Wild West No More?

● The U.S. Patent and Trade­mark Of­fice and the FDA are tak­ing a closer look at CBD prod­ucts.

WWD Digital Daily - - Front Page - BY SINDHU SUN­DAR

As CBD use pro­lif­er­ates, gov­ern­ment agen­cies take a closer look.

The main­stream­ing of CBD beauty prod­ucts like lip balm, face serums and soaps con­tain­ing the hemp ex­tract cannabid­iol has seen great de­mand from con­sumers, but lit­tle over­sight from gov­ern­ing bod­ies.

The 2018 Farm Bill in De­cem­ber, which re­moved hemp from the list of drugs un­der the Con­trolled Sub­stances

Act, set the stage for the wide­spread com­mer­cial­iza­tion of hemp-de­rived prod­ucts, but it left a lot un­known. Then last month, the U.S. Patent and Trade­mark Of­fice joined the fray. As ap­pli­ca­tions rolled in to trade­mark CBD prod­ucts, the agency is­sued guidance say­ing that marks can qual­ify for fed­eral trade­mark pro­tec­tion if they are legally used in com­merce. But it isn’t just about the Con­trolled Sub­stances Act, the of­fice said — it also means that the Food and Drug Ad­min­is­tra­tion, which im­ple­ments the Food, Drug and Cos­metic Act, might need to pro­vide some an­swers.

In the mean­time, brands have been charg­ing ahead. Can­nuka, which makes skin-care prod­ucts with CBD and manuka honey, launched at Ulta Beauty stores in March. The lux­ury CBD beauty brand Saint Jane now sells some­thing called Mi­cro­dose Lip gloss, which is made of in­gre­di­ents in­clud­ing CBD and chamomile ex­tract.

Since the PTO’s guidance on May 2, a few hun­dred trade­mark ap­pli­ca­tions have been filed for prod­ucts con­tain­ing CBD, ac­cord­ing to a re­view of re­cent PTO ap­pli­ca­tions for cos­met­ics and phar­ma­ceu­ti­cal prod­ucts.

But the agency seems to be tak­ing it slow, wait­ing to fig­ure out how to eval­u­ate them, es­pe­cially while the FDA con­sid­ers the in­gre­di­ent’s safe and le­gal mar­ket­ing, said in­tel­lec­tual prop­erty ex­perts.

“I do think it was an im­por­tant guidance, be­cause there’s been so much con­fu­sion in the in­dus­try about what is and isn’t el­i­gi­ble for trade­mark pro­tec­tion,” said Ali­son Mals­bury, an at­tor­ney at Har­ris Bricken who ad­vises clients in the cannabis, en­ter­tain­ment and tech in­dus­tries.

“I think the PTO is wait­ing to see how they’re go­ing to put to­gether a co­he­sive strat­egy on how to han­dle these ap­pli­ca­tions,” she said. “It might take them time to fig­ure out what info they need to re­quest from ap­pli­cants to prove that the goods com­ply with the 2018 Farm Bill.”

The Farm Bill ba­si­cally de­crim­i­nal­ized hemp, say­ing it was no longer a con­trolled sub­stance that needs the Drug En­force­ment Agency’s ap­proval be­fore it could be sold. But it left a lot of lee­way for more reg­u­la­tion to ad­dress le­gal sales of hemp and hemp-de­rived prod­ucts.

For in­stance, it said that while states can’t pro­hibit the trans­porta­tion of hemp prod­ucts across state lines, they would still be able to en­force their laws on re­tail sales of such prod­ucts. States will have to seek ap­proval from the U.S. Depart­ment of Agri­cul­ture for their plans to reg­u­late the prod­uct within their bor­ders.

That ef­fec­tively means that it’s now up to agen­cies and states to es­tab­lish a reg­u­la­tory frame­work for com­pa­nies to legally sell these prod­ucts, at­tor­neys said.

“The fed­eral gov­ern­ment chose to al­low each state to come up with its own in­di­vid­ual plan, and get ap­proval for it from the USDA, and en­force it within its own bor­ders,” said Nilda Isidro, part­ner in Good­win Proc­ter LLP’s prod­ucts lit­i­ga­tion and coun­sel­ing prac­tice.

“There will be a fair amount of dis­cre­tion left to the states rather than a sin­gle uni­fied stan­dard across all 50 states,” she said.

The PTO’s guidance also sig­nals that trade­mark ex­am­in­ers will look at com­pa­nies’ mar­ket­ing ma­te­ri­als more closely to as­sess their claims about what their CBD-prod­ucts can do for con­sumers. These mar­ket­ing claims also fall un­der the ju­ris­dic­tion of the FDA, which has yet to weigh in con­cretely on its use in cos­met­ics. As the FDA con­sid­ers the is­sue, can the PTO still grant trade­mark ap­pli­ca­tions for CBD prod­ucts? Maybe, but it’s not clear how well it will stick, es­pe­cially if the FDA comes out later with safety con­cerns, at­tor­neys said.

“If you have an ap­pli­ca­tion that’s ma­tured to regis­tra­tion, the weak­ness is that it is sub­ject to a po­ten­tial can­cel­la­tion pro­ceed­ing,” said Oliv­era Me­denica, a part­ner at Dun­ning­ton Bartholow &

Miller LLP, who ad­vises fash­ion brands on in­tel­lec­tual prop­erty is­sues. “And it would be dif­fi­cult to en­force a mark over a sub­stance that’s not ap­proved by the FDA.”

The FDA ap­plies dif­fer­ent stan­dards to phar­ma­ceu­ti­cals than to cos­met­ics, which it scru­ti­nizes far less. But when there are claims that a cos­metic has medic­i­nal or heal­ing ef­fects, it could blur the lines about whether it func­tions as a drug, said at­tor­neys.

“To sim­plify it, if you say it has an ef­fect be­yond the lay­ers of the skin, then it be­comes a phar­ma­ceu­ti­cal, and if you don’t say any­thing [about its ef­fect], but you in­clude it as an in­gre­di­ent, then it’s a cos­metic,” said James Prochnow, a share­holder at Green­berg Trau­rig LLP, who fo­cuses on Drug En­force­ment Agency and FDA is­sues. “It’s the claim on the prod­uct that will de­ter­mine whether it’s a drug or a cos­metic.”

At the end of May, the FDA held a hear­ing to con­sider how to reg­u­late CBD in var­i­ous prod­ucts, and has asked the in­dus­try for more in­for­ma­tion. The agency has said it will be look­ing into data from dou­ble-blind stud­ies and other tri­als, and is con­tin­u­ing to hear com­ments. In the mean­time, brands have to be care­ful about how they mar­ket their CBD creams and prod­ucts, at­tor­neys said.

“The FDA can con­strue a health claim to be pretty broad, so even those re­ally gen­eral state­ments could trig­ger the

FDA’s def­i­ni­tion of a health claim,” said Mals­bury of Har­ris Bricken. “You’re walk­ing a fine line, es­pe­cially when you’re mak­ing claims about a prod­uct that’s al­ready on the FDA’s radar.”

The Farm Bill’s de­crim­i­nal­iza­tion of hemp left a lot of lee­way for more reg­u­la­tion to ad­dress le­gal sales of hemp and hemp-de­rived prod­ucts.

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