Consent Agreements: Not All They’re Cracked Up To Be


When there’s likely confusion, there’s likely confusion. Sometimes there’s no way around it.

In the trademark world, likelihood of confusion (really, distinctiveness) is the name of the game. If one business uses, or wants to use, a trademark that is likely to cause confusion with the trademark of another business, they can’t. Basically, trademarks are meant to distinctively identify a source so that the public knows what they’re buying and from whom they’re buying. If there is confusion in the marketplace, the consumer loses.

Often times, two businesses want to use similar trademarks—typically one business already uses a mark and another business wants to use something similar. And, usually, the business that is late to the party doesn’t get to use the mark, because otherwise: confusion.

One way around this confusion—mostly pertinent to trademark registrations—is for both parties to agree to do their best to avoid confusion. A consent agreement.

The reasoning behind consent agreements (possibly misguided) goes like this: 1) A business owner wants a business that thrives; 2) the owner understands that to have a thriving business customers need to be able to find and buy their goods/services; 3) The owner will use appropriate trademarks to assist the consumer in identifying those goods/services; 4) To allow their business to thrive, the owner will do everything possible to avoid confusion with the trademarks of other businesses, including working around and with a similar mark.

Consent agreements are a sort of acknowledgement of this reasoning, and typically include two parties, with similar trademarks, that agree to do all they can to avoid confusion. They are given a lot of weight (for some reason). However, they aren’t the end all.

In a recent TTAB decision, the Board upheld an examining attorney’s refusal to register 8-BIT ALEWORKS in view of the registered 8-BIT BREWING COMPANY mark. As for a likelihood of confusion rejection, this one was easy. The distinctive portion is 8-BIT (the remaining portions of each mark are descriptive) and both are for beer.

(Think about that. Two breweries, both use 8-BIT as the first and most distinctive part of their mark. Likely confusion? I think so.)

To overcome the rejection, the applicant and the owner of the registered mark signed a consent agreement, stating that, among other things, they will do their best to make sure there is no confusion. Well, the examining attorney didn’t accept that. And neither did the TTAB.

The Board piece-by-piece explained why the consent agreement wasn’t sufficient. And it makes sense. Just because these two parties agree that there is no problem in both using their mark, doesn’t mean there is no problem in both using their mark. Further, the agreement had some pretty significant issues.

This decision is an important reminder that consent agreements are not a cure for confusion. This is especially important for trademark attorneys who often think, “hey, just get a consent agreement and all is good.”

One passage of the opinion struck me. It got to the heart of consent agreements (as briefly discussed above). The Board quoted duPont, the seminal likelihood of confusion case, in describing a business owner’s want to avoid confusion:

It can be safely taken as fundamental that reputable businessmen-users of valuable trademarks have no interest in causing public confusion. The genius of the free competitive system is the paralleling of the interest of the entrepreneur and the consuming public so far as possible. Altruism aside, it is in his pecuniary interest, indeed a matter of economic survival, that the businessman obtain and retain customers, the very purpose and function of a trademark, and that he avoid and preclude confusion. Millions of advertising dollars are spent daily for that precise purpose. The history of trademark litigation and the substantial body of law to which it relates demonstrate the businessman’s alertness in seeking to enjoin confusion. In so doing he guards both his pocketbook and the public interest. … [E]xperienced businessmen fully and continuously alert to each other’s products, labels, trade channels and advertising . . . will be quick to act against confusion. . . . Dollars were at stake. Decisions of men who stand to lose if wrong are normally more reliable than those of examiners and judges.

This is all true and important, but also nonsense for many consent agreements. If “businessmen” truly cared about confusion or understood trademarks, most of the time they wouldn’t get into this consent-agreement-mess in the first place. Many consent agreements are with parties that don’t quite understand the importance of distinctiveness in trademarks, or they just refuse to give up the mark they’ve decided to use. (Confusion be damned!).  The thought behind most consent agreements go like this: 1) I use that mark (or want to use that mark); 2) the only way I can use it is if I get someone else to consent to letting me use it; and…nothing else. Confusion is usually either a minor discussion or a non-factor.

See, a lot of businesses just want what they want. And that might not be what’s best.

For many, rather than a consent agreement, the business should recognized that the other mark that is blocking the use of their mark is likely to cause confusion for their customers and thus hurt their business (or hurt the business of the registered mark, which they might not care about but is important for public policy reasons). Though it may be hard  to swallow, a likelihood of confusion rejection can be a good time to reassess a mark and whether or not it accomplishes its purpose: distinctively identify source.

What I want to know is, why do consent agreements carry so much weight? So what if “businessmen will ensure…” blah blah blah. Trademarks should not be about what the owner wants, but should be about what the public will (does) perceive. Consent agreements certainly have their place (especially for marks with long-term concurrent use), but their importance is often overblown.

The Board got this one right. Sometimes there is no way around confusion.

h/t to the TTABlog