Tipping the Balance Against Identical Marks with Detailed Consent Agreements

Overview

This case is a TTAB precedent.

The Trademark Trial and Appeal Board (TTAB) reversed a refusal to register the mark AMERICAN CONSTELLATION for cruise ship services and passenger transportation, setting a significant precedent regarding the weight of consent agreements between market competitors. The Board's decision hinged on the principle that marketplace reality, as defined by the parties actually operating within it, often outweighs theoretical assumptions of a likelihood of confusion made during ex parte examination.

Background

The Applicant, American Cruise Lines, Inc., filed an application seeking to register the mark AMERICAN CONSTELLATION in standard characters for cruise ship services; transportation of passengers by ship; and arranging and conducting cruises for others in International Class 39. This application was filed on May 17, 2016, under Section 1(b) of the Trademark Act, based on a bona fide intention to use the mark in commerce. During the prosecution, the Applicant filed an Amendment to Allege Use and claimed acquired distinctiveness under Section 2(f) for the word AMERICAN, while also disclaiming the exclusive right to use the word CONSTELLATION.

The Applicant filed an application seeking to register the mark AMERICAN CONSTELLATION in standard characters for cruise ship services, transportation of passengers by ship, and arranging and conducting cruises for others in International Class 39. The word CONSTELLATION was disclaimed.

The Trademark Examining Attorney refused registration under Section 2(d) of the Trademark Act, asserting that the Applicant’s mark so resembled the registered marks CONSTELLATION and CELEBRITY CONSTELLATION that it would likely cause confusion among consumers.

After the refusal was made final, the Applicant appealed to the Trademark Trial and Appeal Board.

How the Board Analyzed the DuPont Factors

DuPont #2, 3: Similarity of the Services and Channels of Trade

In this instance, the services identified in the application and the cited registrations were identical, including cruise ship services, passenger transportation by ship, and arranging cruises. The Applicant conceded in its briefing that the services were the same.

Because the services were legally identical, the Board applied the legal presumption that the channels of trade and classes of purchasers were also the same. The Applicant did not challenge this presumption on appeal.

The Board concluded that these factors weighed in favor of finding a likelihood of confusion, as the degree of similarity required between marks decreases when services are identical.

DuPont #4: Conditions of Purchase and Consumer Sophistication

The Applicant argued that the conditions of purchase for a cruise are not "average" and are instead based on careful research and investigation. This assertion was supported by a declaration from the Applicant’s Vice President of Marketing, who testified that customers are sophisticated and make purchase decisions based on travel goals and budgets. He noted that cruise customers perform research and learn during their investigations that numerous ships share common terms.

The second consent agreement submitted by the Applicant also supported the position that cruise consumers are sophisticated. The Registrant’s Chief Operating Officer, who signed the second consent agreement, stated that cruise ship consumers exercise a "heightened degree of care" and make "studied and sophisticated decisions."

The Examining Attorney challenged this evidence, arguing that the statements were self-serving and unsupported by additional external documentation. However, the Board criticized this position, noting that the Examining Attorney incorrectly disregarded the statements of industry professionals who work in the field daily.

The Board found that while the classes of consumers were the same, those consumers exercise a heightened degree of care, which weighs against finding a likelihood of confusion.

DuPont #1: Similarity of the Marks

In analyzing the marks AMERICAN CONSTELLATION and the cited CONSTELLATION, the Board evaluated their appearance, sound, connotation, and commercial impression. The Board focused its analysis primarily on the CONSTELLATION mark, noting that if no confusion was likely with that mark, it was even less likely with the more distinct CELEBRITY CONSTELLATION.

The marks were found to be similar because they shared the dominant word "CONSTELLATION." The Board observed that "CONSTELLATION" is an arbitrary term when used in connection with cruise ship services and is entitled to a broad scope of protection. Dictionary definitions established that "constellation" refers to groups of stars or configurations of related ideas, while "American" relates to the United States. Thus, the Board found that the marks had a similar meaning, as AMERICAN CONSTELLATION engenders the commercial impression of an American star or group.

The Board acknowledged that there is no bright-line rule that likelihood of confusion automatically applies when a junior user's mark subsumes a senior user's mark, but noted that such a circumstance increases similarity. Despite the presence of the word "American," the Board concluded that the marks were similar in their entireties, weighing in favor of a likelihood of confusion.

DuPont #10: Market Interface and Consent Agreements

The most decisive factor in this case was the market interface between the parties, manifested in the two consent agreements submitted by the Applicant. The Examining Attorney had argued that these were "naked" consents because they did not describe specific future arrangements to avoid confusion. However, the Board disagreed, defining a "naked consent" as one that contains little more than a statement of belief that confusion is unlikely.

The Board found that the second consent agreement was "clothed" with five specific, probative reasons for the parties' belief that no confusion would occur:

• The parties provided services in different areas of the world (though the Board noted this was not reflected in the service descriptions and thus gave it less weight).
• The Applicant agreed to always use the full mark AMERICAN CONSTELLATION and never "CONSTELLATION" alone.
• Customers exercise a heightened degree of purchasing care.
• Consumers recognize "American" as the Applicant’s house mark.
• Industry practice involves different lines using shared terms for ships without causing confusion.

The Board emphasized language from the DuPont decision, stating that

"when those most familiar with use in the marketplace and most interested in precluding confusion enter agreements designed to avoid it, the scales of evidence are clearly tilted."

The Board explicitly stated that the USPTO should not substitute its judgment for that of the "real parties in interest" unless other factors clearly dictate otherwise.

Thus, the consent to use and register Applicant’s mark weighs heavily against finding that there is a likelihood of confusion.

Board’s Decision

The Board reversed the refusal to register the mark AMERICAN CONSTELLATION. While acknowledging that the services were identical and the marks shared the arbitrary term "Constellation," the Board found that the evidence of consumer sophistication and the industry’s specific naming practices were significant. Most importantly, the Board held that the "clothed" consent agreements, signed by competitors who had clearly assessed their commercial interests, were entitled to great weight.

It is no surprise that a consent agreement is far more persuasive when it includes the specific reasons why the parties believe confusion is unlikely. The Applicant's second consent agreement included details about consumer sophistication, house mark recognition, and industry-specific naming practices. As the Board noted, the more information provided, the more the USPTO can assume the consent is based on a "reasoned assessment of the marketplace."

One piece of information that was included and given weight was the industry naming convention, especially given other overlapping marks the two parties use. To me, this brings to mind In re Connecting Forward (the Juneteenth pageant case), where MISTER JUNETEENTH was found not likely to cause confusion with MISS JUNETEENTH for pageants due to industry naming conventions and consumer familiarity with those patterns.