In March of 2015, Stanley Brothers Social Enterprises, LLC (“the Applicant”) filed a trademark application for the standard characters CW. The Application was for “hemp oil extracts sold as an integral component of dietary and nutritional supplements.” After a series of Office Actions issued by the USPTO, the trademark was refused registration under Sections 1 and 45 of the Trademark Act. In particular, the Examining Attorney believed that the Applicant’s use of the goods in commerce is unlawful because the goods are considered by the USPTO to be illegal under:

(1) the Federal Food, Drug, and Cosmetic Act (“FDCA”), and

(2) the federal Controlled Substances Act (“CSA”).

An appeal to the Trademark Trial and Appeal Board (“the Board”) was filed on February 27th, 2017 to determine “whether [the] Applicant’s goods are legal under federal law” and in particular, whether the goods are legal under the FDCA and CSA.

Hemp oil and CBD chemical formula
Hemp oil and CBD chemical formula

The 2018 Farm Bill

The Board stated that the legality of the Applicant’s goods “depends on the nature and intended uses of Applicant’s goods.” Additionally, § 907 of the Trademark Manual of Examining Procedure (“TMEP”) states that “use of a mark in commerce much be lawful under federal law to be the basis for federal registration.”

In May of 2019, the USPTO released updated examination guidelines for the examination of trademarks for cannabis-related goods and services. These guidelines were published in view of the 2018 Farm Bill that was passed by Congress. With regards to the Farm Bill, CBD products that contain no more than 0.3% THC on a dry-weight basis are no longer controlled substances under the CSA. Thus, the Farm Bill potentially prevents the USPTO from issuing refusals based on the CSA as long as the goods are derived from hemp and are not derived from marijuana.

The United States Food and Drug Administration (“FDA”)

While the Farm Bill potentially opens avenues for registration of cannabis and cannabis-related goods and services, the Farm Bill nevertheless retained the FDA’s power to regulate products that contain CBD. Under the FDCA, “[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” is prohibited. Thus, ingestible products that contain CBD are considered food and since CBD is the subject of clinical investigations that have been made public, its uses are therefore unlawful under federal law. Accordingly, the Applicant’s goods fall under the FDA’s domain as prescribed by the DCA.

The Appeal Before the Board

In regards to the CSA, the Board found that the Applicant’s goods fall within the “industrial hemp” definition that Congress exempted from several of the CSA restrictions. In particular, “industrial hemp” is defined as “the plant Cannabis sativa L. and any part of such plant, whether growing or not, with a delta-9-tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis.”

However, “while the Industrial Hemp Provision is a limitation on the CSA under certain circumstances, it does not override the FDCA’s prohibition on the ingestion of CBD. On appeal, the Board found that the Applicant’s goods do in fact, fall within the FDCA’s definition of “food” as the Applicant’s goods are recommended to be used in beverages and are further promoted as “dietary supplements.” In fact, the Applicant’s recitation specifically states that the Applicant’s goods are “sold as an integral component of dietary and nutritional supplements.”

In the end, the Board affirmed the Examining Attorney’s refusal to register the Applicant’s mark because there was a per se violation of the FDCA.

The Takeaway

Even if applicants can overcome come the USPTO’s CSA rejection, their applications are likely to still face a rejection. Specifically, for not having a lawful use as long as the applicant’s products are:

(1) intended to be ingested; and

(2)there remain substantial clinical investigations into CBD.