Cannabis stakeholders intending to file for federal trademark registration should beware that their applications may be rejected, even if the goods bearing the marks could otherwise be used for federally lawful purposes.

Cannabis laws are constantly changing across the United States, making the legal landscape challenging to navigate. Cannabis stakeholders may ask whether or not their brand name or logo can be registered as a federal trademark when used for cannabis-related merchandise, even though the application for registration does not name any such goods. The recent decision from the Trademark Trial and Appeal Board (“TTAB” or “Board”), In re National Concessions Group, Inc., 2023 U.S.P.Q. 527 (TTAB 2003), provides valuable insight into this question.

The Application

The Applicant, National Concessions Group, Inc., based in Colorado, sought to register the marks “BAKKED,” in standard characters, and a stylized drop design mark for an “essential oil dispenser, sold empty, for domestic use.”

The Examiner refused registration of both marks, finding that the identified goods were unlawful drug paraphernalia under the federal Controlled Substances Act (“CSA”), 21 U.S.C. § 863. In response, the Applicant argued that its goods did not fall within the meaning of “drug paraphernalia” under § 863(d) of the CSA because they are used to dispense essential oil, which is a lawful use. In the alternative, Applicant argued that its goods qualified for an exemption under either (1) § 863(f)(1) of the CSA because Applicant was “authorized by” Colorado state law to “manufacture, possess, or distribute” the goods, or (2) § 863(f)(2) of the CSA because Applicant’s goods are of the type traditionally intended for use with tobacco products.

The TTAB Decision

In affirming the Examiner’s decision, the TTAB first analyzed whether Applicant’s identified goods were indeed prohibited drug paraphernalia under § 863(d) of the CSA. Even though the product was not unlawful as identified in the application, the TTAB noted that the USPTO will inquire about compliance with federal laws "to support a refusal or otherwise facilitate proper examination." Here, the Examiner showed that the primary intended purpose of Applicant’s essential oil dispenser was for use with preparing, inhaling or introducing marijuana into the human body via “dabbing” (i.e., recreational inhalation of extremely concentrated THC), and therefore was prohibited drug paraphernalia, as defined in §863(d) of the CSA. The Examiner submitted content from Applicant’s and third-party websites promoting Applicant’s essential oil dispenser as a “dabbing” tool.  The Applicant’s arguments that the goods could be used for a lawful purpose were rejected.

The holding noted that "federal registration would give Applicant presumptive exclusive rights to nationwide use of its mark in association with the identified goods."  It concluded that "any authorization by Colorado of Applicant’s manufacture, possession or distribution of the goods cannot override the laws of the other states or federal law outside Colorado.” Therefore, the Board found that a Section 863(f)(1) exemption, even if available, did not justify federal registration. It further held that “[w]hile Applicant may be correct that Colorado has authorized it to manufacture, possess or distribute the goods, such authorization does not extend beyond the borders of Colorado” and thus "is insufficient to support the federal trademark registration Applicant seeks, which would be nationwide in effect."

Takeaways

The Board’s precedential decision provides valuable insights for individuals and businesses interested in seeking a federal trademark registration for a mark associated with marijuana and/or cannabis-related goods and services, namely:

• The USPTO refuses registration of marks not used in lawful commerce and will inquire about compliance with federal laws to support a refusal or otherwise facilitate examination.
• Third-party and publicly available materials evidencing the primary use associated with an applied-for mark will be considered for federal registration purposes.
• A particular state's authorization of the manufacture, possession or distribution of marijuana or cannabis products does not entitle a person in that state to a federal trademark registration for related goods/services. 

Our experienced Intellectual Property team at Moses Singer regularly advises clients with respect to branding, trademark clearance and prosecution and will continue to monitor this ever-evolving landscape.