Despite the 2018 Farm Bill’s relaxation of hemp regulation, and the fact that many states that have decriminalized or legalized cannabis and its derivatives, applicants still may face an uphill battle in obtaining federal trademark registration for their cannabis products. In its recent decision in In re Stanley Brothers Social Enterprises, LLC, the Trademark Trial and Appeal Board (“Board”) upheld a refusal to register the mark “CW” for use in connection with hemp oil extracts sold as dietary and nutritional supplements.[1]

To be eligible for a federal trademark registration, a mark must be used in connection with a product or service that is lawfully sold in interstate commerce. While the Board generally presumes that any use in commerce is lawful, it will evaluate whether the product or service is per se illegal. Accordingly, one could not register a mark to be used with heroin, for example.

For many years, U.S. Patent & Trademark Office has maintained that, because marijuana with a THC (the psychoactive compound) percentage of more than 0.3% is illegal under the Controlled Substances Act (“CSA”) as amended by the Farm Bill, a trademark covering such products or related paraphernalia is not in lawful use in commerce.[2] Indeed, prior Board cases have held that even applications that do not expressly mention marijuana, but are nonetheless specify goods in a manner suggesting use in connection with marijuana may be rejected on this basis.[3]

The Board in Stanley Brothers, however, declined to address the legality of the products under the CSA. Instead, even though the Stanley Brothers’ food additives and supplements at issue contain CBD (a non-psychoactive compound) rather than THC, the Board held that the supplements were still per se illegal under the Food, Drug & Cosmetics Act (“FDCA”) and thus ineligible for trademark protection. The FDCA bans “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.”[4] FDCA’s definition of “food” includes products marketed as “dietary supplements,” and CBD qualifies as a “drug or biological product.” Further, the CBD in the CW product was under “substantial clinical investigation” prior to being marketed to consumers. Thus, the Board held that CW product was banned under the FDCA.

This decision may be another roadblock for cannabis products to obtain registration, and shows that the Board is reluctant to grant registration covering a cannabis derivative in the absence of full national legalization of marijuana. Of course, many registrations covering CBD products have nonetheless issued. Accordingly, businesses in the cannabis space will need to consider their trademark strategy carefully.