Intellectual Property Law Firm Representing Clients in Patent, Trademark, Copyright, and Trade Secret Matters

Trademark Consent vs. Coexistence Agreements

Registering a trademark typically serves to protect a brand from consumer confusion and unauthorized use. However, with the rapid growth of new businesses and their increasing number, it’s common for companies to adopt similar trademarks without knowledge of one another. This situation often arises when businesses operate in different geographic regions or offer unrelated services. Rather than opting for a trademark registration race or engaging in potentially prolonged conflicts and litigation—especially when a common law trademark might be in play—businesses may consider trademark consent or coexistence agreements. These agreements enable both parties to use and often register similar trademarks.

Trademark Consent Agreement

A trademark consent agreement is a straightforward contract in which one party agrees to permit another party to use and/or register a trademark that overlaps with their own. This agreement usually includes a statement affirming that the trademarks are not likely to cause consumer confusion. Such agreements are commonly used when a business has faced a registration refusal from the U.S. Patent and Trademark Office (USPTO) or anticipates one.

When assessing whether to approve a trademark registration, the USPTO evaluates numerous factors and evidence. If the USPTO believes a proposed mark could cause confusion with an existing registered mark, it will consider a consent agreement between the applicant and the existing mark’s owner. However, for a consent agreement to be effective, it must be detailed and supported by specific reasons and evidence showing why confusion is unlikely, along with explicit actions to mitigate any potential confusion. Mere “naked” consent agreements, which only grant permission and briefly state that confusion is unlikely, are generally less persuasive. Ultimately, significant similarity between marks can overshadow even a well-crafted consent agreement.

Trademark Coexistence Agreement

A trademark coexistence agreement is a more detailed arrangement that offers broader protection than a basic consent agreement. These agreements typically outline specific limitations regarding the locations, industries, and marketing methods where the parties can use their respective marks. They are particularly beneficial for businesses anticipating growth and wanting to avoid future disputes or litigation.

To submit a coexistence agreement to the USPTO, the applicant must meet one of the following criteria for “concurrent use”:

1. A court order mandates concurrent use.
2. The owner of the conflicting mark consents to concurrent use.
3. The applicant used their mark in commerce before the filing date of the conflicting mark’s application or registration.

A comprehensive trademark coexistence agreement should include:

• Identification of all parties involved.
• Specific trademarks and/or logos covered by the agreement.
• Associated domain names used by each party.
• Geographic regions where the trademarks can coexist and areas where they cannot.
• Each party’s expansion plans.
• The agreement’s start and end dates.
• Jurisdiction and dispute resolution methods.

Coexistence agreements are evaluated similarly to consent agreements by the USPTO. A more detailed and restrictive agreement is more likely to be upheld by the USPTO. However, if consumer confusion is still likely, even a detailed agreement may not be sufficient. Additionally, courts may invalidate coexistence agreements that negatively impact market competition or violate antitrust laws.

Choosing Between a Trademark Consent or Coexistence Agreement

• Time: Consent agreements are typically faster and simpler to execute, making them suitable for urgent registration needs. Coexistence agreements, while more time-consuming, provide more robust protection and are more likely to be upheld in court if time is not a constraint.
• Budget: Consent agreements are generally less expensive due to their simplicity. However, a coexistence agreement offers greater protection, which might be worth the additional cost.
• Leverage: A junior trademark user may need to request a consent agreement from a senior user, who has typically been the first to use or register the mark. When bargaining power is more balanced, a coexistence agreement that addresses both parties’ concerns can be advantageous. Factors such as senior user status, the fame of the mark, or ownership of related marks can influence bargaining power.
• Future Business Changes: Businesses planning to expand into new regions, industries, or lines should consider a coexistence agreement. This type of agreement allows for adjustments to address anticipated risks and facilitates smoother growth, whereas a consent agreement only covers the current use of the marks.

In summary, both trademark consent and coexistence agreements offer ways to manage potential conflicts over similar trademarks, but they serve different needs depending on the specifics of the situation and future business plans.