NL LLC

Trademark Trial and Appeal Board

Sep 25, 2020

87864999 (T.T.A.B. Sep. 25, 2020)

This Opinion is Not a
Precedent of the TTAB

Mailed: September 25, 2020

UNITED STATES PATENT AND TRADEMARK OFFICE
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Trademark Trial and Appeal Board
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In re NL LLC
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Serial No. 87864999
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Paul W. Kruse of Bone McAllester Norton PLLC,
for NL LLC.
Elle Marino, Trademark Examining Attorney, Law Office 121,
Richard White, Managing Attorney.
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Before Thurmon, Deputy Chief Administrative Trademark Judge,
Greenbaum and Adlin, Administrative Trademark Judges.

Opinion by Greenbaum, Administrative Trademark Judge:
I. Background
NL LLC (“Applicant”) seeks registration on the Principal Register of the mark
NATURAL LEAF CBD LIVE BETTER NATURALLY and Design (NATURAL LEAF
CBD disclaimed), displayed as , for
dietary and nutritional supplements infused with CBD
hemp oil extracts derived from industrial hemp with a
Serial No. 87864999
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delta-9 tetrahydrocannabinol (THC) concentration of not
more than 0.3 percent on a dry weight basis; all the
foregoing made in whole or in substantial part of natural
ingredients, in International Class 5.1
The record shows that “CBD” is an abbreviation for “cannabidiol,” a chemical
component of the cannabis plant that is regulated under the Food, Drug & Cosmetics
Act (“FDCA”) as a drug. May 14, 2019 Office Action, TSDR 12-35; January 1, 2020
Final Office Action, TSDR 2-12 (material from the U.S. Food and Drug
Administration “FDA”). The FDCA prohibits “[t]he introduction or delivery for
introduction into interstate commerce of any 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 ….” 21 U.S.C.
§ 331(ll).2
The Trademark Examining Attorney has refused registration of Applicant’s mark
for lack of lawful use in commerce under Sections 1 and 45 of the Trademark Act, 15
U.S.C. §§ 1051 and 1127, alleging the identified goods, which contain CBD, are per
se violations of both (1) the FDCA, 21 U.S.C. §§ 321(ff) and 331(ll), and (2) the federal
Controlled Substances Act (“CSA”), 21 U.S.C. §§ 812(c) and 841(a)(1).

1 Application Serial No. 87864999 was filed on April 5, 2018, based Applicant’s claim of first
use anywhere and use in commerce since at least as early as April 4, 2018. The application
includes the following description of the mark: “The mark consists of the design of a stylized
leaf of white superimposed over a circle of green above the words ‘NATURAL LEAF CBD’ in
gray stacked above a line of green and further stacked above the words ‘LIVE BETTER
NATURALLY’ in gray.” The colors green, white and gray are claimed as a feature of the
mark.
2 Under Section 321(ff) of the FDCA, “a dietary supplement shall be deemed to be a food
within the meaning of this chapter.”
Serial No. 87864999
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After the Examining Attorney made the refusal final, Applicant appealed to this
Board. We affirm the refusal to register because Applicant’s use of its mark on its
identified goods is a per se violation of the federal FDCA and thus the mark is not
eligible for federal registration. We do not reach the issue of whether such use also is
a violation of the CSA.
II. Analysis
Under Section 1(a) of the Trademark Act, a mark may not be registered unless it
is “used in commerce.” Section 45 of the Trademark Act defines “use in commerce” as
“the bona fide use of a mark in the ordinary course of trade.” In addition, “[t]he word
‘commerce’ means all commerce which may lawfully be regulated by Congress.” Id.
“A valid application cannot be filed at all for registration of a mark without ‘lawful
use in commerce….’” Gray v. Daffy Dan’s Bargaintown, 823 F.2d 522, 3 USPQ2d 1306,
1308 (Fed. Cir. 1987). The Board also has “consistently held that, to qualify for a
federal … registration, the use of a mark in commerce must be ‘lawful.’” In re
PharmaCann LLC, 123 USPQ2d 1122, 1123-24 (TTAB 2017) (quoting In re JJ206,
LLC, 120 USPQ2d 1568, 1569 (TTAB 2016) and In re Brown, 119 USPQ2d 1350, 1351
(TTAB 2016) (affirming unlawful use refusals to register marks for marijuana-related
products or services)). See also Coahoma Chem. Co., Inc. v. Smith, 113 USPQ 413,
418 (Comm’r. Pat. 1957), aff’d on other grounds, 264 F.2d 916, 121 USPQ 215 (CCPA
1959) (“[U]se of a mark in connection with unlawful shipments in interstate
commerce is not use of a mark in commerce which the Patent [and Trademark] Office
may recognize.”).
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Thus, for a mark to be eligible for federal registration, “‘any goods … for which the
mark is used must not be illegal under federal law.’” PharmaCann, 123 USPQ2d at
1124 (quoting JJ206, 120 USPQ2d at 1569 and Brown, 119 USPQ2d at 1351). The
USPTO generally does not refuse registration based on unlawful use in commerce
unless either
(1) a violation of federal law is indicated by the application
or other evidence, such as when a court of a federal agency
responsible for overseeing activity in which the applicant
is involved, and which activity is relevant to its application,
has issued a finding of noncompliance under the relevant
statute or regulation, or (2) when the applicant’s
application-related activities involve a per se violation of a
federal law.
PharmaCann, 123 USPQ2d at 1124 (quoting Brown, 119 USPQ2d at 1351).
This appeal involves claimed per se violations of the FDCA (and the CSA), based
upon the identification of goods: “dietary and nutritional supplements infused with
CBD hemp oil extracts derived from industrial hemp with a delta-9
tetrahydrocannabinol (THC) concentration of not more than 0.3 percent on a dry
weight basis; all the foregoing made in whole or in substantial part of natural
ingredients.” See JJ206, 120 USPQ2d at 1569 (affirming refusals to register where
the applicant “explicitly identifies its goods as vaporizing devices for cannabis or
marijuana.”).
We find the identified goods per se unlawful under Sections 321(ff) and 331(ll) of
the FDCA because: Applicant’s goods are food to which has been added a drug (CBD);
substantial clinical investigations of CBD have been instituted, and the existence of
these investigations has been made public; and there is no evidence of record that
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CBD was marketed in food before the substantial clinical investigations of CBD were
instituted. May 14, 2019 Office Action, TSDR 12-35; January 1, 2020 Final Office
Action, TSDR 2-12. See In re Stanley Bros. Soc. Enters., LLC, 2020 USPQ2d 10658,
*11-16 (TTAB 2020). Therefore, there can be no lawful use of the mark in commerce.
Cf. JJ206, 120 USPQ2d at 1569 (“where the identified goods are illegal under the
federal Controlled Substances Act (CSA), the applicant cannot use its mark in lawful
commerce”).
Applicant does not argue otherwise.3 Rather, Applicant claims that the Lanham
Act does not specify that the requisite use in commerce be lawful, and that Trademark
Rule 2.69, 37 C.F.R. § 2.69, does not “provide a statutory basis for the Office to refuse
federal registration on the Principal Register to a mark that otherwise meets all the
statutory requirements for registration currently set forth in the Lanham Act[.]” App.
Br., 4 TTABVUE 3.
As a corollary, Applicant contends that it uses its mark in commerce that is legal
under the laws of the State of Colorado, where it is based, and that such use comports
with all requirements for federal registration. According to Applicant,
[t]his idea of “compliance with other laws” as a registration
requirement flows exclusively from 37 C.F.R. § 2.69 and
the Office’s interpretation thereof, not the Lanham Act
itself. Does the Office really have the power to refuse to
register marks to applicants in the many states (and the
District of Columbia) that currently have laws legalizing

3 Indeed, we read Applicant’s Appeal Brief as conceding that sale of the identified goods in
interstate commerce would be per se unlawful under federal law. For the sake of
completeness, we also hold that Applicant waived its right to challenge the Examining
Attorney’s determination that sale of the goods in interstate commerce would be per se
unlawful.
Serial No. 87864999
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industrial hemp products in one form or another? Can the
Office really trump all these state laws based only on 37
C.F.R. § 2.69? Without a clear statutory basis to refuse
registration for noncompliance with other laws, the answer
must be “no.” App. Br., 4 TTABVUE 4.
Applicant concludes: “While the United States Congress has the power to make
‘lawful use in commerce’ a requirement for registration, neither the Office nor the
Board has the power to do so absent a congressional amendment to the Lanham Act
to do so.” App. Br., 4 TTABVUE 7.
Applicant has cited no authority for its arguments, which directly contradict long-
standing precedent from federal courts and the Board, and to the extent Applicant
challenges the supremacy of federal law over state laws, the U.S. Constitution.
We turn first to Applicant’s “lawful use” arguments. Federal circuit courts have
expressly disagreed with Applicant’s position in upholding the USPTO’s longstanding
lawful use requirement, discussed above. Notably, in CreAgri, Inc. v. USANA Health
Scis., Inc., 474 F.3d 626, 81 USPQ2d 1592 (9th Cir. 2007), the Court cited with
approval In re Stellar Int’l Inc., 159 USPQ 48 (TTAB 1968), where the Board
recognized that Section 1 of the Trademark Act does not refer to “lawful commerce,”
the same point Applicant makes here, but explained that “[i]t seems evident that the
term ‘commerce’ whenever and wherever used in the trademark statute must
necessarily refer to ‘lawful commerce,’ and that the statute 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.”
Stellar, 159 USPQ at 51.
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In CreAgri, the Court agreed with the USPTO’s policy “that use in commerce only
creates trademark rights when the use is lawful[,]” and held that “only lawful use
in commerce can give rise to trademark priority.” CreAgri, 81 USPQ2d at 1591
(emphasis in italics in original). The Court then explained the “twofold” “rationale for
this rule”:
First, as a logical matter, to hold otherwise would be to put
the government in the “anomalous position” of extending
the benefits of trademark protection to a seller based upon
actions the seller took in violation of that government’s own
laws. See In re Stellar, 159 USPQ at 51. It is doubtful that
the trademark statute – passed pursuant to Congress’s
power under the Commerce Clause – “was … intended to
recognize…shipments in commerce in contravention of
other regulatory acts promulgated [by Congress] under
[that same constitutional provision.” Id. Second, as a policy
matter, to give trademark priority to a seller who rushes to
market without taking care to carefully comply with the
relevant regulations would be to reward the hasty at the
expense of the diligent.
CreAgri, 81 USPQ2d at 1595.
The 10th Circuit agrees with the 9th and Federal Circuits that trademark rights
may only be obtained if “the name was lawfully used in commerce.” United
Phosphorus, Ltd. v. Midland Fumigant, Inc., 205 F.3d 1219, 53 USPQ2d 1929, 1932
(10th Cir. 2000) (citing Section 45 of the Trademark Act, Gray v. Daffy Dan’s
Bargaintown, 3 USPQ2d at 1308, and Clorox Co. v. Armour-Dial, Inc., 214 USPQ 850,
851 (TTAB 1982) (“‘use in commerce’ means a ‘lawful use in commerce’”)).4

4 The Board cited Clorox with approval in In re Midwest Tennis & Track Co., 29 USPQ2d
1386, 1386 n.2 (TTAB 1993).
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Next, Applicant’s argument that Trademark Rule 2.69 does not provide a
statutory basis for the USPTO to refuse registration to a mark that “otherwise meets
all the statutory requirement for registration currently set forth in the Lanham Act”
App. Br., 4 TTABVUE 3, begs the question. As we just discussed, Section 1(a) of the
Trademark Act, which is the statutory basis for registration here, requires “use” of
the mark “in commerce,” and the Federal Circuit and other Courts of Appeal have
agreed with and essentially adopted the USPTO’s interpretation and policy that the
“use” must be “lawful use.” Section 1(a) of the Trademark Act also requires an
applicant to comply with “such rules or regulations as may be prescribed by the
Director.” Consistent therewith, the USPTO promulgated Trademark Rule 2.69,
which provides that “[w]hen the sale or transportation of any product for which
registration is sought is regulated under an Act of Congress, the Patent and
Trademark Office may make appropriate inquiry as to compliance with such Act for
the sole purpose of determining lawfulness of the commerce recited in the
application.” As the Board explained in Stellar, 159 USPQ 48, 50-51 (TTAB 1968):
[i]t is obvious that if an inquiry can be made in this
direction, the Patent Office should, in the event that it is
ascertained that an applicant has not complied with any
such regulatory act, be able to take appropriate action, to
refuse registration until and when compliance is effected.
If action can not be taken under these circumstances, Rule
2.69 would be ineffective and an inquiry thereunder would
be nothing more than a waste of time and effort. It is
illogical and incongruous to say, as applicant has done, that
inquiry can be made, but if something is forthcoming as a
result thereof which would render the subject application
void ab initio, conveniently forget about it and let the
information “slumber in the archives of the Patent Office.”
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Finally, we reject Applicant’s argument that the USPTO cannot require lawful
use in commerce because it conflicts with state law.5 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. See U.S. Const. Art. VI, Cl. 2; Gonzales v. Raich,
545 U.S. 1, 27, 29 (2005) (“limiting the activity to marijuana possession and
cultivation in accordance with state law cannot serve to place respondents’ activities
beyond congressional reach. The Supremacy Clause unambiguously provides that if
there is any conflict between federal and state law, federal law shall prevail.”). Cf.
Brown, 119 USPQ2d at 1351 and JJ206, 120 USPQ2d at 1571 (federal CSA is
conclusive on the lawfulness issue for purposes of obtaining a federal trademark
registration).
III. Conclusion
Because Applicant’s identified goods are per se illegal under the FDCA,
Applicant’s use of the mark on these goods is unlawful, and cannot serve as the basis
for federal registration under Sections 1 and 45 of the Trademark Act.

5 There is no dispute that Applicant’s goods are being used in interstate commerce, although
Applicant raises this as an issue in its brief. Compare App. Br., 4 TTABVUE 5 and Ex. Atty.
Br., 6 TTABVUE 7.
Serial No. 87864999
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Decision: The refusal to register Applicant’s mark is
affirmed.