TTAB Issues Precedential Decision Affirming Unlawful Use Refusal of Trademark Registration for Ingestible CBD Supplements Based on Food, Drug and Cosmetics Act
Federal registration of trademarks for cannabis and hemp goods and services remains elusive for many mark holders in light of the continued restrictions on legal use of cannabis and hemp-derived products. A recent precedential Trademark Trial and Appeal Board (TTAB or the Board) decision appears to have eliminated one possible argument in favor of permitting registration of marks for certain CBD products, and once again leaves would-be registrants looking to common law and state law for trademark protections.
The Agricultural Improvements Act of 2018, colloquially known as the 2018 Farm Bill, provides that hemp is removed from the definition of marijuana within the Controlled Substances Act (CSA). Under the CSA, marijuana is defined as Cannabis sativa L. and any part of the 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 (THC) concentration of not more than 0.3 percent on a dry-weight basis. This reclassification of hemp seemingly opened the door to a host of new opportunities for companies selling hemp and hemp-derived products, including the possibility of obtaining previously unobtainable federal trademark registrations. The general public appears to have understood this change in the law as making CBD “legal.” However, there remain important and nuanced restrictions on hemp-derived products that affect the registrability of marks.
In light of the 2018 Farm Bill, the United States Patent and Trademark Office (USPTO) issued Examination Guide 1-19 (the Guide) to provide clarity on the examination of marks used to identify cannabis and cannabis-related products. See Gallagher, M, and Thorvaldsen, K, “Federal Trademark Considerations for Cannabis/CBD Goods and Services.” The Guide plainly acknowledges the change in legal status of hemp and hemp-derived products under the 2018 Farm Bill. However, the Guide also reemphasizes the statutory prohibition on registration of trademarks or service marks for use in connection with goods and/or services that are not lawful under federal law, even if the goods and/or services are lawful under state law.1 Notably, the meaning of “lawful” is not confined to whether a good is prohibited under the CSA, but also entails an examination of whether it is lawful under other applicable federal laws.
The first factor the USPTO will consider in examining the application is whether the goods derived from “hemp” are otherwise federally lawful. The Guide indicates that the CSA may be removed as a ground for refusal if the goods are derived from hemp. However, the Guide states that the use in foods or dietary supplements of a drug or substance undergoing clinical investigation without approval of the U.S. Food and Drug Administration (FDA) violates the Federal Food, Drug and Cosmetic Act (FDCA). Foods, beverages, dietary supplements or pet treats containing CBD still will be refused as unlawful under the FDCA, even if derived from hemp, as such goods may not be introduced lawfully into interstate commerce pursuant to current FDA guidance.
Challenge to the Application of the Guidance
The application of this guidance was challenged by an applicant seeking to register a mark for a dietary supplement containing CBD. In re Stanley Brothers Social Enterprises, LLC, the Applicant, a Colorado marijuana grower, had developed a strain of hemp that is high in CBD content and low in THC content. From this strain, the Applicant was able to produce a hemp oil that did not have more than 0.3 percent THC on a dry-weight basis, consistent with the requirements of the Farm Bill. Further, Colorado allowed for the cultivation of industrial hemp, and the Applicant’s hemp was grown and cultivated for “the purpose of research conducted under the agricultural academic research program from a university or state department of agriculture.”
The Applicant’s registration was refused by the examining attorney. At issue was whether the Applicant’s goods were legal under federal law, in particular the FDCA and CSA, which depended on the nature and intended uses of the Applicant’s goods. In appealing the refusal, the Applicant argued that (1) the 2014 Farm Bill’s Industrial Hemp Provision exempts it from this portion of the FDCA; (2) CBD oil does not fall under cited prohibition as it is a “dietary supplement” rather than “food”; and (3) CBD falls within an FDCA exception for drug or biological products marketed in food before any substantial clinical investigations involving the drug or the biological products have been instituted. To support this, the Applicant cited a statement from the Hemp Industries Association (HIA) in a press release that explained it was the position of the HIA that CBD products were marketed as foods and dietary supplements long before the FDA began testing.2
On appeal, the TTAB rejected all three of the Applicant’s arguments. The Board held that while the 2014 and 2018 Farm Bills have authorized the production of industrial hemp, they do not authorize the distribution or sale of CBD in food that remains subject to FDA regulation. The Board further held that CBD oil does fall under the cited prohibition as it is considered “food.”3 The Applicant’s CBD oil was found to meet the definition of food as it was recommended to be used in recipes for beverages, offered in multiple favors and promoted as a dietary supplement. Further, the Applicant identified its CBD oil as an integral component of dietary and nutritional supplements.
Finally, and perhaps of most significance, the Board found that CBD qualifies as 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. It specifically cited investigations by GW Pharmaceuticals regarding Sativex and Epidiolex in support of its position that CBD is under substantial clinical investigation and rejected the Applicant’s argument that CBD was in wide use before it was submitted to the FDA for testing and therefore was exempt from laws that would otherwise exclude CBD from being considered a dietary supplement.
In rejecting the argument, the Board noted that the Applicant submitted insufficient evidence that CBD had been in wide use before clinical testing, describing the HIA press release on which the Applicant relied in support of its argument as a “self-styled position” that had been disputed by the FDA. Further, no factual evidence was provided by the Applicant to support the statement. The lack of evidence of widespread use was particularly significant where CBD, which is derived from cannabis, was illegal under federal law in almost all forms prior to 2014 and remains illegal under federal law in nearly all forms today.
The unlawful use refusal based on the FDCA was affirmed as the Applicant failed to show that its goods were not food to which a drug (CBD) had been added; substantial clinical investigations of CBD had not been instituted, and any investigations that were conducted had not been made public; and CBD was marketed in food before the substantial clinical investigations of CBD were instituted.
Takeaways / Guidance
While there may have been a colorable argument that CBD was in use prior to clinical investigations, its viability has been seriously undermined by the TTAB’s precedential decision In re Stanley Brothers Social Enterprises, LLC. The evidence put forth by the Applicant was described by the Board as insufficient, which suggests that if the Board had been provided with more substantial evidence showing that CBD was in use before clinical investigation, it could have come to a different conclusion. Although this may not completely rule out the possibility of approval marks for CBD in food or supplements, it certainly signals that an applicant would have a heavy evidentiary burden to show that CBD was in use prior to substantial clinical investigation such that it is exempt from the FDCA prohibition.4
Currently, the FDA is actively investigating whether a pathway should exist for CBD through the agency’s rulemaking process. Although the FDA appears firmly entrenched in its position regarding CBD in foods and beverages, it recently has expressed a clear intent to create a viable regulatory pathway for CBD as a dietary supplement. To that end, the agency is awaiting the completion of research studies already under way and is conducting a sampling study on CBD products to help prevent product mislabeling and adulteration. Further FDA guidance on CBD in dietary supplements may cause TTAB to loosen its restrictions on approval of trademarks for those products.
One also should ask whether goods containing the so-called “novel” cannabinoids such as CBG, CBN and THCA may be trademarked. The drug preclusion rule should not apply at the present time to these lesser-known cannabinoids for which no substantial clinical research has been conducted and made public. Likewise, the FDA has not yet taken any public position on cannabinoids in foods or supplements other than CBD and THC.
Although the decision in effect blocks federal trademark registrations for ingestible CBD products at this time, certain strategies still can be implemented to protect a brand, such as registering a trademark for a related or ancillary good or service, which allows for the reinforcement of brand strength and recognition in the interim.
This article was prepared with assistance from Gregory Costa Associate-Boston
1 For a mark to be registered, use of the mark must be lawful. A mark’s use is presumed lawful unless the application record indicates violation of federal law. Registration generally will not be refused based on unlawful use in commerce unless either (1) violation of law is indicated by the application record or other evidence, such as when a court or federal agency responsible for overseeing activity is relevant to its application has issued a finding of noncompliance under the relevant statute or regulation, or (2) when the applicant’s application-relevant activities involve a per se violation of a federal law.
2 The HIA press release stated: “It is the position of the HIA that legal hemp products containing CBD were marketed as foods and dietary supplements long before cannabidiol formulations were submitted to the FDA for testing as a ‘new drug.’ As such, CBD products are exempt from laws that preclude CBDs from product status as dietary supplements pending ‘new drug’ approval by the FDA.”
3 Food is defined as “articles used for food or drink for man or other animals and articles used for components of such articles.”
4 The Board cites GW Pharmaceuticals’ investigations regarding Sativex and Epidiolex; evidence of prior use would have to predate these investigations.