Client Alert - A Detailed Trademark Consent Agreement between Brewers is Rejected
Consent agreements can be one way for trademark applicants to overcome an examiner’s refusal to register a trademark because of a likelihood of confusion with another party’s registered mark.
Past decisions have made it clear that a detailed consent agreement (i.e., one that states why the parties believe there will be no likelihood of confusion and states the steps the parties will take to avoid confusion) should be given great deference. This makes sense as the parties are in the best position to understand the actual marketplace realities and to decide whether marks can coexist in the marketplace without consumer confusion.
However, a recent precedential decision with particular relevance to the brewing industry reminds us that consent agreements will not always be accepted even if the parties agree that the marks can coexist. In re Bay State Brewing Company, Inc., Serial No. 85826258 (T.T.A.B. February 25, 2016).
Bay State Brewing Company (“Bay State”), a small Massachusetts-based brewery, applied to register the standard character word mark TIME TRAVELER BLONDE for “beer” in International Class 32. The trademark examiner refused the application based on an alleged likelihood of confusion with an earlier-filed application (now registration) owned by Vermont-based A&S Brewing Collaborative (“A&S”) for the standard character word mark TIME TRAVELER for “beer, ale and lager” in International Class 32.
To overcome the refusal, Bay State submitted a signed consent agreement with A&S, which included the following restrictions:
Each party must use its mark together with its respective house mark, namely THE TRAVELER BEER CO. and BAY STATE BREWING;
Each party will not use trade dress, packaging, labels or marketing that is confusingly similar to the other party’s trade dress, packaging, labels or marketing;
Bay State must always use the words TIME TRAVELER with either the word BLONDE or the word MAIBOCK, and always in a manner that is at least as prominent as the words TIME and TRAVELER; and
Bay State will not use its mark outside of New England and the State of New York.
The examiner rejected the consent agreement as insufficient to avoid consumer confusion given the similarity of the marks (TIME TRAVELER and TIME TRAVELER BLONDE) and the identical nature of the goods (beer or types of beer).
Bay State appealed to the Trademark Trial and Appeal Board, arguing that the parties’ consent agreement is a “well-reasoned and detailed agreement drafted by knowledgeable parties eager to avoid confusion” and, therefore, should be accepted.
Although the Board acknowledged the historical deference given to consent agreements, the Board nonetheless agreed with the examiner, holding that the consent agreement in this case was insufficient to avoid a likelihood of consumer confusion.
The Board noted that consent agreements relate to only one of the thirteen likelihood of confusion factors, and that all relevant factors must be considered. Having analyzed the other relevant factors, the Board found that “the virtual identity in the marks, and the identity in the goods, trade channels, and purchasers, along with the impulse nature of purchases of beer, presents a compelling case for finding a likelihood of confusion.”
Turning to the consent agreement, the Board stated that “there 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.”
In this case, the Board emphasized the infirmities of the agreed-to geographical restrictions. While Bay State could use its mark only in New England and the State of New York, there was no corresponding geographical restriction that would prevent A&S from using its mark in the entirety of Bay State’s territory. Presuming this would happen, the Board found that the geographical restrictions would not alleviate a likelihood of consumer confusion because consumers could theoretically encounter beer sold under both marks in the same stores and be confused.
The Board also found that the other agreed-to restrictions on trade dress and house mark usage were insufficient because these restrictions related only to use of the marks, and would not be reflected on the record in the trademark registrations. The Board characterized these use restrictions as “promises” that represent a “deviation from the parameters of the application and registration, and thus would result in a failure of the public notice function of registrations.” In other words, the world at large would not be aware of these restrictions when searching the trademark register, so consumers encountering two similar marks covering identical goods coexisting on the register would be misled.
Accordingly, the Board held that the existence of the consent agreement in this case did not outweigh the other relevant factors, all of which favored a finding of likelihood of confusion.
The result is that Bay State will not get a registration for its TIME TRAVELER BLONDE mark, notwithstanding A&S’s consent to registration. Bay State can appeal the decision to the Court of Appeals for the Federal Circuit, which in the past has instructed the Trademark Office to give great weight to consent agreements.
Until now, consent agreements have been routinely accepted when the parties stated a minimal basis for why the marks could coexist without consumer confusion. However, the decision in this case suggests that the Board (and trademark examiners) will give more scrutiny to consent agreements going forward, especially when the marks are notably similar and the goods or services are identical. Therefore, when negotiating a consent agreement, applicants and trademark practitioners must be careful to include detailed, meaningful provisions that are designed to avoid consumer confusion.
In this case, the result might have been different if the consent agreement had included more robust geographical restrictions on both parties that prevented use of the marks in the same states or if Bay State had sought a geographically restricted concurrent use registration rather than a nationwide registration. Likewise, the result might have been different if Bay State had applied for a composite mark that also included its house mark or for a stylized mark rather than a standard character mark, as the trademark register would have reflected the realities of the marketplace as agreed to by the parties.
Conflicts with other marks can often be avoided by having your trademark counsel conduct a clearance search before filing an application. In addition, trademark counsel can advise you on different filing strategies that might be helpful later on if you do encounter a conflict with another mark.
Significance for the Brewing Industry
For the brewing industry, this case illustrates the potential issues that entrants to the market must consider when seeking to register trademarks in an increasingly crowded field, underscoring the importance of acting early to secure your marks.
Moreover, the case highlights how the decisions of the Trademark Trial and Appeal Board and individual trademark examiners can sometimes be at odds with the spirit of cooperation sometimes found in the brewing industry, especially among business owners who may not see the use of similar marks on similar products as likely to confuse consumers or present a competitive threat.
For further information, contact Bob English (212-790-9215, firstname.lastname@example.org), or your attorney at CLL.