In a recent ruling, BBK Tobacco & Foods LLP v. Cent. Coast Agric., Inc., the U.S. Court of Appeals for the Ninth Circuit affirmed a district court’s decision to cancel four trademark applications pending at the U.S. Patent and Trademark Office (USPTO). These applications were challenged on the basis that the trademark owner lacked an actual intent to use the marks. Significantly, the Ninth Circuit determined that district courts have the authority to cancel a trademark application pending at the USPTO.

BBK Tobacco distributes and sells smoking-related products, including cigarette rolling papers, lighters, tobacco shredders, tobacco grinders, and cigarette rolling trays, with its trademarked “RAW” branding. Central Coast Agriculture (CCA) sells concentrate and pre-rolled cannabis products branded with labels bearing the designation “Raw Garden.” BBK Tobacco filed suit against CCA in the District of Arizona, alleging CCA’s use of “Raw Garden” on the labels of its cannabis products infringed BBK Tobacco’s RAW trademarks. Among other relief requested, BBK Tobacco sought a petition to void several CCA trademark applications because CCA could not produce any evidence of its intention to use the subject trademarks in connection with the goods identified in applications, which the district court granted.

CCA appealed the district court’s summary judgment ruling that granted BBK Tobacco’s petition to invalidate four of CCA’s intent-to-use trademark applications. The Ninth Circuit acknowledged that this case is the first in which it had an opportunity to address whether district courts have the authority to cancel a trademark application pending at the USPTO and if a lack of an actual intent to use the mark was a valid basis for such cancellation. Ultimately, the appellate court determined both are proper, and affirmed the lower court’s summary judgment ruling.

In reaching its conclusion on the issue of the cancellation petition, the Ninth Circuit held that when a lawsuit involves a registered trademark, a district court has the authority to consider challenges to the trademark applications of parties in the litigation. The Ninth Circuit also noted that permitting a district court to adjudicate issues relating to trademark applications when an action already involves a registered mark promotes the interests of judicial economy by allowing resolution of all registration disputes in a single proceeding.

As to whether a lack of an actual intent to use a mark in commerce is a valid basis to cancel a trademark application pending at the USPTO, the Ninth Circuit explained that the relevant statutory text made clear that such basis is a ground on which a party may oppose a trademark application. The Ninth Circuit became the fourth circuit court, joining the Sixth Circuit, the Federal Circuit, and the D.C. Circuit, along with the Trademark Trial and Appeal Board, to rule that a lack of an actual intent is a proper statutory ground on which to challenge a trademark application.