Not All Consent Agreements Created Equal—The USPTO Bounces A Consent Agreement Finding It Unhelpful to Overcome A Confusion Refusal Over a Prior Virtually Identical Mark for Substantially the Same Product

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Not All Consent Agreements Created Equal—The USPTO Bounces A Consent Agreement Finding It Unhelpful to Overcome A Confusion Refusal Over a Prior Virtually Identical Mark for Substantially the Same Product

The US Patent and Trademark Office’s (USPTO) Board of Appeals affirmed a refusal of an application for the trademark TIME TRAVELER BLONDE for beer over the prior mark TIME TRAVELER for “beer, ale and lager” despite the consent by the owner of the cited mark. In re Bay State Brewing Company, Inc., Serial No. 85826258 (February 25, 2016) [precedential].

Generally, consent agreements can be an efficient path to registration in situations where the parties agree that confusion between their respective marks is unlikely. Usually the USPTO gives considerable weight to such consents. The USPTO's rules of practice caution that an examiner should not "substitute [his or her] judgment concerning likelihood of confusion for the judgment of the parties in interest without good reason."

The parties to such agreements are an applicant (here, Bay State Brewing Company, Inc.) and registrant (The Traveler Beer Co.). Technically, Registrant was not party of the process. However, Applicant somehow got Registrant involved by reaching out.

In this case, the USPTO and the Board found that the consent 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.” Why? What happened? When you have a consent agreement, it is usually 90% of success.

Trademark practitioners know that applicant must have messed something up for the USPTO to reject the consent. Was the consent “naked”? "Naked" consent agreements are agreements that contain little more than a prior registrant’s consent to registration of an applied-for mark and possibly a mere statement that source confusion is believed to be unlikely. The USPTO may find a short and conclusory consent agreement “naked” and therefore insufficient to overcome the likelihood of confusion refusal.

Curiously, the consent agreement that Applicant submitted to the USPTO was not “naked.” At the least the Board did not expressly categorize it that way. However, the Board sided with the USPTO examiner who pooh-poohed virtually every important term of the consent: geographic restrictions, commitment to use house marks and obligation not to use the other party’s trade dress.

Geographic restrictions. Applicant is located in Massachusetts; Registrant is located in Vermont. The “Geographical Limitation” provision in the agreement provides that Applicant will not use its applied-for mark “outside of New England and the State of New York,” while Registrant’s use is not geographically limited. The Board found that in this regard the agreement created a situation when the two virtually identical marks may be used in an overlapping territory.

Commitment to use house marks. The provision captioned “Restrictions on Use” provides that Applicant and Registrant must use their respective house marks in connection with the marks at issue: “Bay State Brewing” and “The Traveler Beer Co.,” respectively. In general, use of a house mark does not obviate confusion. However, use of house marks often does help to minimize confusion in practice. Importantly, the presence of this term is evidence of “clothed” consent. The Board found, however, that the addition of house marks to these virtually identical marks used on identical goods does not necessarily mean that purchasers are not likely to be confused. This Board apparently was not impressed by the small font of the house mark shown on the sample labels.

Under the “Trade Dress” provision, Applicant and Registrant agree to refrain from using trade dress (packaging, labeling, and/or marketing) that is confusingly similar. Applicant submitted the following samples of trade dress (and better quality images found via Google):

Time traveler blonde label.png time traveler case.png

The Board noted that the terms of the agreement only require each party to not use the trade dress of the other but do not require the use of particular trade dress by either party. “Thus, if each used minimal trade dress and smaller font displays of the house marks, then the essence of the agreement would be met, but would not aid in the avoidance of confusion” the Board noted perceptively.
Time traveler blonde.pngTime traveler.png

Another problem with Applicant’s argument and generally with Applicant’s coexistence position was that Applicant’s application was based on the intention to use the mark, not actual use. The Board looked at the application literally on paper—it has not yet coexisted with Registrant’s mark in an actual marketplace. Moreover, the application for the mark TIME TRAVELER BLONDE was in standard characters and not limited to any particular design or trade dress. Because the application was in standard characters Applicant would be entitled to use its mark in any design.

Bottom line: the Board has found that the agreement “does not comprise the type of agreement that is properly designed to avoid confusion and does not fully contemplate all reasonable circumstances in which the marks may be used by consumers calling for the goods.” Hence, the appeal is refused, the refusal is afformed.

The Board not only criticized the consent agreement, but it also provided some guidance for future submissions by applicants in similar circumstances:

The agreement also is sorely lacking in business information as to why Applicant and Registrant believe that confusion between their marks is not likely to occur under the particular circumstances of their contemporaneous use. For example, consent agreements often refer to differences between the goods, trade channels and classes of purchasers; the sophistication of purchasers; and dissimilar methods of advertising and promotion. The agreement is silent on all of these points.

Perhaps, if Applicant and Registrant had added more terms explaining the differences between their respective products, the USPTO could have looked more favorably. The beers of the Time Traveler Beer Co. are “sophisticated blends of carefully crafted American wheat ale with fresh and refreshing ingredients.” What ingredients? Lemonades (shandy), grapefruit, strawberry, pineapple, etc. By contrast, Bay State’s product is more traditional and is described as follows: “A New World Classic, Bay State's Mai Bock is a big bright golden malty lager. Easy drinking and warming with substantial body and mouth feel and just a hint of sweetness. Made from generous amounts of Pilsner and Vienna malts, Bohemian hops and Bavarian lager yeast.” Thus, Applicant and Registrant clearly could have differentiated their respective products and probably channels of trade.

There are other things Applicant could have done differently with its application and consent agreement. Still, the Board’s decision stands out for the level of scrutiny the Board and the PTO Examiner both gave to the agreement, in the name of protecting public from consumer confusion. The agreement contains a provision which usually works wonders: the parties “wish to avoid any conflict with one another and consent to co-exist” and further agree “to cooperate in good faith to resolve such actual confusion and to develop measures sufficient to avoid a likelihood of confusion.”

Do you agree with the Board’s decision or is this yet another example of the government’s “micro managing” business and in fact “substituting its judgment for the judgment of the parties in interest without good reason"?

Text © Maxim A. Voltchenko 2016
* This piece is not intended to be a review of USPTO’s TTAB cases. This posting may not necessarily represent the views of the author’s employing law firm. Although every effort has been made to verify the accuracy of items in the Sputnik Blog®, readers are urged to check independently on matters of specific concern or interest.

Monday, March 07, 2016 21:54:52
One more thought. The mark on the label of The Traveler Beer Co. in fact is TRAVELER, not TIME TRAVELER. I am surprised Applicant did not zero in on that argument. However, the Board would still go by what it is in the registration, not on the label.