What is a trademark consent agreement?
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.
When is it appropriate to seek a consent agreement?
A consent agreement is typically sought by an applicant facing a rejection in a pending trademark application on the grounds that the applicant’s mark is confusingly similar to a third party’s trademark that is either registered or pending with an earlier filing date. In such circumstances, it might make sense to explore a consent agreement with the third party especially if the applicant can show priority of use (earlier use) than the claimed dates of first use in the third party’s trademark filing.
Why would trademark 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 – i.e., the applicant’s earlier use provides grounds for canceling the blocking trademark registration assuming the registration is not over 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 to entering a consent agreement simply on the basis of leverage. It helps to show differences in the respective marks, which primarily include differences in the marks themselves (appearance, sound/pronunciation, spelling, meaning) and in the respective goods/services.
When seeking consent from the owner of a registered trademark, 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?
A well-drafted consent agreement should spell out the dissimilarities between the respective marks. Though not required, it would nonetheless be helpful to state that the parties would take steps to minimize confusion or to resolve any actual confusion should it occur. The agreement can also detail 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).
The consent agreement may also contain provisions requiring each party to not interfere with any future filings by the other party for a similar mark on certain goods/services.
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 examining attorney may deem a submitted agreement as a “naked consent agreement” which contains 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.
To minimize the risk of naked consent, it would be best to memorialize the reasons why the parties believe there is no likelihood of confusion. Furthermore, it wouldn’t hurt to include a provision that the parties agree to make efforts to prevent confusion and cooperate and take steps to avoid any confusion that may arise in the future.
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 costs to be towards the lower end of the range.
- Confirm trademark priority and develop reasons why the registration owner should cooperate. Cost: $500;
- Contact the registration owner or their attorney to explain why they should sign a consent agreement. Cost: $500 to $1,500;
- If the registration owner is willing, draft consent agreement, present draft to the registration owner, and make any revisions. Cost: $1,000 to $2,500;
- Submit signed consent agreement to USPTO. Cost: $500.
If the registration owner is unwilling to cooperate at first, additional measures may be required to convince them to consent. Such measures may including filing a trademark cancellation, expungement or reexamination. Such actions would incur additional costs.
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