Consent Agreements May Be Rejected by the USPTO
Consent Agreements are written documents entered into by two parties wherein one party agrees to the registration of a second party's trademark at the United States Patent & Trademark Office ("USPTO"). See our webpage entitled, Resolving Trademark Disputes Without Litigation, to better understand the options available to a trademark owner should a dispute arise and the parties want to amicably resolve the matter without litigation. If an applicant is refused registration under Section 2(d) of the Trademark Act on the grounds of likelihood of confusion, a Consent Agreement may be entered into and submitted to possibly overcome the refusal. However, even though one party agrees in writing to the other party registering a similar mark, the Examining Attorney may still refuse registration due to confusion to the public.
In a recent case before the Trademark Trial And Appeal Board (the "Board"), In re A-Plant 2000 ApS, Serial No. 79162833 (August 25, 2017) [not precedential], the Board affirmed the refusal based on likelihood of confusion even though the parties had entered a Consent Agreement. The Board cited the following factors to be considered in weighing a Consent Agreement: (1) is there an agreement between the parties; (2) does the agreement clearly set forth that the goods travel in separate trade channels; (3) did the parties agree to restrict fields of use; (4) did the parties state in detail how confusion will be avoided in the future and how they will cooperate and (5) has there been use of the marks in commerce for a period of time without evidence of actual confusion.
To avoid what is referred to as a "naked" Consent Agreement, the parties must be sure to set forth reasons why they believe there is no likelihood of confusion between the sources of the marks. In addition, the parties must describe the actual steps that will be taken to avoid consumer confusion. A naked consent will carry little weight. Conversely, a detailed consent should carry substantial weight. See In re E. I. du Pont de Nemours & Co., 476 F.2d 1357, 177 USPQ 563, 567 (CCPA 1973). See also, In re Four Seasons Hotels, Ltd., 987 F.2d 1565, 26 USPQ2d 1071 (Fed. Cir. 1993).
The reasoning for giving great weight to a detailed consent is that business owners and owners of valuable trademark rights have no interest in causing public confusion. In fact, owners of trademarks will typically make efforts to protect their intellectual property rights and only consent to registration of a similar mark if it will not damage the business in any manner. DuPont, holds that a consent agreement is another factor in the likelihood of confusion analysis and it may or may not tip the scales in favor of registration. All the evidence must be examined and considered in a likelihood of confusion evaluation.
The Consent Agreement in In re A-Plant 2000 ApS had several defects. Although, there was an agreement to a restriction in use by the applicant, the restriction was not reflected in the identification. Also, there is no statement in the Consent Agreement that the parties are restricted to separate trade channels and consumers. Moreover, the Agreement makes it evident that both parties' goods will be sold in the same markets to the same purchasers.
Lastly, the parties did not set forth any specific measures to prevent consumer confusion. An example of a preventative measure would be detailing the distinctive packaging each party would use for its respective goods or requiring different signage be displayed in association with the sale of the goods. Simply stating that the parties would cooperate to avoid confusion is too vague especially since the similarities between the marks were great and the goods were identical and highly related. The Board concluded that the Consent Agreement did not weigh in favor of avoiding confusion and determined that the DuPont factor of market interface was a neutral factor. Trademark counsel should review a Consent Agreement prior to submission to the USPTO for purposes of overcoming a refusal to register. If you have questions concerning a Consent Agreement, or other trademark related questions, please contact our office for a courtesy consultation.