A recent lawsuit filed in Washington state court alleging trademark infringement by AmerikanWeed, Palmer v. Komm, illustrates the importance of protecting intellectual property in the cannabis industry.[1]
Because the plaintiffs obtained a Washington state trademark registration, their recourse is limited to that state. To have recourse against infringement outside Washington, a federal registration may provide additional remedies — if it can be obtained.
With that in mind, a recent precedential decision by the Trademark Trial and Appeal Board highlights some of the pitfalls to avoid if pursuing federal registration.
The Potential Benefits of a Trademark
Trademark owners can take action against competitors using names and logos that consumers may find confusingly similar. Securing a federal registration can and may impede competitors from trading on the hard-earned goodwill and brand loyalty of a trademark owner across the nation.
However, in In re: National Concessions Group Inc., the TTAB held that state legalization, on its own, does not overcome the Controlled Substances Act’s barrier to registering a federal trademark for cannabis-related drug paraphernalia.[2]
CSA Is a Hurdle to Registration
The National Concessions Group applied to register two of its trademarks, “BAKKED” and the design mark shown below,[3] with the U.S. Patent and Trademark Office for use with “essential oil dispenser[s], sold empty, for domestic use.”[4]
The applications were refused on the grounds that the goods were illegal drug paraphernalia under the CSA.[5]
Trademark registrations cannot be granted on illegal goods. The USPTO has issued guidance that trademarks for cannabis-related goods meeting the exemptions in the 2018 Farm Bill may be registered in limited circumstances.[6][7]
Separately, the CSA includes exemptions, including Section 863(f)(1), known as the authorization exemption, which allows any person authorized by local, state or federal law to manufacture, possess or distribute drug paraphernalia; and Section 863(f)(2), known as the tobacco exemption, which exempts any item that is traditionally intended for use with tobacco products, including any pipe, paper or accessory.
NCG did not argue that its goods were exempt from the CSA under the 2018 Farm Bill. Instead, NCG argued that the athorization exemption and tobacco exemption applied.[8]
The TTAB disagreed and held that state legalization of cannabis did not provide a basis for federal trademark registration.[9]
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[1] Complaint at 9-10, Palmer, et al. v. Komm et al., No. 23-2-11243-1 SEA (Wa. Sup. Ct. filed Jun 21, 2023).
[2] In re Nat’l Concessions Grp., Inc ., 2023 WL 3244416, *1 (T.T.A.B. May 3, 2023).
[3] Serial Numbers 87168058 and 87183434, respectively.
[4] Nat’l Concessions Grp., 2023 WL 3244416, at *1.
[5] See 21 U.S.C. §863.
[6] USPTO Examination Guide 1-19, 1-2 (May 2, 2019) (“the 2018 Farm Bill potentially removes the CSA as a ground for refusal of registration, but only if the goods are derived from ‘hemp’) (emphasis in original). However, to benefit from the Farm Bill the priority date of the application must be amended to December 20, 2018 or later. Id.
[7] 7 U.S.C. 5940(a)(2) (exempting products derived from hemp or with a THC “concentration of not more than 0.3 percent on a dry weight basis”).
[8] Nat’l Concessions Grp., 2023 WL 3244416, at *1.
[9] Id., at *8.