When businesses seek to register trademarks with the United States Patent and Trademark Office (USPTO), they may sometimes encounter obstacles, such as a refusal under Section 2(d) of the Trademark Act due to a likelihood of confusion with an existing mark. In such cases, a Consent Agreement between the trademark owners may be used to argue that coexistence of the marks will not lead to consumer confusion. However, even with an agreement in place, the USPTO is not obligated to accept it, and rejection remains a possibility.
What is a Consent Agreement?
A Consent Agreement is a legally binding document between two parties in which the owner of a registered trademark agrees to permit another party to register a similar or related mark. This agreement typically outlines specific terms intended to minimize the likelihood of confusion trademark issues, such as defining separate trade channels or specifying branding distinctions.
Trademark owners often opt for Consent Agreements as a way to resolve potential disputes without resorting to litigation. While these agreements can be persuasive in overcoming a USPTO refusal, they must be carefully structured to meet the necessary legal standards. The USPTO will closely scrutinize any agreement to determine whether it effectively mitigates consumer confusion.
USPTO Consent Agreement Rejection: Why It Happens
Despite the existence of a Consent Agreement, the USPTO maintains the authority to reject it if the examining attorney determines that consumer confusion remains likely. The effectiveness of such an agreement largely depends on the specificity and strength of its provisions. In cases where an agreement is vague or lacks clear preventative measures, it may carry little weight in influencing the USPTO’s decision.
One notable case illustrating this issue is In re A-Plant 2000 ApS, Serial No. 79162833 (August 25, 2017). In this case, the Trademark Trial and Appeal Board (TTAB) upheld a refusal to register a mark despite the existence of a Consent Agreement between the parties. The Board highlighted several critical factors that contributed to the rejection:
- Agreement Content and Clarity – The agreement must explicitly state that the parties recognize the absence of confusion and outline clear reasons supporting that conclusion.
- Distinct Trade Channels – If the agreement does not sufficiently specify that the goods or services travel in separate trade channels, it may be considered weak.
- Field of Use Restrictions – If the agreement lacks specific field-of-use restrictions, the USPTO may question whether the marks truly coexist without confusion.
- Preventative Measures – The agreement should detail concrete steps that the parties will take to avoid consumer confusion, such as unique packaging, branding, or marketing strategies.
- Market History and Consumer Perception – If both marks have been in use without any evidence of actual confusion, this factor can strengthen the agreement. However, failure to provide proof can weaken the argument.
Avoiding a “Naked” Consent Agreement
One of the primary reasons for USPTO consent agreement rejection is what is known as a “naked” Consent Agreement. This term refers to agreements that lack substantive explanations for why confusion is unlikely and fail to provide detailed measures for preventing potential confusion.
A well-drafted Consent Agreement should:
- Clearly outline why the parties believe there is no likelihood of confusion trademark issue.
- Provide explicit strategies, such as product differentiation, branding distinctions, or marketing strategies, to prevent consumer confusion.
- Define separate trade channels and target consumer bases to establish distinct market interfaces.
- Include a historical record of the marks coexisting without reported confusion, if applicable.
The Role of DuPont Factors in Consent Agreement Evaluations
The TTAB applies the In re E. I. du Pont de Nemours & Co. (476 F.2d 1357, 177 USPQ 563, 567) decision, which established a set of factors used in assessing the likelihood of confusion. While a Consent Agreement is one of these factors, it does not automatically determine the outcome in favor of registration. Instead, the USPTO will evaluate the agreement in conjunction with all relevant DuPont factors.
For instance, in In re Four Seasons Hotels, Ltd., 987 F.2d 1565, 26 USPQ2d 1071 (Fed. Cir. 1993), the Federal Circuit found that a well-drafted Consent Agreement carried significant weight. However, when Consent Agreements lack detail or fail to mitigate confusion, the USPTO may find them insufficient to support registration.
Key Takeaways for Trademark Owners
For businesses considering a Consent Agreement as a means of overcoming a likelihood of confusion rejection, it is crucial to ensure the agreement is thorough, detailed, and strategically structured. Here are some best practices:
- Be Specific and Detailed – Vague agreements are more likely to be disregarded. Ensure the agreement includes detailed provisions that clearly explain how confusion will be avoided.
- Differentiate Branding and Packaging – Establishing distinct branding elements, such as different logos, color schemes, or packaging designs, can help strengthen the case.
- Define Separate Trade Channels – If the goods or services operate in distinct markets, make sure the agreement explicitly states this distinction.
- Provide Historical Evidence – If both trademarks have coexisted without consumer confusion, include records or data demonstrating this in the agreement.
- Consult with Trademark Counsel – Given the complexities of trademark law, seeking legal guidance before submitting a Consent Agreement can improve its chances of acceptance.
Final Thoughts
While Consent Agreements can be effective tools in trademark registration proceedings, they are not guaranteed to succeed. The USPTO retains the discretion to reject agreements that do not sufficiently address the likelihood of confusion trademark concerns. To avoid USPTO consent agreement rejection, businesses must ensure their agreements are comprehensive, detailed, and well-reasoned.
Trademark owners should carefully craft their agreements, keeping in mind the USPTO’s scrutiny and the potential for rejection. Consulting with an experienced Trademark Attorney can provide valuable insights into creating an agreement that meets legal standards and strengthens the case for registration.