With the passage of the 2018 Farm Bill which legalized industrial hemp by removing the crop from the Controlled Substance Act’s definition of “marijuana,” will lead to increased sales and opportunities for hemp-derived cannabidiol (“Hemp-CBD”) companies in 2019. Let’s look at how the legalization of industrial hemp affects trademark applications filed at the United States Patent and Trademark Office.
Even though CBD products are “legal under federal law,” the FDA still says that CBD cannot be sold for human consumption unless it has undergone the agency’s drug approval process. There are three conditions for a product to be an approved CBD drug:
- Be FDA approved;
- Be derived from cannabis; and
- Have less than .1% THC.
The most informative case that helps to illustrate the USPTO’s current position on CBD trademarks is the Stanley Brothers case. Stanley Brothers Social Enterprises, LLC filed a U.S. federal trademark application for CHARLOTTE’S WEB, to be used on “plant extracts, namely, hemp oil sold as a critical component or ingredient of dietary supplements.” In addition to be refused on the basis of the CSA and FDCA, the application was refused because “[t]he 2014 Farm Bill Did Not ‘Legalize’ Hemp on a National Level.” The relevant portion of the 2014 Farm Bill stated “[N]otwithstanding 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 Trademark Examining refused the application on the ground 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 … The Federal Register notice goes on to state that Section 7606 of the 2014 Farm Bill, 7 USC Section 5940, did not amend the federal Food, Drug and Cosmetic Act’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 such as those in the Warning Letter addressed to applicant. With regard to the Controlled Substances Act, 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 I 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.
The FDA-based reasons for denial still stand, and it seems that the FDA holds the key when it comes to federal trademark protection for CBD products. However, there is little information provided by the Food and Drug Administration (“FDA”) about how Hemp-CBD products for human consumption (foods, dietary supplements, and cosmetics) should comply with the FDA requirements, and it could be another 18 to 24 months before the FDA makes a decision regarding the approval of Hemp-CBD products.
Until then, Hemp-CBD manufacturing companies should be cautious and conservative when labeling and marketing their CBD products.