Earlier this month, in the case of In re National Concessions Group, Inc., TTAB Ex Parte Appeal No. 87168058, the US Trademark Trial and Appeal Board (“TTAB”) upheld the US Patent and Trademark Office’s (“USPTO”) policy of applying the Controlled Substances Act (“CSA”) to refuse trademark registration for cannabis paraphernalia, even where the trademark application does not explicitly claim cannabis-related goods but the goods are primarily intended to be used with cannabis, and regardless of expanded state cannabis legalization.
The ruling has implications for trademark protection for cannabis related items and arguably for the application of the state law authorization exemption to the federal paraphernalia prohibition. For example, while it may have previously been the case that federal trademark applications relating to cannabis paraphernalia occasionally obtained registration by avoiding mention of cannabis, the USPTO is now more likely to closely scrutinize such applications for possible cannabis connections. And, USPTO trademark examiners who may have previously expressed some confusion in implementing the USPTO’s existing policy in relation to marks claiming cannabis paraphernalia goods (as opposed to cannabis itself) will be more likely to confidently refuse registration of cannabis paraphernalia with this new TTAB precedent to back them up.
In National Concessions, the trademark applicant (“Applicant”) sought registration at the USPTO for the marks BAKKED and a stylized drop design mark of 
The TTAB discussed how longstanding precedent held that in order for a mark to “qualify for a federal [trademark] registration, the use of a mark in commerce must be ‘lawful’ under federal law in the sense that the commerce recited in the application complies with applicable federal laws that regulate the goods.” Under Section 863(a) of the CSA, it remains unlawful to sell or offer to sell, or use the mails or facilities of interstate commerce to transport, drug paraphernalia. Given that marijuana and marijuana-based preparations continue to qualify as controlled substances under the CSA, and that the Applicant’s goods were to be offered for sale and transported in interstate commerce, the TTAB held that the specific drug paraphernalia to be sold under these marks is illegal under the CSA.
Furthermore, the TTAB held that the exemptions of 863(f)(1) and 863(f)(2) of the CSA do not protect the Applicant in this instance. The exemption of 863(f)(1) states that a “person authorized by… state… law to manufacture, possess or distribute” goods is exempt from CSA prohibitions of drug paraphernalia. The TTAB held that even if Applicant’s interpretation of this exemption were correct, the Applicant is still not entitled to registration because the trademark rights sought are not limited to Colorado, but would be nationwide, and Colorado’s laws cannot override the conflicting laws of other states in this regard. Separately, Section 863(f)(2) of the CSA provides an exemption for goods that are of the type traditionally intended for use with tobacco products. In arguing for this exemption, the Applicant provided very limited evidence of tobacco oils being historically used for medicinal reasons. The TTAB held that this was not sufficient to persuade that Applicant’s “essential oil dispensers, sold empty, for domestic use” were traditionally used for tobacco based oils or substances, and further held that the goods in the evidence provided did not resemble Applicant’s goods, such that this exemption does not apply.
The TTAB therefore affirmed the USPTO’s refusal to register the marks at issue.
Please click here for more information on the Dentons US Cannabis group.
Authored by Senior Managing Associate Benjamin Harbuck.