Trademark Consent Agreements: When Similar Brands May Be Able to Coexist
Businesses sometimes discover that another company already uses a trademark that is identical or similar to the mark they want to register. That does not always mean the new brand must be abandoned.
In some situations, the parties may be able to enter into a trademark consent agreement that allows both businesses to use or register their marks under agreed terms.
These agreements can be useful when the parties believe their respective uses of the marks can coexist without creating a likelihood of confusion. However, a consent agreement does not automatically
guarantee that the USPTO will approve a trademark application.
What Is a Trademark Consent Agreement?
A trademark consent agreement is an agreement in which one trademark owner consents to another party's use or registration of an identical or similar mark. In some cases, both parties agree to the other's use or registration.
The agreement can help explain why the parties believe their marks can coexist and may address practical measures designed to reduce the possibility of consumer confusion. The USPTO considers a consent agreement as one factor among the other circumstances relevant to a likelihood-of-confusion analysis.
When Could a Consent Agreement Be Useful?
A consent agreement may be considered when two businesses have similar marks but operate in circumstances that make confusion less likely.
For example, the businesses may serve different types of customers, operate through different trade channels, or offer sufficiently different goods or services.
The parties may also agree to specific limitations on how their marks will be used. These terms can help demonstrate that the businesses have considered how to reduce the possibility of confusion.
The circumstances will vary from case to case, and there is no single agreement that will work for every situation.
Can a Consent Agreement Overcome a Trademark Refusal?
A consent agreement may be submitted to the USPTO when an examining attorney has issued a refusal based on a likelihood of confusion under Section 2(d) of the Trademark Act. It may also be submitted before a refusal is issued.
The USPTO gives substantial consideration to properly structured consent agreements. However, the agreement is only one factor in the overall analysis, and it does not automatically require the USPTO to
withdraw a refusal.
This is why a business should not assume that obtaining another trademark owner's consent will automatically result in registration.
What Might a Consent Agreement Address?
The terms will depend on the circumstances, but an agreement may address matters such as:
✔️the goods or services each party will offer;
✔️where or how the marks will be used;
✔️the markets or customers served by each business;
✔️steps the parties will take to reduce potential confusion; and
✔️the circumstances under which either party may use or register the mark.
A carefully considered agreement can provide the USPTO with more context about why the parties believe coexistence is appropriate. The substance of the agreement matters, rather than simply the fact that one party has provided consent.
Consent Does Not Mean the Trademarks Are Automatically Safe
Businesses should also understand that agreeing to coexist does not eliminate every trademark risk.
A consent agreement deals with the relationship between the parties, but the USPTO still evaluates the application under the applicable trademark rules. A simple or unsupported statement that the parties do
not believe confusion will occur may not always be enough to overcome a refusal.
For that reason, the terms of any proposed agreement should be considered carefully before they are signed.
What Businesses Should Consider
Before entering into a trademark consent agreement, businesses may wish to consider:
✔️how similar the marks are;
✔️whether the goods or services are related;
✔️whether the businesses reach the same customers;
✔️how the marks are being used in the marketplace;
✔️what restrictions or safeguards could reduce confusion; and
✔️how the agreement may affect future trademark use or expansion.
These considerations can be especially important for businesses that expect to expand into new products, services, or markets.
When Legal Review Makes Sense
Trademark consent agreements can involve both business negotiations and trademark law. The agreement should therefore be reviewed with the specific businesses, marks, goods or services, and future plans in mind.
A well-structured agreement may help address a potential conflict while allowing both businesses to continue developing their brands. At the same time, whether coexistence is appropriate will depend on the circumstances and the applicable trademark law.
Borderless Counsel assists businesses with trademark registration, trademark strategy, and related intellectual property matters. To discuss a potential trademark conflict or consent agreement, contact
info@borderlesscounsel.com.