cannabis Archives - IP UPDATE

Weeded Out: Mark for Drug Paraphernalia Described as “Essential Oil Dispenser” Refused Registration

Addressing the registrability of marks for cannabis-related products, the Trademark Trial & Appeal Board upheld an Examiner’s refusal to register marks for an “essential oil dispenser” based on extrinsic evidence that the dispenser was primarily used with cannabis extract. In re National Concessions Group, Inc., Ser. Nos. 87168058 and 87183434 (TTAB May 3, 2023) (Thurmon, Greenbaum, English, ATJs) (precedential).

National Concessions sought registration of the word mark BAKKED and a stylized drop logo for an “essential oil dispenser, sold empty, for domestic use” on the Principal Register. The specimen provided by National Concessions illustrated the two marks on an oil dispensing pen identified as “THE DABARATUS.” After reviewing National Concessions’ website—where THE DABARATUS was touted as “THE ALL-IN-ONE TOOL FOR DABBING” that delivers “THE PERFECT DOSE OF CANNABIS EXTRACT”—the Examiner concluded that THE DABARATUS was unlawful drug paraphernalia under the Controlled Substances Act (CSA) and refused registration of the marks. National Concessions appealed on the following three grounds:

The goods are not drug paraphernalia because they are used to dispense essential oil.
The exemption in Section 863(f)(1) of the CSA applies because National Concessions was permitted to sell the goods under Colorado state law.
The exemption in Section 863(f)(2) of the CSA applies because the goods are traditionally intended for tobacco products.

After briefing, the Board suspended the appeal and remanded the applications to the Examiner to request information from National Concessions concerning the legislative histories of Sections 863(f)(1) and (2) of the CSA and the relevant provisions of Colorado state law. The Examiner then issued a Supplemental Final Office Action maintaining the refusal of both marks, and the Board continued proceedings.

The Board began its analysis by outlining the relevant provisions of the CSA, explaining that for a mark to be eligible for registration, the goods must be legal under federal law. Under Section 863(a) of the CSA, it is unlawful to sell “drug paraphernalia,” which is defined as “any equipment, product, or material of any kind which is primarily intended or designed for use in … introducing into the human body a controlled substance, possession of which is unlawful under [the CSA],” including marijuana and marijuana-based preparations. The CSA includes exemptions for any person authorized by local, state or federal law to distribute such items (Section 863(f)(1)) or any item that is traditionally intended for use with tobacco products (Section 863(f)(2)).

The Board first found that National Concessions’ “essential oil dispenser” was prohibited drug paraphernalia under the CSA, even though the product was not unlawful as described in the application. The Board noted that extrinsic evidence, such as an applicant’s marketing materials or product instructions, can be used to show a violation of the CSA even if the application does not reveal a per se violation. After considering National Concessions’ website as well as third-party websites and articles, the Board agreed with the Examiner that National Concessions’ “essential oil dispenser” was primarily intended to dispense cannabis oil for “dabbing”—a method of inhaling superheated cannabis concentrates. The [...]

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Counterfeit Dealer Gets Smoked in Trademark Preliminary Injunction Proceeding

The US Court of Appeals for the Ninth Circuit affirmed a preliminary injunction barring the defendant from selling counterfeit e-cigarette and vaping products bearing the plaintiff’s logo because the plaintiff’s psychoactive products were legal and could support a valid trademark. AK Futures LLC v. Boyd St. Distro, LLC, Case No. 21-56133 (9th Cir. May 19, 2022) (Kleinfeld, Fisher, Bennett, JJ.)

AK Futures manufactures e-cigarettes and vaping products, including delta-8 THC goods marketed under its “Cake” brand. Delta-8 THC is a psychoactive compound found in the Cannabis sativa plant, which encompasses both hemp and marijuana. The compound is similar in effect to delta-9 THC, the primary psychoactive agent in marijuana, but delta-8 THC is typically manufactured from hemp-derived cannabidiol (CBD). The cultivation and possession of hemp was legalized by the Farm Act in 2018.

AK Futures sued Boyd Street Distro, a Los Angeles purveyor of smoke products, for trademark and copyright infringement. Boyd Street sold virtually identical counterfeit Cake-branded e-cigarettes and vaping products containing delta-8 THC. At the time of suit, AK Futures had a registered copyright protecting its Cake logo—a stylized “C” overlaying a two-tier cake—and pending trademark applications for six marks incorporating the word “Cake” or the Cake logo for use in connection with e-cigarette products. The district court granted AK Futures’ motion for preliminary injunction. Boyd Street appealed.

On appeal, Boyd Street conceded the copyright claim, but argued that AK Futures could not own a valid trademark in connection with its e-cigarettes and vaping products because the sale of delta-8 THC was prohibited under federal law. In response, AK Futures argued that the 2018 Farm Act legalized delta-8 THC and products containing the compound.

The Ninth Circuit agreed that AK Futures’ use of the marks in commerce was lawful and could give rise to trademark priority. The Court found that the “plain and unambiguous” text of the Farm Act indicated that delta-8 THC products were lawful. The Farm Act removed “hemp” and “tetrahydrocannabinols in hemp” from Schedule I in the Controlled Substances Act, where “hemp” is defined as “the plant Cannabis sativa L. and any part of that plant, including . . . all derivatives, extracts, [and] cannabinoids . . . with a delta-9 concentration of not more than .3 percent.” The Court noted that the delta-9 THC concentration level was the only statutory metric for distinguishing marijuana from hemp, and that the terms “derivative, extract, or cannabinoid” were substantially broad. The Court thus concluded that “hemp” encompasses delta-8 THC products that contain no more than 0.3% delta-9 THC.

Boyd Street argued that the US Drug Enforcement Agency had interpreted the Farm Act as not applicable to delta-8 THC because it is “synthetically derived” and argued that US Congress never intended the Farm Act to legalize psychoactive substances. The Ninth Circuit perfunctorily dismissed these arguments based on the clear and unambiguous statutory language. Since the Cake-branded products allegedly contained less than 0.3% delta-9 THC, the Court held that AK Futures was likely to succeed in demonstrating that its [...]

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