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Alcoholic Beverage Trademark Consent Agreements – Will the USPTO Be Scrutinizing Them More Closely?

It’s no secret to people in the alcoholic beverage business that finding a unique trademark to register is becoming increasingly difficult. A decade ago there were far fewer producers of alcoholic beverages and most had just one or two trademarks. Today there are thousands more wineries, breweries and distilleries – as well as importers – and many of them have not just one or two trademarks, but a portfolio of brands. This proliferation of products is great for consumers but has made it progressively harder to come up with a trademark that isn’t already in use on another alcohol product.

Compounding the problem is the fact that the U.S. Patent & Trademark Office (“USPTO”) considers all alcohol beverages to be essentially the same goods (as we previously blogged about here). When the goods are very similar, the USPTO requires less similarity between the marks to find that confusion is likely. As a result, a trademark registration for XYZ LAGER would probably prevent someone else from registering XYZ SPIRITS COMPANY or XYZ VINEYARDS, or even less similar variations, such as XYZ FABULOUS WINES or CHEZ XYZ.

One possible solution for a trademark applicant that gets a Section 2(d) refusal from the USPTO based on a similar trademark is to enter into a “consent agreement” with the owner of the registered trademark. If two parties with similar trademarks agree between themselves that they don’t think confusion is likely, or can be mitigated (e.g., by ensuring that the parties use dissimilar labels and not make the same products), they can enter into a consent agreement. The USPTO has historically given such agreements great deference and will typically withdraw a refusal to register if the parties provide a consent agreement. But a recent precedential opinion of the Trademark Trial and Appeal Board (“TTAB”) reminds us that consent agreements are not always effective in securing a registration.

In In re Bay State Brewing Company, Inc., the USPTO was not swayed by a consent agreement between the applicant for TIME TRAVELER BLONDE and the registrant of TIME TRAVELER – both for beer – and did not withdraw the refusal to register TIME TRAVELER BLONDE. Serial No. 85826258 (Feb. 25, 2016) (precedential). The applicant appealed and the TTAB affirmed the refusal.

Why did the TTAB reject the consent agreement? They raised a few issues, notably that the agreement contained geographic restrictions for the use of applicant’s mark to avoid confusion (use limited to New England and New York only) but registrant was free to use its mark everywhere, so the marks would be used in overlapping areas, despite the limitation on applicant’s use. The TTAB also noted that a registration creates a presumption of nationwide trademark rights, but applicant’s rights were geographically limited by the consent agreement, so an unrestricted registration would be misleading to the trademark-searching public. The TTAB raised a few other issues related to restrictions on the parties’ use of their respective marks, but it appears that the USPTO and the TTAB were simply not comfortable with two registrations for “virtually identical marks on identical goods that are subject to impulse purchase by ordinary consumers in the same geographical area,” and no amount of trade dress restrictions would convince them that confusion could be avoided.

What does this mean for future consent agreements? The TTAB acknowledged that consent agreements still may be afforded great weight, and it is unlikely that we’ll see the USPTO begin to ignore consent agreements in Section 2(d) analyses. But the Bay State Brewing case reminds us that consent agreements are not a guarantee of registration and they should be carefully drafted to assure the USPTO that the parties can adequately avoid consumer confusion.

If you have questions about a trademark application or consent agreement, contact one of the attorneys at Strike & Techel.

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