Emerging Horizons in CBD Trademarks

• Author: Dean Kirk
• Pages: 42-64

Published in Landslide, Volume 14, Number 2, 2022. © 2022 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion

thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the

American Bar Association.

42

Emerging

Horizons in CBD

Trademarks

By Dean Kirk

Image: Getty Images

Published in Landslide, Volume 14, Number 2, 2022. © 2022 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion

thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the

American Bar Association.

42

Published in Landslide, Volume 14, Number 2, 2022. © 2022 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion

thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the

American Bar Association.

42

Dean Kirk is an associate attorney in Washington, D.C., where

he focuses his practice on intellectual property litigation,

and has served as an associate instructor of advocacy for

Washburn University School of Law. The views and opinions

expressed are the author's own and do not ref‌lect the views

of their f‌irm, clients, institution, or any other individual.

to CBD, and the FDA has never issued the sort of regulation

required under the second option in any case.10

This duality—CBD being lawful under one statute, but

excluded under another—means that CBD-containing goods

continue to have a branding problem. Under the Lanham Act,

an applicant seeking federal trademark protection must gener-

ally show either lawful use of the mark in interstate commerce

or a bona de intent to use the mark in the near future.

11

The

rst option, commonly known as a section 1(a) application,

covers applicants who are currently using their desired mark

in commerce with their goods or services. While this seemingly

covers many businesses already selling CBD-containing products

at the state level, meeting this requirement is functionally impos-

sible under current law. Because the drug exclusion rule means

that food and supplements containing CBD cannot be lawfully

introduced into interstate commerce, no applicant can show

the lawful use required for federal protection.12 This has led to

applicants relying on the section 1(b) intent-to-use (ITU) applica-

tion.13 The ITU route achieves two goals: the applicant has three

years to show lawful use of the mark in commerce, and—once

satised—their use is effectively back-dated to the ling date,

granting them priority over later applicants. While this approach

carries obvious risk if Congress does not resolve the FDCA issues

in time, by using an ITU application, the applicant can make the

bet that CBD will no longer be unlawful under the FDCA before

the expiration of the three-year window.

FDCA Treatment at the USPTO and TTAB

In re Stanley Brothers Social Enterprises, LLC,

14

an appeal heard

by the Trademark Trial and Appeal Board (TTAB) following the

United States Patent and Trademark Ofce’s (USPTO’s) refusal

to register the mark CW, illustrates how the USPTO and TTAB

treat applications to register food and supplements containing

CBD derived from hemp following the 2018 Farm Bill. Stan-

ley sought protection for the CW mark to identify bottles of

its “CW Hemp” brand of extract—of the eponymous “Char-

lotte’s Web” strain.15 Stanley intended to advertise its extract as

a nutritional supplement, offered in multiple avors, to be used

in recipes for beverages.

16

Stanley’s extract was within the 0.3%

THC content required for lawful classication under the 2018

Farm Bill, and was grown under a state regulatory program.

17

In

a move predicted by both USPTO guidance and FDA testimony

on the 2018 Farm Bill,18 the TTAB invoked the drug exclusion

rule to afrm the examiner’s denial of Stanley’s mark as cover-

ing goods that were per se unlawful.

19

The TTAB emphasized

the USPTO’s “longstanding practice” of presuming lawful use

before explaining that while Stanley’s extract might be lawfully

cultivated to evade CSA rejection, the intended use of CBD as a

dietary supplement gave rise to a violation of the FDCA, render-

ing the goods unlawful in interstate commerce.20

The regulatory gaps in the wake of the Agriculture Improve-

ment Act of 2018 (2018 Farm Bill) leave many hemp

businesses without a clear path to federal trademark regis-

tration. However, the legislature is working to remedy that

problem. In the House, H.R. 841, the Hemp and Hemp-Derived

CBD Consumer Protection and Market Stabilization Act of 2021,

seeks to legalize dietary supplements containing hemp-derived

cannabidiol (CBD).1 In the Senate, S. 1698, the Hemp Access and

Consumer Safety Act, would provide a legal path for CBD-contain-

ing food and beverages in addition to dietary supplements.2 Until

Congress acts, companies selling hemp-derived CBD products will

need counsel to navigate the dicey state and federal regulatory

landscape for brand protection. Until then, businesses can posi-

tion themselves for success by growing federal brand strength in

settled regions, claiming available common-law rights stateside,

and preparing to invest in the coming market.

FDCA Causes Continued Trademark Refusals after

2018 Farm Bill

In 2018, Congress attempted to add new legal certainty for the

CBD industry, redening low-toxicity cannabis as “hemp” and

thus descheduling it from the Controlled Substances Act (CSA).3

Coming mere months after Canada legalized marijuana for recre

-

ational use, this reected, in the Food and Drug Administration’s

(FDA’s) own words, “a policy sea change.”

4

Prior to the enactment

of the 2018 Farm Bill, the CSA deemed most cannabis—marijuana,

hemp, or otherwise—as a schedule I substance under the purview

of the Drug Enforcement Agency. The bill’s newly created “hemp”

denition legalized cannabis plants and derivatives containing no

more than 0.3% tetrahydrocannabinol (THC) by weight, when

produced under a state or federally regulated growing program.

For trademark stakeholders, descheduling hemp from the CSA

cleared only one hurdle of many on the path to brand protec-

tion. The Federal Food, Drug, and Cosmetic Act (FDCA),5 which

covers food and dietary supplements, continues to pose a barrier to

federal trademark protection for CBD-containing food and supple-

ment products, even if that CBD is derived from hemp legalized

in the 2018 Farm Bill and therefore descheduled from the CSA.

The main barriers for trademark stakeholders are an exclusion

clause within the denition for supplements—the drug exclusion

rule—and an equivalent limitation in food regulation.

6

Under the

drug exclusion rule, a potentially marketable and lawful “dietary

supplement” may not include “an article authorized for investiga-

tion as a new drug, antibiotic, or biological for which substantial

clinical investigations have been instituted and for which the exis-

tence of such investigations has been made public.”7 Due to various

clinical studies conducted on CBD, and the FDA’s 2018 approval

of the antiseizure drug Epidiolex (a prescription containing CBD),

CBD is excluded from both supplements and foods.8 Therefore,

despite hemp being descheduled under the CSA, the drug exclusion

rule, and equivalent limitation in food regulation, still prohibits

introduction of food and supplements containing CBD into inter-

state commerce. There are limited exceptions to the drug exclusion

rule: (1) prior marketing of the food or supplement before the

relevant drug’s approval, or (2) a notice-and-comment regulation

by the FDA nding that the article would be lawful.

9

However,

no litigant has succeeded in taking the rst option with respect

42

Published in Landslide, Volume 14, Number 2, 2022. © 2022 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion

thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the

American Bar Association.

43