
Shareholder

Gene Markin is a Shareholder in Stark & Stark’s Complex Commercial, Intellectual Property, and Cannabis Litigation Groups where he concentrates his practice on complex litigation matters involving copyright protection and infringement, trademark and trade dress infringement and enforcement, trade secret litigation, false advertising, domain name disputes, unfair competition, class actions, fraud and consumer fraud, shareholder and partner disputes, breach of contract, cannabis business disputes, cannabis intellectual property matters, cannabis insurance coverage...

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