A valid trademark registration requires “lawful use in commerce.” Gray v. Daffy Dan's Bargaintown, 823 F.2d 522, 3 USPQ2d 1306, 1308 (Fed. Cir. 1987). This “lawful” use means that the goods recited in the application complies with applicable federal laws that regulate the goods. In re PharmaCann LLC, 123 USPQ2d 1122, 1123-24 (TTAB 2017); In re JJ206, LLC, 120 USPQ2d 1568, 1569 (TTAB 2016); In re Brown, 119 USPQ2d 1350, 1351 (TTAB 2016) (affirming unlawful use refusals to register marks for marijuana-related products or services where applicant's specimen and website showed that its “retail store services featuring herbs” included the sale of marijuana).

Section 863(a) of the Controlled Substances Act (“CSA”) makes it unlawful to (1) sell or offer for sale, (2) use the mails or any other facility of interstate commerce to transport, or (3) import or export drug paraphernalia. Drug paraphernalia is defined as “any equipment, product, or material of any kind which is primarily intended or designed for use in manufacturing, compounding, converting, concealing, producing, processing, preparing, injecting, ingesting, inhaling, or otherwise introducing into the human body a controlled substance, possession of which is unlawful under [the CSA].” 21 U.S.C. § 863(d); see also In re JJ206, 120 USPQ2d at 1569.

The CSA identifies marijuana and marijuana-based preparations as controlled substances that are unlawful to possess. 21 U.S.C. § 812(a) & (c) (identifying “Marihuana,” by its alternate spelling, as a controlled substance); 21 U.S.C. §§ 841 & 844 (placing prohibitions on the possession of controlled substances). Thus, equipment or products primarily intended or designed for use in ingesting, inhaling, or otherwise introducing marijuana into the human body (e.g., water pipes, roach clips and bongs) constitute unlawful drug paraphernalia under Section 863(d) of the CSA; but for two exemptions set out in Section 863(f) regarding (1) persons authorized by local, state or federal law to manufacture, posses, or distribute such items, or (2) intended for use with tobacco products.

BAKKED Essential Oil Dispenser

National Concessions Group, Inc. (“NCG”), a Colorado company, filed an application for the BAKKED mark used for “Essential oil dispenser, sold empty, for domestic use,” in International Class 21.

The application was refused for not being lawful use in commerce because the primary intended purpose of the goods was to dispense premeasured amounts of cannabis-based oil to a vaping or smoking device for “dabbing.” A relatively new trend, “dabbing” involves extracting and concentrating cannabinoids and terpenes from cannabis into a liquid oil or semi-solid wax; and then heating the concentrate to the point of vaporization rather than combustion in specialized devices, such as “nails” or “dab rigs” (which are attachments to bongs or pipes).

Applicant, on the other hand, argued “that the goods are not drug paraphernalia under the CSA's definition of the term because they are used to dispense essential oil, and in the alternative, that Colorado state law permits Applicant to manufacture and sell the identified goods.”

The Trademark Trial and Appeal Board (“TTAB”) affirmed the refusal, finding that, based on extrinsic evidence including Applicant's and third-party websites that promote Applicant's essential oil dispenser as a “dabbing” tool, an “essential oil dispenser, sold empty, for domestic use” is prohibited drug paraphernalia under Section 863(d) of the CSA. In re National Concessions Group, Inc., Ser. Nos. 87168058 and 87183434, ___ USPQ2d ___ (TTAB May 3, 2023).

Dearth of Tobacco-Based Oils Evidence

The TTAB also noted that the BAKKED application did not specifically identify use with tobacco, traditional tobacco products (tobacco jars, tobacco grinders, rolling paper) or e-cigarettes, as part of its goods. And the TTAB found there was a “dearth of evidence” that “essential oil dispensers, sold empty, for domestic use,” “traditionally” have been used for tobacco-based oils or substances. Cf. Lifted Ltd., LLC v. Novelty Inc., No. 16-cv-03135-PAB-GPG, 2021 WL 4480566, at *3 (D. Colo. Sept. 30, 2021) (denying defendant's “Motion to Decline Subject Matter Jurisdiction for Illegality,” finding that the “Toker Poker” (tamper, cigarette holder and poker) “is an item that is traditionally used for tobacco and, as a result, is not drug paraphernalia pursuant to § 863”).

Authorized in Colorado Only

As for the second exception under Section 863(f)(1) of being authorized under state law to manufacture, possess or distribute the goods, the TTAB held 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,” citing Eteros Techs. USA, Inc. v. United States, 592 F. Supp. 3d 1313 (Ct. Int'l Trade 2022) (finding the authorization inquiry begins anew in the context of importation into another state).

While Applicant may be correct that Colorado has authorized it to manufacture, possess or distribute the goods [see Colorado Constitution Article XVIII, Section 16(f) and C.R.S. 18-18-426 (2018)], such authorization does not extend beyond the borders of Colorado. The Section (f)(1) exemption argued for here is tied to a geographic area— that is, Applicant argues it is authorized by Colorado law to manufacture, possess or distribute the goods in Colorado. But that exemption is insufficient to support the federal trademark registration Applicant seeks, which would be nationwide in effect. Compare Brown, 119 USPQ2d at 1351 (“[T]he fact that the provision of a product or service may be lawful within a state is irrelevant to the question of federal registration.”). We hold that when a Section 863(f)(1) exemption is applicable based on state law, that exemption does not support federal registration.

The TTAB, however, did not address how many other states have similar laws that would authorize such essential oil dispensers. See Keirton USA, Inc. v. United States, 600 F. Supp.3d 1270 (Ct. Int'l Trade 2022) (finding it “lawful for [the plaintiff] to possess and import its merchandise into the State of Washington”; such “merchandise” being “parts and components” used to manufacture the plaintiff's “Twisted Trimmer,” which the plaintiff sells “to companies in the State of Washington that process marijuana plants”).

Nonetheless, the TTAB affirmed the refusal to register because “identified goods constitute drug paraphernalia under the CSA, the exemption in Section 863(f)(1) asserted by Applicant, based on state law, does not support federal registration, and the exemption in Section 863(f)(2) does not apply.”

Thomas P. Howard, LLC is experienced in trademarks nationwide including in Colorado.