Wine Not Wine & Trademarks: Trademark Solutions for Wineries: Navigating Consent and Coexistence Agreements

Introduction

In the world of winemaking, trademarks are important to defining a winery's identity. However, with numerous wineries operating globally, it's not uncommon for similar or even identical trademarks to emerge, leading to potential conflicts. In this blog post, we will explore how wineries and wine businesses can harmoniously coexist through consent and coexistence agreements, preserving their unique brands and preventing costly legal disputes.

I. The Significance of Trademarks in the Wine Industry

Protecting Identity and Reputation

Trademarks are more than names and logos: they represent the goodwill, essence, quality, and history of the wine within the bottle. In an industry where reputation is essential, trademarks are key to protecting a winery's identity.

The Perils of Trademark Conflicts

As the wine industry grows, so does the likelihood of trademark conflicts. Similar trademarks can lead to confusion among consumers, which can harm a winery's reputation and potentially cause financial losses (diverted and lost sales, etc.). Unfortunately, trademark infringement litigation is expensive. In some situations, wineries must find efficient and amicable resolution of their disputes.

II. What Are Consent and Coexistence Agreements?

Consent and coexistence agreements are two types of agreements in which brand owners, such as wineries, memorialize an agreement wherein they can use the same or similar marks in the marketplace.

Consent agreements are legal arrangements where one party consents to the use of a similar or even identical trademark by another party. These agreements are usually short and aim to avoid disputes by formalizing one party’s approval of another party using a similar mark under certain circumstances.

Coexistence agreements are usually more detailed and often place restrictions on both parties. These agreements might limit each party’s geographic expansion, product expansion, and/or display of its mark(s).

These agreements create a peaceful coexistence, provided the terms and conditions are adhered to.

III. Consent Agreements

How Consent Agreements Work

In consent agreements, one party acknowledges and consents to the other party's use of a similar trademark. This consent is often conditioned on specific terms and limitations.

Important Terms of a Consent Agreement

• Identification of the parties involved.

• A clear description of the trademarks in question.

• The specific goods or services to which the consent applies.

• The geographical scope of the consent.

• Any financial arrangements or compensation, if applicable.

• A termination clause in case either party breaches the agreement.

Common Scenarios in the Wine Industry

Consent agreements are frequently used when two wineries share similar trademarks. For example, if Winery A holds a trademark for GOLDEN VINE for sparkling wines, and Winery B wants to use a similar name (e.g., THE GOLDEN WINE VINE) for still wines, they may enter into a consent agreement specifying the conditions under which Winery B can use the trademark.

IV. Coexistence Agreements

Facilitating Concurrent Trademark Usage

Coexistence agreements are more robust, and typically outline how the trademarks will coexist without confusion.

Important Terms of a Coexistence Agreement

Identification of the parties involved.

• Detailed descriptions of the trademarks and the goods or services they apply to.

• The geographical areas where each party can use their trademark.

• Provisions preventing one party from challenging the other's trademark.

• Mechanisms for dispute resolution.

• Conditions for potential changes in the agreement, such as expansions or new product lines.

Examples in the Wine Industry

Imagine Winery C and Winery D, both of which produce wines under the mark VINECRAFT. To avoid confusion, they might draft a coexistence agreement specifying that Winery C will exclusively use the name for Cabernet Sauvignon, while Winery D will use it for Merlot. The agreement might also limit Winery C’s sales to states west of the Continental Divide and Winery D’s sales to states east thereof. This way, they can share the trademark without infringing on each other's rights.

V. Benefits of Consent and Coexistence Agreements

Avoiding Costly Legal Battles

By proactively engaging in consent or coexistence agreements, wineries can prevent harm to their brand and avoid expensive trademark disputes.

Maintaining Brand Identity

These agreements allow wineries to safeguard their unique brand identities, ensuring that their reputation remains intact among consumers.

Facilitating Cooperation and Collaboration

Consent and coexistence agreements encourage wineries to work together, fostering a sense of cooperation and collaboration within the industry. They also promote certainty and finality. That way, wineries can focus on their business not on trademark disputes.

Securing Trademark Registration

Section 2(d) refusals (i.e., likelihood of confusion) are one of the most challenging refusals to overcome for trademark applicants. Often, matters are beyond the applicant’s control. While there can be exceptions, consent and coexistence agreements frequently overcome these types of refusals.

A consent agreement may be submitted by an Applicant to overcome a refusal of registration under § 2(d) of the Act, or in anticipation of a refusal to register. TMEP §1207.01(d)(viii). Consent agreements are given great weight, and the Trademark Office is not supposed to substitute its judgment concerning likelihood of confusion for the judgment of the real parties in interest without good reason, that is, unless the other factors clearly dictate a finding of likelihood of confusion. Amalgamated Bank of New York v. Amalgamated Trust & Savings Bank, 842 F.2d 1270, 6 U.S.P.Q.2d 1305 (Fed. Cir. 1988); Bongrain Int’l Corp. v. Delice de France, Inc., 811 F.2d 1479, 1484–85 (Fed. Cir. 1987) (“We have often said, in trademark cases involving agreements reflecting parties’ views on the likelihood of confusion in the marketplace, that they are in a much better position to know the real life situation than bureaucrats or judges and therefore such agreements . . . carry great weight”); In re N.A.D. Inc., 754 F.2d 996 (Fed. Cir. 1985).

For reference, the author submitted a coexistence agreement in response to a Section 2(d) refusal on behalf of one client shortly before writing this blog post.

VI. The Role of Legal Counsel

Seeking Legal Expertise

To draft, negotiate, and execute these agreements effectively, wineries should enlist the services of experienced trademark attorneys. Attorneys can negotiate more favorable terms and ensure that the agreements are valid.

Trademark attorneys can also advise whether a consent or coexistence agreement is even a good idea for the winery or wine business. In some instances, these agreements may be a bad idea or unnecessary.

VIII. Conclusion

With the large number of wineries in existence, some of whom offer distinctive names for several different wines, it is not surprising that the market is saturated with creative names for wineries and the wines that they serve. As a result, wineries often step on each other’s toes with respect to their names. Enforcement is one option to resolving the issue. Consent and coexistence agreements are another. These agreements can offer wineries a harmonious way to coexist, preserving their individual identities while avoiding costly legal battles. By seeking legal counsel and understanding the nuances of these agreements, wineries can raise their glasses to a future filled with collaboration and fruitful partnerships in the world of wine.

If you would like to discuss a trademark dispute, consent or coexistence agreements, or other trademark issues for your winery with an experienced trademark attorney, please schedule a consultation here.