Emerging Horizons in CBD Trademarks

AuthorDean Kirk
Pages42-64
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

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