Tuesday, May 09, 2023

Precedential No. 15: Finding Essential Oil Dispensers to be Illegal Drug Paraphernalia, TTAB Affirms Refusal of Two Proposed Marks

The Board upheld the refusals to register the marks BAKKED (in standard characters) and a stylized drop design, for "essential oil dispenser, sold empty, for domestic use," finding that the goods are illegal drug paraphernalia under the Controlled Substances Act (CSA), and therefore the marks are ineligible for registration. The Board rejected applicant's arguments that because the goods are legal under Colorado state law, or are traditionally used with tobacco products, they fall within either of two exemptions set forth in the CSA. In re National Concessions Group, Inc., 2023 USPQ2d 527 (TTAB  2023) [precedential] (Opinion by Judge Cindy B. Greenbaum).

The Board has consistently held that, in order to qualify for registration, the use (or intended use) of a mark must be lawful. 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). Section 863(a) of the 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. 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, except for two exemptions set out in Section 863(f):

  1. any person authorized by local, State, or Federal law to manufacture, possess, or distribute such items; or
  2. any item that, in the normal lawful course of business, is imported, exported, transported, or sold through the mail or by any other means, and traditionally intended for use with tobacco products, including any pipe, paper, or accessory.

The first question for the Board was whether applicant's goods constitute "drug paraphernalia" under the CSA. Although the goods, as identified in the application, are not unlawful, "extrinsic evidence may be used to show such a violation." Brown, 119 USDPQ2d at 1351-52. Examining Attorney Jeffrey J. Look submitted several articles explaining the "dabbing" process as a means of inhaling superheated cannabis concentrates to produce a quicker "high," wherein the concentrate is applied to specialized devices.

The Examining Attorney pointed to applicant's and third-party websites that promote applicant's essential oil dispenser as a "dabbing" tool. Noting that applicant identifies itself as "The Largest Cannabis Company in the US," the Board found that the evidence "amply supports a finding" that applicant's essential oil dispenser 'primarily is intended or designed for use in connection with preparing, inhaling or introducing marijuana into the human body via 'dabbing.'" Consequently, the dispenser comprises prohibited drug paraphernalia as defined in the CSA.

Under the CSA, it is unlawful to sell, offer to sell, transport, import, or export drug paraphernalia in interstate commerce. The evidence showed that applicant uses the mails or other facilities of interstate commerce to transport drug paraphernalia, in violation of the CSA.

The next question was whether applicant's goods qualify for an exemption under the CSA, and if so, whether applicant may obtain registrations for its marks. To repeat, Section 863(f)(1) exempts "any person authorized by local, State, or Federal law to manufacture, possess, or distribute such items," and Section 863(f)(2) exempts "any item that, in the normal lawful course of business is imported, exported, transported, or sold through the mail or by any other means, and traditionally intended for use with tobacco products, including any pipe, paper, or accessory."

Applicant argued that it is a person authorized by state law to manufacture, possess, or distribute its goods. The Board, however, ruled that it did not need to decide the validity of applicant's argument because, in any case, applicant is not entitled to federal registration of its marks. First, the registration applicant seeks is not limited to Colorado, and registration would give it presumptive exclusive rights to nationwide use of its mark. Second, any authorization by the State of Colorado "cannot override the laws of the other states or federal law outside Colorado."

Applicant may be correct that Colorado has authorized it to manufacture, possess or distribute the goods, 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.”).

The Board therefore held that "when a Section 863(f)(1) exemption is applicable based on state law, that exemption does not support federal registration."

Turning to the exemption under Section 863(f)(2), applicant contended that its identified goods could be used to dispense tobacco oil because they are "of the type traditionally intended for use with tobacco products." However, its evidence fell short of convincing the Board that such a tradition existed. The devices that applicant pointed to did not resemble the goods with which applicant uses its mark.

And so, the Board sustained the refusals to register under Section 1 and 45 of the Trademark Act.

Read comments and post your comment here.

TTABlogger comment:Would you call applicant's arguments half-bakked?

Text Copyright John L. Welch 2023.


At 9:07 AM, Anonymous Anonymous said...

These CSA drug paraphernalia rejections seem to turn on how the goods are marketed. If the goods have some lawful uses, then it comes down to how the goods are marketed to consumers. I've had success in the past overcoming this rejection for hydroponic equipment because hydroponics is a well-known growing method for many types of food, and because the marketing was not targeted toward the cannabis community.

In a sense, lighters and spoons can be drug paraphernalia. It all comes down to how (and to whom) they are marketed.

At this point in time, I think the only potentially winning argument for a CSA drug paraphernalia rejection is if you can show that the goods truly are not marketed for illegal purposes.

In this particular case, this application was DOA due to the applicant's website.

At 9:47 AM, Anonymous Anonymous said...

Would the result have been different if the record showed that other states had similar laws to Colorado that authorized essential oil dispensers?

At 8:39 AM, Anonymous Anonymous said...

The applicant is seeking federal trademark protection. If the goods are not lawful under federal law then the application is not going to be approved regardless of how many states have similar laws.


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