The TTAB decision in In re Stanley Brothers Social Enterprises, LLC, 2020 USPQ2d 10658 (TTAB 2020) decided three cannabis-related points of law. First, CBD in food products is outside the scope of the Farm Bill’s permissions; second, that dietary or nutritional supplements were “food” regulated under the Federal Food, Drug and Cosmetic Act (FDCA) and thus the CBD-containing products were unlawful, and third, that CBD did not fall within an FDCA exception for drugs or biological products marketed in food before any substantial clinical investigations involving the drug of biological products were instituted.
To assess Stanley’s impact on examination so far, we looked at refusal rates based on the FDCA and relating to applications that include Class 5, and those that explicitly call out any of hemp, CBD, cannabidiol, cannabis, or marijuana in their descriptions of goods. First, we looked at the trends in FDCA refusals over time. There were very few refusals in 2018. This jumped considerably in 2019 to around 2,000 refusals, as the trademark applications filed after passage of the Farm Bill in late 2018 began to be examined. The pace has only increased in 2020, where the Office is on pace to issue around 6,000 FDCA-based refusals.
We also examined the FDCA refusal rates within 2020, to see if the Office picked up the rate of refusals after the Stanley decision was issued. So far, there has been little impact — refusals are continuing at roughly the same, high rate that they were issued prior to the decision. The USPTO is applying the overall standards laid out in Section 907 of the TMEP, and the Stanley decision has simply ratified the USPTO’s course of action rather than changed the course .
Finally, we looked at Office Actions that directly cited to Stanley. Only seventy-seven Office Actions issued to applicants that include Class 5 goods cite directly to Stanley, as do thirty-five that do not involve Class 5 goods, with those numbers increasing in the last few weeks as the USPTO has seemingly added a sentence to its form database that references the case. It’s our expectation that the citation to Stanley will become a matter of course for the USPTO, especially in Class 5 refusals, and that the number of refusals on FDCA grounds will continue to at its current pace and will not rise further because of Stanley.