Coexistence Agreement: a Cost-Effective Response to a Likelihood of Confusion Refusal?

What is a likelihood of confusion rejection?

A rejection on the grounds of likelihood of confusion is basically a refusal to register your mark because the trademark examining attorney believes your mark is too close to a mark registered by someone else. Prevailing over a likelihood of confusion rejection in a trademark application can be challenging. A coexistence agreement can be a powerful way to overcome such a refusal.

Need a consent agreement to prevail over a likelihood of confusion rejection? Call patent and trademark attorney Vic Lin at (949) 223-9623 or email vlin@icaplaw.com to explore working with us.

To convince the USPTO examining attorney that your trademark is not confusingly similar to a cited trademark registration, you have at least two options:

1. Submit arguments regarding differences between your mark and the cited registered trademark; or
2. Get the owner of the cited registration to sign a consent agreement (aka coexistence agreement).

What is a coexistence agreement (consent agreement)?

If your trademark application has been rejected by the USPTO trademark examining attorney on the grounds of likelihood of confusion with a registered mark, you may want to explore a coexistence agreement (aka consent agreement) with the owner of the cited registration. Before contacting the registration owner, you should confirm that you have priority over the cited registration (i.e., earlier use) and that the cited registration is less than 5 years old.

In most cases, a sufficiently drafted consent agreement should prevail over a Section 2(d) refusal because the TMEP and case law say so. “Who better to gauge confusion in the marketplace than the market players themselves?” so the reasoning goes.

Why would the registration owner agree to coexist?

But, why would a trademark owner want to sign a consent agreement that would allow someone else to register an arguably similar trademark? Unless the trademark owner is willing to consent out of sheer kindness (unlikely), the applicant has to exert leverage to motivate the registrant to make a concession. And, that leverage typically comes in the form of the applicant having priority over a trademark registration that is less than 5 years old.

In other words, a registered mark that has not yet reached incontestable status is vulnerable to cancellation on the basis of priority. To avoid a costly litigation that could result in the cancellation of the registration, a trademark owner may be willing to negotiate a consent agreement with an applicant who can prove earlier use in commerce.

Leverage could also come in other forms such as exposing a weakness or potential invalidity of the registration. Examples may include abandonment of the mark or partial abandonment for failure to sell certain goods or services which may very well be those that overlap with the goods/services of the applicant.

Of course, there are other ways to convince trademark registration owners to settle, such as business and financial incentives. Owners of incontestable registrations, however, are generally unmotivated to reach a deal simply because they don’t have to.

So, while a consent agreement may be a cost-effective option for overcoming a likelihood of confusion rejection under the right circumstances, the ideal strategy is to file trademark applications promptly. That way, you can altogether avoid the messy situation of being a senior user / junior applicant trying to clear the hurdle of a junior user / senior registrant.

How do you get a signed consent agreement?

Generally, a successful outcome involves the following steps:

1. Due diligence to confirm trademark priority and develop convincing arguments to present to the registration owner. Cost: $500;
2. Contact the registration owner or their counsel to explain why it is in their best interest to sign a consent agreement. Cost: $500 to $1,500;
3. If the registration owner is willing, draft consent agreement and present it to the registration owner. Cost: $1,000 to $2,500;
4. Submit signed consent agreement to USPTO. Cost: $500.

You do not necessarily need to wait for an Office Action to take the above steps, but it might make sense to wait in case the trademark examiner decides to allow your application without a rejection.