As more and more states legalize the use of cannabis, the number of people attempting to enter the market place has exploded. Thus far in 2018, 1,047 trademark applications were filed with the USPTO listing cannabis or cannabidiol (“CBD”) in their goods and services, while a mere six years ago, in 2012, there were 21 trademark applications filed. Just in the month of October, 145 trademark applications in relation to the cannabis industry were filed. However, while many states are becoming increasingly friendly to the cannabis industry, the Federal Government and by extension the United States Patent and Trademark Office (“USPTO”) are not. In 2018, only eight trademarks related to CBD have been successfully registered.
To obtain successful registration of your trademark the goods and services for which you are claiming trademark protection must be shown to be legally used in commerce. Typically, when a trademark with cannabis and/or CBD in their goods/services is filed with the USPTO, the examining attorney will issue an automatic refusal on the grounds that the goods are not legally used in commerce.
Legal Use in Commerce
Cannabis
Under the Controlled Substances Act (“CSA”), the manufacture, distribution, and dispensing of cannabis is illegal. Thus, if the goods you are attempting claim federal trademark protection over include cannabis as an ingredient then the lawful use in commerce requirement cannot be met and your trademark application will be refused.
CBD
The CSA defines marijuana to include “all parts of the plant Cannabis sativa L., whether growing or not; the seeds thereof; the resin extracted from any part of such plant; and every compound, manufacture, salt, derivative, mixture, or preparation of such plant, its seeds or resins.” 21 U.S.C. §802(16).
The CSA definition of marijuana expressly excludes “the mature stalks of such plant, fiber produced from such stalks, oil or cake made from the seeds of such plant, any other compound, manufacture, salt, derivative, mixture, or preparation of such mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of such plant which is incapable of germination.” 21 U.S.C. §802(16).
On Dec. 14, 2016, the Drug Enforcement Agency (DEA) published a new drug code for Marijuana Extract ("Final Rule") that in effect, expanded the definition of marijuana to include extracts and derivatives, which could be interpreted to include CBD.
As a result of the confusion the Final Rule created, in March of 2017, the DEA issued a clarifying statement stating that CBD that comes from the part of the cannabis plant that is legal, such as the mature stalk, is excluded from the CSA definition of marijuana and is legal. Thus, depending on the source of the CBD, it may fall outside the scope of the definition of marijuana and may therefore be legal.
Despite the CSA and DEA clarifying statement, the law surrounding CBD and how it is applied by the USPTO is far from clear. However, a recent decision from the USPTO sheds some light on their position on trademarks that involve the use of CBD in their products.
On April 20, 2018, the USPTO issued a final refusal to register the mark “Charlotte’s Web” (applied for by the Stanley Brothers Social Enterprises, LLC), which listed its goods as “plant extracts, namely, hemp oil sold as a critical component or ingredient of dietary supplements.” However, applicant’s specimens showed that the goods were dietary supplements infused with or comprised of CBD. Applicant stated that the CBD used in their goods is derived from the Cannabis sativa L plant and that the CBD was derived from more than just the mature stalks and sterilized seeds of the plant, but from the entire plant including the resins, stalks, stems, buds and flowers and that the amount of CBD used in applicant’s dietary supplements is more than a trace amount (in excess of 50 parts per million). Thus, the examining attorney refused applicant’s trademark registration on the following two grounds:
1. Unlawful Use in Commerce
Violates the CSA
The examining attorney found that the items or activities in the application with which the mark is used are a violation of federal law on its face. Federal law, under the CSA, prohibits the sale, distribution, dissemination and possession of marijuana and marijuana-based preparations.
Applicant stated that it obtained CBD from the entire part of the Cannabis stavia L plant, not just the mature stalks and sterilized seeds, which is unlawful under the CSA. Thus, the examining attorney found that as long as the applicant is producing dietary supplements with CBD derived from Cannabis sativa L, the goods fall within the definition of marijuana under the CSA and are unlawful to be used in commerce. As a result, applicant’s trademark was refused federal registration.
Violates the federal Food, Drug & Cosmetic Act (FDCA)
The examining attorney stated that
“The FDCA prohibits the introduction or delivery for introduction into interstate commerce of a food which has been added a drug or a biological product for which substantial clinical investigations have been instituted and for which the existence of such investigations has been made public. 21 U.S.C. §331(ll); see also 21 U.S.C. §321(ff) (indicating that a dietary supplement is deemed to be a food within the meaning of the Federal Food, Drug and Cosmetic Act). The U.S. Food & Drug Administration has stated that substantial clinical investigations of cannabidiol have begun and thus products containing cannabidiol may not be sold as dietary supplements. See U.S. Food & Drug Administration, FDA and Marijuana: Questions and Answers, available at http://www.fda.gov/newsevents/publichealthfocus/ucm421168.htm#dietarysuppl”
Applicant identified its goods as “plant extracts, namely, hemp oil sold as a critical component or ingredient of dietary supplements” and its specimen of the goods clearly show that the goods contain oils which are comprised of CBD. Thus, the examining attorney found that due to the applicant’s products being marketed to consumers and identified as a dietary supplement in which CDB hemp oil extract was a component, its goods violate the FDCA and registration was refused.
2. The 2014 farm bill did not “legalize” hemp on a national level
Applicant argued that its goods are not prohibited under either the CSA or the FDCA because the 2014 Farm Bill, 7 U.S.C. Section 5940, has effectively overruled the FDCA as well as the CSA by declaring that hemp is a legal product at the federal level and that all things made from hemp are, therefore, legal.
The applicable provision of the 2014 Farm Bill, 7 U.S.C. Section 5940(a) says that “notwithstanding the Controlled Substances Act, or any other federal law, an institution of higher education or a State department of agriculture may grow and cultivate hemp if (1) the industrial hemp is grown or cultivated for the purposes of research conducted under an agriculture pilot program or other agricultural academic research and (2) the growing or cultivating of the industrial hemp is allowed under the laws of the State in which such institution of higher education or State department of agriculture is located and such research occurs.”
The examining attorney found that:
“although applicant is correct that the cited portion of the Farm Bill states that “industrial hemp” is Cannabis sativa L which is less than 0.3 percent tetrahydrocannabinol (THC) on a dry weight basis, the Farm Bill did not make “hemp” and everything made or extracted from hemp “legal” on a nationwide basis as applicant contends. Section 7606 of the 2014 Farm Bill, 7 USC Section 5940, merely allowed universities and/or state departments of agriculture to create pilot programs to grow Cannabis sativa L with a THC content of less than 0.3 percent for purposes of conducting academic or scientific or marketing research. However, this marketing research did not extend to general commercial activity nor did it make all hemp related goods “lawful” on a federal level. The 2014 Farm Bill provision, for example, did not allow those participating in a state pilot program to sell seeds or plants to consumers in other states nor did it allow for goods made under the program, such as applicant’s dietary supplements, to be sold in states which have not established similar pilot programs.”
Further, “the Federal Register notice goes on to state that Section 7606 of the 2014 Farm Bill, 7 USC Section 5940, did not amend the FDCA’s requirements for obtaining FDA approval for new drug applications or the requirements for conducting clinical trials and research prior to such approval, or the FDA’s oversight of marketing claims. With regard to the CSA, the Farm Bill provision did not alter the provisions of the CSA that apply to the dispensing, distribution and manufacture of drug products containing controlled substances. “Manufacturers, distributors, dispensers of drug products derived from cannabis plants, as well as those conducting research with drug products, must continue to adhere to CSA requirements.” Federal Register, Vol. 81, No. 156 (August 12, 2016). With regard to “marijuana,” a Schedule 1 prohibited substance, this means that anything which falls within the statutory definition of marijuana, 21 USC Section 802(16), cannot be distributed or disseminated in interstate commerce. This means that if applicant is extracting CBD from all parts of the Cannabis sativa L plant, as applicant has stated, then the goods are marijuana and cannot be sold in interstate commerce under the CSA.”
Thus, the examining attorney denied trademark registration to applicant’s mark. As, applicant’s goods contained CBD derived from all parts of the Cannabis sativa L plant, therefore applicant’s goods could not be legally sold in commerce.
Is Successful Trademark Registration Possible for CBD Related Goods/Services?
While the Charlotte’s Web case certainly sets a difficult precedent to overcome for CBD related products, there have been eight successful registrations in 2018 of trademarks with goods/services in relation to CBD. Thus, it is possible to successfully register a trademark with products/services in the CBD industry. However, the success of the registration depends on whether the products/services are lawful under Federal Law and comply with the CSA and FDCA.
Given the difficulty of obtaining successful registration in relation to CBD and the cannabis industry, before filing your CBD related trademark you should consult with a trademark attorney who can provide you with appropriate guidance.
Should you have any questions in relation to trademarking your brand, please contact O’Neill Tran Law today at katie@oneilltranlaw.com for a free initial consultation.