The second approval agreement identified five reasons why the parties felt there was no likelihood of confusion. However, the auditor argued that this was always “naked” consent, as it did not describe the agreements reached by the parties to avoid confusion, that there was no express obligation for the parties to seek confusion or cooperate, and that it mixed up measures to avoid confusion in the future. A “naked consent agreement” contains little more than the consent of the registrant and sometimes a statement that confusion is considered unlikely. Naked consent agreements are generally not sufficient to overcome the likelihood of a refusal to confuse. First, this approval agreement was found insufficient because “the parties have agreed to authorize the use of their respective trademarks in the same territories and the registrant may use his trademark throughout the applicant`s territory.” However, the applicant “does not seek to record simultaneous use (with a corresponding geographical restriction when registering the filer), but at a federal registration.  The registrant also does not apply for geographically limited registration as part of the consideration given to the registrant for the conclusion of an approval agreement.” Co-existence agreements work in the same way as approval agreements in relation to the weight they have given to the USPTO. The more detailed and restrictive the agreement, the more likely it is that the USPTO will maintain its validity and authorize the simultaneous use of trademarks. However, customer confusion can still invalidate an otherwise legitimate agreement, particularly in areas closely related to the public interest, such as public health.B. In addition to the USPTO`s assessment of co-existence agreements, it is likely that the courts will enter into a co-existence agreement that would have negative effects on competition in the market or be contrary to antitrust rules. The TTAB decided that an approval agreement in which “competitors clearly conceived their business interests” was very important and that the examiner should not replace his judgment on the risk of confusion between two brands with the assessment of the parties of real interests.
As a result, TTAB rescinded the refusal to register the AMERICAN CONSTELLATION trademark. To submit a co-existence agreement to the USPTO, an applicant (the party applying for trademark registration) must meet one of the following USPTO criteria for “simultaneous use”: a company wishing to expand into new regions, sectors, lines or brands should insist that a co-existence agreement be concluded instead of an approval agreement.