When two competitors have identical or similar trademarks, they don’t always have to fight it out. Trademark Consent Agreements have been a traditional alternative. But a recent craft beer-related decision by the U.S. Patent and Trademark Office’s Trademark Trial and Appeal Board (“TTAB) suggests that this may not always be the case.
What Are Trademark Consent Agreements?
The basis of most trademark conflicts is “likelihood of confusion.” Would a consumer be likely to be confused as to the sources of the goods or services?
In a Trademark Consent Agreement, two competitors with identical or similar marks agree to coexist and detail the steps they will take to avoid such confusion. In the past, the USPTO tended to accept these agreements without much scrutiny and allow both marks to be registered.
In re Bay State Brewing Company, Inc.
A&S Brewing Collaborative, based in Vermont, filed a USPTO trademark application for TIME TRAVELER for “beer, ale and lager.” Bay State Brewing Company, based in Massachusetts, applied to register TIME TRAVELER BLONDE for “beer.” Bay State’s application was rejected on the grounds of likelihood of confusion with A&S’ prior application.
Rather than battle it out, the parties entered into Trademark Consent Agreements (a long form and a short form, for reasons that are outside the scope of this blog post.) They agreed to mitigate any likelihood of confusion by doing such things as agreeing to use the trademarks only with their “house marks” (THE TRAVELER BEER CO. and BAY STATE BREWING); by using different packaging and labeling (“trade dress”); and by placing two restrictions on Bay State’s use of their mark: they must prominently use the words BLONDE or MAIBOCK in connection with TIME TRAVELER, and may not use the mark outside of New England or New York.
Despite the Trademark Consent Agreements, the USPTO Examining Attorney still determined that there was a likelihood of confusion. Bay State appealed the decision to the TTAB, who affirmed the decision of the Examining Attorney: Bay State’s TIME TRAVELER BLONDE application was rejected. You can read the decision here.
What Went Wrong?
The TTAB ruling states:
[T]here is no per se rule that a consent, whatever its terms, will always tip the balance to finding no likelihood of confusion, and it therefore follows that the content of each agreement must be examined. Few may be found lacking, but it is not a foregone conclusion that all will be determinative.
The crux of the issue seems to be that Bay State, the junior party, was submitting the Trademark Consent Agreements in order to obtain a full, unrestricted trademark application. They did not seek a “concurrent use registration” with a geographic restriction. The TTAB also rejected the arguments related to house marks and trade dress.
Due to these factors, the TTAB found that there was still a likelihood of confusion:
[W]e 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.
What Does This Mean For Other Businesses?
First of all, this does not mean that Bay State can’t call their beer TIME TRAVELER BLONDE. The agreements between the two companies are still, presumably, legally binding. It simply means that Bay State can’t obtain a USPTO trademark registration for TIME TRAVELER BLONDE.
More broadly, this case signals that the USPTO is going to carefully inspect these types of agreements. We can no longer assume that a Trademark Consent Agreement is a guaranteed means of overcoming a likelihood of confusion finding. So trademark owners and attorneys will need to be focused on crafting agreements that will stand up to USPTO scrutiny.