When Can the Trademark Office Refuse or Limit a Coexistence Agreement ?

 

When it comes to trademark applications, the road to registration can be riddled with hurdles. For example, the Trademark Office may issue a refusal due to a likelihood of confusion with a registered trademark. 

Suppose the applicant and the owner of the cited mark agree to a coexistence agreement. Does the Trademark Office have to accept the coexistence agreement and cancel the refusal?

This very question was at the heart of a recent landmark case in Israel. The outcome might just surprise you!

The Initial Setback

An application was filed for the trademark CVISKAL under class 3, designated for laundry products. However, it hit a snag when the Trademark Office refused the application due to its similarity to an already registered mark, CVISCAL, also in class 3. This refusal was grounded in concerns over potential market confusion between the two marks.

A Path to Coexistence

In response, the applicant and the owner of the registered mark CVISCAL reached a coexistence agreement, which was subsequently submitted to the Trademark Office. This agreement was intended to resolve the issue and allow both trademarks to coexist peacefully in the market.

However, the Trademark Registrar decided to impose a limitation on the agreement, stipulating that CVISKAL’s laundry products could only be sold to institutions.

The applicant found this restriction unacceptable and filed an appeal to the District Court, arguing that the agreement should have been accepted without additional limitations.

The Appeal

The applicant contended that the Trademark Registrar should have respected the coexistence agreement as it was, without imposing further restrictions.

On the other hand, the Trademark Registrar maintained that he possessed the discretion to reject or limit coexistence agreements to prevent market confusion, in line with his responsibility for the trademark registration system in Israel.

The District Court’s Decision

The District Court ultimately sided with the applicant, accepting the appeal. The Court agreed with the Trademark Registrar that both marks are confusingly similar, and that the Registrar has the authority to limit the list of goods in registration to avoid confusion.

However, it ruled that the Trademark Registrar should have considered the specific circumstances surrounding the coexistence agreement.

The Judge distinguished between two types of refusals:

1. Relative Refusal Based on Registration: This occurs when a trademark application is refused due to its similarity to an already registered mark. In such cases, a coexistence agreement between the applicant and the owner of the cited mark is typically aimed at overcoming the refusal.
2. Parallel Applications: This occurs when similar or identical trademarks are applied for, but neither has been accepted yet. Both applicants might receive refusals and enter into a coexistence agreement to resolve the issue.

Coexistence in Parallel Applications

In cases of parallel applications, the court acknowledged that the Trademark Registrar has the full authority to reject a coexistence agreement, as both parties are primarily motivated by their interest in getting their marks registered. This shared interest might lead them to overlook public interests and the potential for market confusion.

According to Israeli law, if two or more trademark applications are filed for similar or identical marks intended for related goods or services, and none of these applications has been accepted yet, the Trademark Office initiates interference proceedings under Section 29 of the Trademarks Ordinance.

These proceedings determine which application will prevail and proceed to registration, unless coexistence is possible. During interference proceedings, applicants must consider the possibility of reaching a coexistence agreement to resolve the conflict.

Coexistence in Relative Refusals

However, in the case of relative refusals based on registration, the court took a different stance. When the owner of a registered mark agrees to coexist with the applicant, both parties have a vested interest in preventing market confusion and differentiating their products.

Therefore, the public interest is effectively safeguarded by the parties themselves. Over-intervention by the Trademark Office, such as limiting the list of goods beyond the agreed terms, could harm the parties’ interests and unfairly benefit third parties.

The Court’s Final Ruling

Eventually, the court decided to accept the coexistence agreement without the limitations imposed by the Trademark Office. This decision highlighted the importance of considering the specific circumstances and interests of the parties involved in a coexistence agreement.

Strategic Implications for Trademark Applicants

This decision is crucial for trademark practitioners, highlighting that applicants need to understand the nature of the refusal they face:

For refusals based on another application, coexistence agreements could be rejected, leading to litigation and interference proceedings where both parties must prove their right to the mark.

For refusals based on similarity to a registered mark, coexistence agreements are likely to be accepted without additional limitations.

This ruling underscore the importance of strategic planning in trademark registration and the handling of coexistence agreements.

**Disclaimer:** This article is for informational purposes only and does not constitute legal advice. For specific legal guidance, please consult a licensed trademark attorney