In a decision bound to impact trademark prosecution practice in the future, the United States Patent and Trademark Office, Trademark Trial and Appeal Board (the “Board”) recently found that a consent agreement between a trademark applicant and the registrant of a similar prior-registered mark – that is, a coexistence agreement – was insufficient evidence that the parties’ respective use of their trademarks would not cause consumer confusion. In re Bay State Brewing Company, Inc., Serial No. 85826258 (February 25, 2016) [precedential].
The USPTO’s determination of a likelihood of confusion is based on an analysis of all of the facts in evidence that are relevant to the factors set forth in In re E. I. du Pont de Nemours & Co., 476 F.2d 1357 (CCPA 1973). The most important du Pont factors are the similarities between the marks and the similarities between the goods and services. However, the existence of a valid consent agreement between an applicant and the owner of the previously registered mark has always been considered highly relevant in this context. See Trademark Manual of Examining Procedure (“TMEP”) § 1207.01(d)(viii). As the Court of Customs and Patent Appeals stated in du Pont:
[W]hen those most familiar with use in the marketplace and most interested in precluding confusion enter agreements designed to avoid it, the scales of evidence are clearly tilted. It is at least difficult to maintain a subjective view that confusion will occur when those directly concerned say it won’t. A mere assumption that confusion is likely will rarely prevail against uncontroverted evidence from those on the firing line that it is not.
476 F.2d at 1363.
This case began with a rather routine refusal of registration of an application to register the mark TIME TRAVELER BLONDE for “beer” based on likelihood of confusion with a prior-registered trademark for TIME TRAVELER for “beer, ale and lager.” The parties thereafter executed a consent agreement, in which the parties agreed to certain restrictions on the size and dominance of the relevant portions of their marks, geographic restrictions of use, possible future trademark applications, and similar matters. The applicant undoubtedly expected the consent agreement to be accepted, as the USPTO has typically done. The application would then have been approved for registration.
This case, however, turned out to be atypical because the Examining Attorney assigned to this file rejected the consent agreement as inadequate. Specifically, he considered the provisions governing how the parties’ were permitted to display their respective marks to be of little value because, among other things, the registrations themselves would contain no such limitations. The Examining Attorney also considered the geographic restrictions in the consent agreement to be ineffective because the parties agreed that the registrant could use its mark in the applicant’s territory.
On appeal, the Board affirmed the Examining Attorney’s refusal, pointing out that the Court in du Pont found that a consent agreement is simply evidence to be included in the likelihood of confusion determination, and “it may or may not tip the scales in favor of registrability, depending upon the entirety of the evidence.” Each consent agreement must be examined and it is not a foregone conclusion that every such agreement will be determinative.
First, the consent agreement at hand was found inadequate because “the parties have agreed to allow use of their respective marks in the same territories, [and] Registrant will be free to use its mark in the entirety of Applicant’s territory.” However, applicant “is not seeking a concurrent use registration (with a corresponding geographical restriction in Registrant’s registration), but rather a nationwide registration. Nor is Applicant seeking a geographically restricted registration as part of the consideration provided to Registrant for entering into a consent agreement.”
Additionally, the Board held that in light of the geographical overlap, the effectiveness of the remaining provisions in the agreement was diminished. The other provisions in the agreement that sought to reduce the similarity between the parties’ marks – the addition of each party’s house mark to the mark as a whole, the trade dress restrictions – was viewed to be insufficient to obviate possible consumer confusion.
The Board distinguished this case from In re Four Seasons Hotels, Ltd., 987 F.2d 1565 (Fed. Cir. 1993), where the Federal Circuit found no likelihood of confusion between FOUR SEASONS BILTMORE and THE BILTMORE LOS ANGELES. The Board reasoned that the parties’ consent agreement in that case passed muster because the marks were sufficiently different, the services were not entirely identical, and the parties’ marks actually had coexisted in the marketplace for years. “Here, by contrast, the marks in the application and registration are virtually identical, with the only difference being a highly descriptive or generic designation for a type of beer (‘blonde’).” Further, the application for TIME TRAVELER BLONDE was based on an intent-to-use. Thus, the Board could not presume facts based on actual marketplace use.
The Board concluded:
In sum, while we unmistakably recognize the Federal Circuit’s instruction that consent agreements are frequently entitled to great weight, we find that the specific consent agreement in this case is outweighed by the other relevant likelihood of confusion factors, namely that the marks are virtually identical, and the goods, trade channels and purchasers are identical. Further, the goods are subject to impulse purchase. Notwithstanding the consent agreement, we are persuaded that patrons in New York and New England are likely to be confused as to source upon encountering the marks TIME TRAVELER and TIME TRAVELER BLONDE, even when these marks are used within the constraints set forth in the consent agreement.
Slip. Op. at 20.
It will be interesting to see if this is an exception, or whether the USPTO and the Board will change their view of the impact of consent agreements providing for coexistence.
 A concurrent use registration proceeding is an inter partes proceeding in which the Board determines whether an applicant is entitled to a concurrent registration, that is, a restricted registration, with conditions and limitations fixed by the Board, as to the mode or place of use of the applicant’s mark or the goods and/or services on or in connection with which the mark is used. Restrictions are generally to claimed geographic areas of use. The applicant must state in the application the geographic area, goods and/or services, and (if applicable) mode of use for which applicant seeks registration of the mark.