CONSENT AGREEMENTS & SECTION 2(d) REFUSALS OF A PROPOSED TRADEMARK
This blog addresses the Oct. 30, 2017 non-precedential decision by the Trademark Trial and Appeal Board (“Board”) in In re 8-Brewing, LLC where the Board determined that a consent agreement between a registered trademark applicant and a registered trademark owner was insufficient for overcoming a rejection of the applicant’s mark on likelihood of confusion grounds.
The blog is divided into three parts: A) Background on Consent Agreements; B) Discussion of the Board’s Opinion; and C) Take Home Points.
A. Background on Consent Agreements
A consent agreement is an agreement between the applicant and an existing registered trademark owner that it is OK from their perspective for the marks to co-exist in the marketplace. That is, the registered mark owner has no “problem” if the USPTO should go ahead and allow registration of the applicant’s mark despite an initial finding of likelihood of confusion by the USPTO.
It is important to understand that such agreements on their face will not always overcome the USPTO’s rejection of an applicant’s mark on likelihood of confusion grounds. Trademark law is intended to protect the consumer from confusion over the source of the associated goods and services. From the USPTO’s perspective, the greater the similarity between the goods and services between the applicant’s and the registrant’s mark, the greater the likelihood of confusion over the sources supplying the goods/services. A consent agreement that is vague as to how the parties are going to limit the likelihood of confusion will generally not pass muster with the USPTO.
B. Discussion of the Board’s Opinion
During the prosecution of a trademark application, the USPTO determines the likelihood of confusion of an applied-for mark with existing registered marks according to what are commonly known as the Dupont factors as set forth in In re E.I. du Pont de Nemours & Co., 476 F.2d 1357, 1377 USPQ 563 (CCPA 1973). Here, the applied-for mark was 8-Bit Aleworks in standard letters form. The examining attorney had found that there was likelihood of confusion with two existing registered marks – 8 bit Brewing Company in standard characters and a design mark including the words 8 Bit Brewing Company. The application and the two registrations identified the same goods – beer. The associated international classification is 032.
Having found that the specified goods were identical, the Board emphasized that when marks appearing on goods are identical, “the degree of similarity necessary to support a conclusion of likelihood of confusion declines.” Slip opinion at 5. Here, the terms 8 BIT and 8-BIT were identical, constituted the literal or source-identifying portion of the marks, and preceded disclaimed or highly descriptive or generic terms (Ales and Brewing Company). The examining attorney had concluded that the commercial impressions of the applicant’s and registrant’s marks were identical. The Board took the analysis one step further and stated that the “literal portion [8 Bit] of each mark appears first in each mark and thus is more likely to be remembered by consumers.” Slip opinion at 7. Furthermore the words “Aleworks” and “Brewing Company” do nothing to distinguish the marks because consumers are accustomed to seeing these terms in others’ marks and are thus unlikely to view this additional wording in either the Applicant’s or Registrant’s marks as distinctive.
Once it found found that the Applicant’s mark and the Registrant’s marks were basically identical, the Board next determined whether the proffered consent agreement was sufficient to protect consumers who may encounter the marks from confusion. The Board considered the following factors:
- Whether the consent shows an agreement between both parties;
- Whether the agreement includes a clear indication that the goods and/or services travel in separate trade channels so as to minimize confusion as to source;
- Whether the parties agree to restrict their field of use;
- Whether the parties will make efforts to prevent confusion and cooperate and take steps to avoid any confusion that may arise in the future; and
- Whether the marks have been used for a period of time without evidence of actual confusion. Slip opinion at 8.
This commentator finds it inexplicable that the consent agreement did not even refer to the correct applied for mark – 8-Bit Aleworks in standard character form which was the subject of the appeal. Instead, the consent agreement specified a design mark with the words 8-Bit Aleworks. A review of the USPTO records shows that the Applicant applied for the design mark in 2017 or after the standard character mark had been rejected. The USPTO has recently rejected the Applicant’s later applied-for design mark.
The Board thus rightly noted that the consent agreement was ambiguous as to what the Registrant was actually consenting to – the coexistence of the design mark depicted in the consent agreement or the use and registration of the Applicant’s standard character mark with or without the design element. Slip opinion at 12.
The consent agreement also stated that the parties were unaware of any actual confusion. However, both the Applicant’s and the Registrant’s marks had only been in use June 2016 and the agreement had been executed in Nov. 2016 or less than 6 months after the start of the claimed usage period The Board found that this short period of time was insufficient for establishing any actual confusion by consumers.
Furthermore, the consent agreement did little to show how the parties would limit their respective goods to different channels of trade. For example, the agreement was as to the actual price ranges of the parties’ beer. Furthermore, the beer purchaser is often an ordinary consumer who will exercise only ordinary care in choosing a brand of beer. This is not a situation where the consumer will expend considerable time and effort (i.e., a high level of care) in making a purchase decision, e.g., as in purchasing a motor vehicle or a computer. The agreement also lacked specificity in stating how the Applicant’s and Registrant’s products were going to be distinctively packaged so as help avoid confusion especially where the marks are basically identical.
Finally, the Board addressed the issue of interstate commerce in trademark law. Although the agreement appeared to limit the use of the parties’ marks within their own states, namely California and Arizona respectively, the registration of a proposed mark requires that the proposed mark is being used in interstate commerce. This does not mean that the goods have to be sold in every state but at least outside of the source’s own state of business or residence. All trademark applicants must allege that their proposed marks are being used in interstate commerce at the time the specimens are submitted as part of the trademark prosecution application process. Furthermore, renewal of registered marks also requires that the registrant allege that the mark is still being used in interstate commerce. The USPTO cannot verify every statement and is relying on the “honest” statements of the applicant. This consent agreement is thus vague and unclear as to interstate commerce issues. Registration does not limit the usage of a registrant’s mark to any geographical location but protects the mark in all U.S. states and territories.
The Board noted that an applicant’s right to geographically restrict registration may only be considered in the context of a separate concurrent use proceeding. Any geographical restrictions that an applicant and registrant agree to in a consent agreement are irrelevant and are not reflected in any registrations issuing from the involved application(s).
Based on the equivalency of the Applicant’s proposed mark and the Registrant’s marks and the many deficiencies in the consent agreement, the Board affirmed the examining attorney that the Applicant’s mark cannot be registered.
C. Take Home Points
1. Take the Time to Determine Potential Problems with a Proposed Trademark Before Ever Filing an Application.
First and foremost, the Applicant in this case took a huge risk in applying for the mark at issue. Now the Applicant has spent considerable legal fees in trying to get the mark registered when trademark law case law clearly indicated that the Applicant would encounter major problems. Selecting a mark that will not encounter issues from likelihood of confusion to merely descriptive issues is a very difficult endeavor. Taking the time to do it right by, for example, conducting proper trademark searches at both the federal and common law levels is worth any associated costs with taking such upfront steps.
- If a Consent Agreement Is to be Presented to the the USPTO, Make Sure It Details the Steps to be Taken by the Parties to Minimize Consumer Confusion Given the Nature of the Goods/Services.
Here the consent agreement appeared to have been written by someone who did not understand the principles governing trademark law from interstate commerce issues to establishing to the satisfaction of the USPTO that the parties were taking clearly defined steps to minimize confusion and/or that the goods/services would not involve the same channels of trade.
By way of example, this commentator has worked with attorneys representing the registrant or applicant to draft unambiguous, detailed consent agreements that have been accepted. It is, however, emphasized, that the “involved” goods in the commentator’s agreements did not encompass precisely the same channels of trade even though the goods/services fell into the same classification of goods and services. Alternatively, the goods/services were of the nature that the consumer would exercise considerable time and caution beyond ordinary care in the decision-making process because of the cost involved.
The bottom line – each consent agreement submitted to the USPTO will be evaluated on its own merits for compliance with the USPTO’s requirements for trademark registration to prevent consumer confusion.
Copyrighted 2017 by Troy & Schwartz, LLC
The following is not legal advice and is presented for information only. If you are considering an action that could have legal consequences, you should consider consulting with an attorney of your choosing.
