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By Paul R. Hoffer
A recent ruling from the Trademark Trial and Appeal Board (TTAB) serves as an example for cannabis
businesses when it comes to what extent examiners will go to ensure that applied-for products fall inside
the law – both as it applies to trademarks as well as illegal “paraphernalia.”
In a May 2023 decision determining whether National Concessions Group (National) would receive trademark registrations, the TTAB cited materials from cannabis industry websites and company marketing materials as evidence that the primary use of the product was for ingesting or inhaling cannabis-based substances. While the trademark application noted it was for an “essential oil dispenser, sold empty, for domestic use,” the cited marketing language demonstrated otherwise. And while National appealed the Examining Attorney’s decision to the TTAB, the ruling underscores how deeply the United States Patent and Trademark Office’s Examining Attorneys are allowed to review and evaluate trademark applications for products believed to be related to cannabis. National Concessions Group is a cannabis company in Colorado, where it legally sells cannabis and cannabis paraphernalia.
What Happened
National filed two trademark applications at the United States Patent and Trademark Office (USPTO)
seeking federal registration for the word BAKKED and for a Drop Design for its “essential oil dispenser, sold empty, for domestic use” product. National alleged that these marks were first used in interstate commerce in November 2016. After being filed, the applications were assigned to an Examining Attorney, whose job is to review trademark applications to ensure they meet all legal requirements, including that the trademark is registrable.
During the review process, the Examining Attorney refused registration for each mark, claiming that National had no lawful use in commerce of the trademarks. The Examining Attorney concluded that the applied-for products, which bear the trademarks, violate federal law pursuant to The Controlled Substances Act’s (CSA) prohibition against the sale and distribution of marijuana and drug paraphernalia. The refusals were supported by extrinsic internet evidence from websites selling, promoting and discussing National’s product as a tool for “dabbing” cannabis-based oils. “Dabbing” is heating cannabis concentrate in an oil or wax form to create vapor, which is then inhaled.
To support the finding that National’s products are drug paraphernalia, the Examining Attorney relied upon the term “primarily” found in the definition of “drug paraphernalia” in the CSA. The Examining Attorney further claimed that the supporting internet evidence showed that the primary use of the applied-for product was for ingesting or inhaling cannabis-based substances. Due to this primary use of the product, there was no lawful use in interstate commerce and registration was refused. National could not overcome the Examining Attorney’s refusals and filed an appeal with the TTAB.
The Appeal
The TTAB is a neutral body at the USPTO that functions like a court and is authorized to determine whether an applicant or registrant has the right to register a mark or to retain a challenged registration. The main categories of proceedings that the TTAB handles are appeals, oppositions and cancellations. In its appeal of the refusals to register its applications to the TTAB, National argued:
- The product was wrongly characterized as drug paraphernalia; and
- Even if its product is used as drug paraphernalia, CSA exemptions applied because of state-level legality and a history of use of the product with traditional tobacco.
The TTAB denied the appeal and upheld the Examining Attorney’s refusals. On Appeal, National argued that the CSA exemptions applied because it is authorized by state law to manufacture, possess, and/or distribute cannabis products. National also argued that the product in question is used, and had a history of use, with legal tobacco and qualifies for exemptions under the CSA.
In its ruling, the TTAB stated that National’s product, as identified in the applications, was not unlawful under the CSA. However, the TTAB also determined that extrinsic Internet evidence can be used to establish a CSA violation. This allowed the TTAB to rely on the Examining Attorney’s extrinsic internet evidence, which included third-party articles, National’s own website and marketing materials, and third- party websites that promoted and described the Applicant’s product as a dabbing tool. Based upon that evidence, the TTAB concluded that there was no evidence to support a decision that the applied-for good was primarily intended or designed for a use other than as a cannabis dabbing tool.
The TTAB next determined that were no exceptions to the CSA available to National to evade the prohibition on drug paraphernalia. The CSA exception for products that are legal under state law does not apply to federal trademark registration as federal registration provides protection nationwide. The exception only allows for the manufacture of paraphernalia within a state’s borders in which marijuana is legal.
Finally, the TTAB turned to the exception for products that are traditionally intended for use with traditional
tobacco products. Applicant submitted evidence that tobacco oils are and have been sold in bottles that are identified for tobacco oil or tar. However, the TTAB deemed this exception inapplicable here because National’s evidence of product posts from third party websites was insufficient to establish that its “essential oil dispenser, sold empty, for domestic use” product has traditionally been used for tobacco-based oils.
As the TTAB found that neither CSA exception applied, National’s product was deemed drug paraphernalia as defined by the CSA and the trademarks were refused registration.
Key Takeaways
With the smoke settled, this precedential opinion demonstrates how the USPTO Examining Attorneys are allowed to review and evaluate trademark applications for products believed to be related to cannabis. In its decision, the TTAB relied heavily upon evidence from third-party websites, including leafly.com, weedmaps and hightimes.com, as well as other cannabis related websites and articles. The decision ultimately demonstrates the wide variety of sources Examining Attorneys will use to present evidence that an applied-for product falls awry of the law.
Cannabis companies need to be attentive to how they promote and market their products – not only on their own websites but also on other third-party sites. With the Examining Attorney’s ability to comb the internet for evidence in support of CSA-premised refusals, it is crucial to thoroughly review all promotions, marketing materials and product descriptions if federal trademark registration is to be sought.
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