When does a trademark consent agreement make sense?
A trademark consent agreement is a written agreement between two trademark owners stating that their respective marks are not confusingly similar. Also known as a trademark coexistence agreement, the discussion of coexistence often arises in the context of settling a trademark dispute (such as a TTAB trademark opposition or cancellation), or refuting a likelihood of confusion rejection by the USPTO in a trademark application.
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Why consider trademark coexistence?
A consent agreement is typically sought by an applicant whose trademark application has been rejected for being confusingly similar to a third party’s trademark. The blocking trademark is typically registered. In some cases, the third party’s trademark filing may be a pending application with an earlier filing date.
In such circumstances, a consent agreement with the third party might make sense especially if the applicant can show trademark priority. For example, the applicant might have trademark proirity if they can show earlier use than the claimed dates of first use in the blocking trademark filing.
What would make trademark registration owners agree to coexist?
It’s not uncommon for owners of registered trademarks to feel less than charitable in granting consent, and understandably so. They went through all the effort and cost of registering their trademarks, so why should they allow a subsequent applicant to register a potentially similar mark?
The key to persuasion lies in the leverage held by the applicant. If the applicant’s earlier use provides grounds for canceling the blocking trademark registration, then a registration might be motivated to sign a consent agreement to avoid the risk and costs of a cancellation proceeding. This is assuming the registration is less than five years old. Priority of use is also a basis for opposing a pending trademark application during the opposition period.
That being said, it should not be assumed that trademark registration owners will easily concede. Leverage alone might not be enough to compel coexistence. When seeking consent from the trademark registration owner, the biggest leverage will typically be the priority of the applicant (i.e., earlier use of the trademark by the applicant seeking consent).
What should a consent agreement include?
Though not exclusive, a well-drafted consent agreement should include at least the following key factors (see Bongrain Int’l (Am.) Corp. v. Delice de France Inc., 811 F.2 1479, 1485 (Fed. Cir. 1987):
- dissimilarities between the respective marks;
- if the products travel in separate trade channels, a clear indication of this fact;
- steps the parties would take to minimize confusion or to resolve any actual confusion should it occur;
- restrictions or specific manners of use to be undertaken by each side (e.g., each party would use only a particular mark with certain words and/or a logo in connection with only certain goods/services);
- provisions requiring each party to not interfere with any future filings by the other party for a similar mark on certain goods/services
- whether the marks have been used for a period of time without evidence of actual confusion.
Depending upon the circumstances, the consent agreement may also state other marketplace realities about the lack of any actual or potential confusion between the respective trademarks.
How much weight does the USPTO give to consent agreements?
Consent agreements can be highly effective in countering a rejection based on likelihood of confusion because the USPTO is supposed to give great weight to such coexistence agreements. See In re American Cruise Lines, Inc., 128 USPQ2d 1157 (TTAB 2018).
The risk is that the USPTO trademark examining attorney may deem a submitted coexistence agreement as a “naked consent agreement.” In other words, the trademark examiner may feel that a particular consent agreement may be insufficient to overcome a likelihood of confusion rejection. For example, defective consent agreements might contain little more than one party’s consent to registration of the other party’s mark and a general statement that there is no likelihood of confusion.
For example, the USPTO held that the consent agreement submitted in the GASPARILLA case was insufficient.
How much does a consent agreement cost?
The cost of a consent agreement depends on the willingness of the registration owner. If the registration owner is very cooperative, then expect lower costs.
If the registration owner is unwilling to cooperate at first, additional measures may be required to convince them to consent. Such measures may include filing a trademark cancellation, expungement or reexamination.
