While the U.S. Patent and Trademark Office’s (USPTO) updated its cannabis trademark guidance in the wake of the 2018 Farm Bill, it didn’t give the green light to all CBD-related trademarks. As highlighted by a recent decision by the Trademark Trial and Appeal Board (TTAB), legal hurdles still remain.

2018 Farm Bill and Cannabis Marks

As discussed in greater detail in prior articles, the 2018 Farm Bill removed “hemp” from the Controlled Substances Act’s (CSA) definition of marijuana, which means that cannabis plants and derivatives that contain no more than 0.3% THC on a dry-weight basis are no longer controlled substances under the CSA. The significant legal change forced the USPTO to revise its wholesale refused to register cannabis-related marks based on the fact that it was illegal under federal law.

Last year, the USPTO issued a new examination guide titled “Examination of Marks for Cannabis and Cannabis-Related Goods and Services after Enactment of the 2018 Farm Bill (Examination Guide). As the USPTO acknowledged in the Examination Guide, determining whether commerce involving cannabis and cannabis-related goods and services is lawful now requires consultation of the CSA, the Federal Food Drug and Cosmetic Act (FDCA), and the 2018 Farm Bill. With regard to the examination of marks for cannabis and cannabis-derived goods, such as CBD, the USPTO advises that hemp-derived goods that comply with the 2018 Farm Bill are now eligible for federal trademark protection. However, for a trademark application to be approved, the identification of goods must specify that they contain less than 0.3% THC.

Accordingly, the USPTO makes it clear that its new guidance only applies to goods derived from hemp. “Cannabis and CBD derived from marijuana (i.e., Cannabis sativa L. with more than 0.3% THC on a dry-weight basis) still violate federal law, and applications encompassing such goods will be refused registration regardless of the filing date,” the Examination Guide states.

The USPTO further emphasizes that even if the identified goods are legal under the CSA, such goods may still raise lawful-use issues under the FDCA. Accordingly, registration of marks for foods, beverages, dietary supplements, or pet treats containing CBD will still be refused as unlawful under the FDCA, even if derived from hemp, because they may not be introduced lawfully into interstate commerce.

TTAB Rejects CBD Mark

The new USPTO Examination Guide means that many marks associated with products containing CBD can now be protected. However, as a Colorado cannabis company learned, there are still restrictions.

The TTAB recently ruled that Stanley Brothers Social Enterprises LLC (Stanley) can’t register the mark “CW” for its hemp oil extract because the product can’t legally be sold in commerce. While the CBD in the product is considered industrial hemp, the product runs afoul of the Food, Drug & Cosmetics Act (FDCA) because the "hemp oil extracts" are food to which CBD has been added. 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 ...."

In reaching its decision, the TTAB rejected Stanley’s counterarguments that the 2014 Farm Bill's Industrial Hemp Provision exempted it from the cited provision of the FDCA and that its goods do not fall within the cited prohibition because they are "dietary supplements" rather than food. “Applicant's argument that the Industrial Hemp Provision exempts it from this portion of the FDCA is misplaced,” the order states. “The Industrial Hemp Provision permits authorized entities to "grow or cultivate industrial hemp" under certain circumstances, but it does not permit the distribution or sale of CBD in food when CBD is the subject of clinical investigation, even if the CBD is derived from industrial hemp which falls outside the CSA.”

The TTAB also rejected the argument that CBD falls 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." In support, the TTAB cited "substantial clinical investigations” by the FDA.

Based on the foregoing, the TTAB affirmed the Examining Attorney’s unlawful use refusal based on the FDCA. “The Examining Attorney has established a per se violation of the FDCA, because: Applicant's goods are food to which has been added a drug (CBD); substantial clinical investigations of CBD have been instituted, and the existence of these investigations has been made public; and there is no evidence of record that CBD was marketed in food before the substantial clinical investigations of CBD were instituted,” the TTAB order states. 

Key Takeaway

The recent TTAB decision highlights that cannabis companies still face hurdles when seeking to protect their intellectual property. While the 2018 Farm Bill was a significant step forward, it legalized only a specific segment of hemp-related products and, thus, many cannabis products are still ineligible for federal trademark protection.

If you have questions, please contact us

If you have any questions or if you would like to discuss the matter further, please contact me, Dan McKillop, or the Scarinci Hollenbeck attorney with whom you work, at 201-896-4100.

This article is a part of a series pertaining to cannabis legalization in New Jersey and the United States at large. Prior articles in this series are below:

• How NJ Supreme Court Decision Impacts Employee Use of Medical Cannabis
• NJ Senate Passes Bill Authorizing Medical Cannabis Patients to Use Telehealth
• Are NJ Employers Required to Accommodate Medical Marijuana in the Workplace?

Disclaimer: Possession, use, distribution, and/or sale of cannabis is a Federal crime and is subject to related Federal policy. Legal advice provided by Scarinci Hollenbeck, LLC is designed to counsel clients regarding the validity, scope, meaning, and application of existing and/or proposed cannabis law. Scarinci Hollenbeck, LLC will not provide assistance in circumventing Federal or state cannabis law or policy, and advice provided by our office should not be construed as such.