The Trademark Trial and Appeal Board (“TTAB”) at the United States Patent and Trademark Office (“USPTO”) recently issued a precedential opinion concerning the registration of marks used in connection with goods deemed “drug paraphernalia” under the Controlled Substances Act (“CSA”). The decision, In re Abax Distributing LLC, involved two trademark applications for the mark BAKKED and a stylized teardrop logo, both filed by Abax Distributing LLC (“Applicant”) for use with “essential oil dispenser[s], sold empty, for domestic use.” The TTAB affirmed the USPTO Examining Attorney’s refusal to register the marks on the grounds that the goods were not offered in lawful commerce under the CSA.
The TTAB began by examining whether the Applicant’s identified goods constituted drug paraphernalia under the CSA. Looking at internet evidence from the Applicant’s website and third-party sites, the TTAB concluded that the dispensers were designed for use with marijuana concentrates. It found that the Applicant’s product was a device specifically designed and primarily intended for “dabbing,” which is a means of vaporizing cannabis concentrates like oils and waxes. The TTAB then considered whether the Applicant was engaged in activities prohibited under Section 863(a) of the CSA. It found that the Applicant was selling or offering to sell drug paraphernalia, and transporting drug paraphernalia in interstate commerce—each a violation.
Next, the TTAB examined whether the Applicant’s goods qualified for an exemption under Section 863(f) of the CSA, and if so, whether the exemption provided a basis for a federal trademark registration. The TTAB addressed two exemptions under Section 863(f): (a) authorization under local, state, or federal law, and (b) traditional tobacco products.
The Applicant argued that it was authorized by Colorado state law to manufacture or distribute the goods, thus exempting it from the CSA’s drug paraphernalia provisions. The TTAB held that even if the Applicant’s interpretation of the Section 863(f)(1) exemption was correct, it would not entitle the Applicant to the registration it sought. It reasoned that a federal registration would provide the Applicant with nationwide exclusive rights to use its mark. Any authorization by Colorado could not override the laws of other states or federal law outside Colorado, it concluded.
Turning to the exemption for traditional tobacco products, the Applicant argued that essential oil dispensers could be used to dispense tobacco oil, and thus qualified for an exemption under Section 863(f)(2) of the CSA. However, the TTAB found that the evidence did not support this argument, and that the primary purpose of Applicant’s products was not for dispensing tobacco oils.
The TTAB ultimately concluded that the Applicant could not obtain federal registrations for its marks because the identified goods constituted drug paraphernalia under the CSA, the exemption based on state law did not support federal registration, and the exemption for traditional tobacco products did not apply.
This decision signals a clear stance from the TTAB on the limitations of federal trademark protection for products and services related to cannabis and drug paraphernalia. For brand owners and their counsel operating within the cannabis industry, this precedential opinion emphasizes the importance of understanding potential limitations on federal trademark protection. They should also be aware that the USPTO may look to third-party materials to determine the actual nature of the goods—not just the materials included in the application. Businesses in this industry may need to rely on alternative strategies for brand protection, such as securing state-level trademark registrations. While these measures may not offer the same level of protection as a federal trademark registration, they can provide a degree of security in the absence of federal recognition for cannabis-related products and services that fall outside the 2018 Farm Bill’s legalization of certain hemp products.