Consent Agreement Trumps Other DuPont Factors in Reversal of Section 2(d) Refusal

The Board reversed a Section 2(d) refusal to register WATERLOO SPIKED SPARKLING WATER for various alcoholic beverages (SPIKED SPARKLING WATER disclaimed), finding confusion unlikely with the registered mark WATERLOO NO.9 GIN for "spirits" [GIN disclaimed]. Under the 10th DuPont factor, the Board found that applicant and the cited registrant "carefully negotiated and crafted a mutually satisfactory written agreement that there is no likelihood of confusion." Quoting Bongrain, the Board observed: "[t]he parties operate in the 'real world,' and are thus in a 'better position to know the real life situation than bureaucrats or judges.'" In re Waterloo Sparkling Water Corp., Serial No. 90843090 (September 30, 2024) [not precedential] (Opinion by Judge Cheryl S. Goodman).

In weighing the probative value of a consent agreement, the Board considers the following non-exclusive factors: (1) Whether the consent shows an agreement between both parties; (2) Whether the agreement includes a clear indication that the goods and/or services travel in separate trade channels; (3) Whether the parties agree to restrict their fields of use; (4) Whether the parties will make efforts to prevent confusion, and cooperate and take steps to avoid any confusion that may arise in the future; and (5) Whether the marks have been used for a period of time without evidence of actual confusion. See generally, In re Four Seasons Hotels Ltd.

The Examining Attorney, on the other hand, argued that the agreement is a “naked consent” and does not overcome the likelihood of confusion, because it neither (1) sets forth reasons why the parties believe there is no likelihood of confusion, nor (2) describes the arrangements undertaken by the parties to avoid confusing the public

The Board, acknowledging that the agreement does not "explicitly address" factors 2-5 in the same terms as Four Seasons, nonetheless found that the agreement "is more than a naked consent and is clothed."

[P]rovisions regarding efforts to prevent confusion or to cooperate and take steps to avoid future confusion “may render the agreement more probative, but it is not an essential provision for the agreement to have probative value." Obviously, "the more information that is in the consent agreement as to why the parties believe confusion to be unlikely, and the more evidentiary support for such conclusions in the facts of record or in the way of undertakings by the parties, the more we can assume that the consent is based on a reasoned assessment of the marketplace, and consequently the more weight the consent will be accorded."

The Board found that the parties "plainly intended that Registrant’s current use and registration of WATERLOO marks for 'spirits' is permitted under agreed-upon conditions." The Board inferred from the requirement to deliver COLA labels to applicant that the parties have a system to avoid confusion and that these provisions "are substantively and essentially efforts to avoid actual and future confusion under factor 4 of Four Seasons."

Following the lead of Applicant and Registrant, we find the agreement more important than the similarities we may see in the marks, because the parties have agreed to minimize consumers’ exposure to the similarities, and draw their attention to dissimilarities, not just between Applicant’s and Registrant’s marks, but importantly between Applicant’s and Registrant’s “real world” marketing practices that impact (reduce) the likelihood of confusion.

[W]e accord this agreement weight and find the consent agreement supports Applicant’s position of no likelihood of confusion based on the reasoned analysis of Applicant and Registrant who understand the nature of their businesses. We should not substitute our views for theirs.

In short, we accept Applicant’s and Registrant’s views concerning the marks over any of our own, given the protections and restrictions set forth in the agreement.

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TTABlogger comment: In my view, naked consents are probative only in nudist colonies.

Text Copyright John L. Welch 2024.