Trademark Consent and Co-Existence Agreements
Businesses generally register their trademarks to prevent others from using their branding without permission. But what happens where more than one business uses similar marks without knowledge of the other’s existence? Both businesses could have been using their respective marks in good faith and happily coexisting in distinct geographic areas or providing unrelated goods or services, but as their businesses expanded, they could have intruded onto each other’s territories. Or a business could have taken reasonable precautions when selecting a mark and undertaken a thorough trademark search, but because no search is infallible, the legal professional performing the search could have missed a similar mark.
These kinds of situations will often result in the trademark examining attorney issuing an office action for likelihood of confusion during the application process. What can a business do when such a conflict arises? One option is to re-brand. Another option is for the businesses to enter into a trademark consent or coexistence agreement which allows both parties to use and often to register the trademarks.
A consent agreement is a written contract where one trademark owner allows the use and registration of the trademark of the other party. The parties also agree that their marks are not confusingly similar. Consent agreements are typically used when an applicant’s trademark is refused registration for a likelihood of confusion with another mark. The USPTO will give great weight to a consent agreement between the applicant and the owner of the registered mark, but there are certain conditions that must be met. A “naked consent” that contains only permission to register the trademark and a brief statement that confusion is unlikely will probably not be accepted by the USPTO. Instead, the consent agreement must include specific reasons why the parties do not foresee consumer confusion and should include a provision in which the parties agree to make efforts to prevent confusion or to cooperate and take steps to avoid confusion that may arise in the future. Still, if there is a strong likelihood of confusion, the USPTO may find the consent agreement unpersuasive and deny registration.
A coexistence agreement is most often used when a business is expanding into another’s territory and wishes to avoid future infringement litigation. In a coexistence agreement, both parties recognize the right of the other to their respective marks and agree that they may exist together in the marketplace under certain terms. These terms typically include limitations on geographical location, fields of use (i.e., which goods or services on which the marks may be used), or marketing methods. One challenge in entering into a coexistence agreement can be in anticipating the future development and growth of each business.
To use a coexistence agreement to persuade the USPTO to allow registration of a trademark, the applicant must meet one or more of the following criteria:
- A court ordered the concurrent use;
- The registration owner consents to the concurrent use; or
- The applicant’s first date of use in commerce is prior to the filing date of the other party’s application or registration.
Like with consent agreements, the USPTO has some discretion in whether to accept a coexistence agreement. If there is consumer confusion, such an agreement will not be accepted. Further, a court can invalidate a coexistence that is found to be against public interest or in violation of anti-trust regulations.
Author: Karen Y. Kim
The opinions expressed are those of the author on the date noted and do not necessarily reflect the views of Lucem, P.C. or any of its other lawyers. This post is for general information purposes only and is not intended to be and should not be taken as legal advice.