Monday, September 28, 2020

Rejecting Attack on USPTO's "Legal Use" Requirement, TTAB Upholds Refusal to Register NATURAL LEAF CBD for Supplements

In this appeal, Applicant NL LLC conceded that the sale of its CBD-infused supplements (under the mark shown below) would be per se unlawful under federal law. However, it argued that the Lanham Act does not specify that the required "use in commerce" must be lawful, and further that use of its mark is legal under Colorado law and therefore comports with all requirements for federal registration. The Board handily rejected NL's arguments and affirmed the refusal to register under Sections 1 and 45 of the Lanham Act. In re NL LLC, Serial No. 87864999 (September 25, 2020) [not precedential] (Opinion by Cindy B. Greenbaum).

The Board found NL's goods to be per se unlawful under Sections 321(ff) and 331(ll) of the Food, Drug, and Cosmetics Act (FDCA) because they comprise food to which a drug (CBD) has been added; substantial clinical investigations of CBD have been instituted, and the existence of these investigations has been made public; and there is no evidence that CBD was marketed in food before the substantial clinical investigations of CBD were instituted. See In re Stanley Bros. Soc. Enters., LLC, 2020 USPQ2d 10658, *11-16 (TTAB 2020).

NL cited no authority for its arguments, and federal courts have expressly disagreed with NL's position and have cited with approval the TTAB's rulings that, although Section 1 of the Lanham Act does not refer to "lawful commerce," the term "commerce" must necessarily refer to "lawful commerce" and that the Lanham Act "was not intended to recognize under its provision shipments in commerce in contravention of other regulatory acts promulgated under the 'commerce clause' of the Constitution." In re Stellar Int'l, Inc., 159 USPQ 48, 51 (TTAB 1968).

The Board also swiftly rejected NL's argument that the USPTO cannot require lawful use in commerce because it conflicts with state law. 

As explained in Brown, 119 USPQ2d at 1351, 1352, and in JJ206, 120 USPQ2d at 1571, “the fact that the provision of a product or service may be lawful within a state is irrelevant to the question of federal registration when it is unlawful under federal law.” In other words, although a state may de-criminalize the sale of a product containing CBD, the applicant cannot use its mark in lawful commerce where, as here, the identified goods are per se illegal under the FDCA.

The Board observed the Supremacy Clause of the U.S. Constitution provides that if there is a conflict between federal and state law, federal law prevails.

And so the Board affirmed the refusal to register.

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TTABlogger comment: Is this a WYHA?

Text Copyright John L. Welch 2020.


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