Why a Trademark Consent Agreement May Not Overcome a Section 2(d) Refusal
GODZILLA X KONG Shows Why Consent Alone May Not Resolve Likelihood of Confusion
A company trying to register a trademark sometimes encounters an unusual situation: the owner of the trademark cited against its application does not object to the registration, but the United States Patent and Trademark Office still does.
That is essentially what happened with applications for GODZILLA X KONG: THE NEW EMPIRE. Legend IP Holdings Production, LLC obtained consent from Toho Co., Ltd., owner of earlier GODZILLA and GODZILLA-formative registrations, but the Trademark Trial and Appeal Board nevertheless affirmed refusals to register Legend’s marks.
The decision illustrates an important distinction for trademark owners. Getting another company to say “we consent” may resolve the dispute between the businesses, but it does not necessarily resolve the USPTO’s separate concern about whether consumers are likely to be confused.
For businesses negotiating trademark consent and coexistence agreements, that distinction matters. A useful agreement should not merely document permission. It should help explain why coexistence makes sense in the actual marketplace.
Why GODZILLA X KONG Was Refused Registration
Section 2(d) of the Lanham Act permits the USPTO to refuse registration of a trademark when its use is likely to cause confusion with a previously registered mark. These refusals frequently turn on the similarity of the marks and the relationship between the relevant goods or services, although the USPTO considers multiple factors depending on the record.
In In re Legend IP Holdings Production, LLC, the TTAB considered Section 2(d) refusals involving twelve applications for GODZILLA X KONG: THE NEW EMPIRE. The refusals were based on earlier GODZILLA and GODZILLA-formative registrations owned by Toho.
Legend submitted a License and Consent Agreement with Toho in an effort to overcome the refusals. The agreement authorized Legend to pursue registration of marks incorporating Toho’s intellectual property, but the TTAB concluded that the agreement provided relatively little evidence addressing how the parties would avoid consumer confusion in the marketplace.
The fact that Toho consented therefore mattered, but it did not end the likelihood-of-confusion analysis.
Why the TTAB Considered the Agreement a “Naked” Consent
Consent agreements can be important evidence in a likelihood-of-confusion analysis. The businesses themselves may understand their products, customers, trade channels, branding, and commercial relationship particularly well. An agreement explaining why those businesses believe confusion is unlikely can therefore provide meaningful information.
But the TTAB distinguished that type of agreement from what it characterized as a “naked” consent.
The agreement established that Toho consented to Legend’s registration efforts, but it did not contain meaningful provisions explaining how marketplace confusion would be avoided. The record did not establish concrete safeguards for reducing confusion, meaningful commercial boundaries between the parties, or a mechanism for addressing confusion if it occurred.
That distinction gets to the central issue. Consent tells the USPTO what the trademark owner is willing to permit. A well-developed coexistence agreement can also help explain why consumers are unlikely to be confused.
Those are not necessarily the same thing.
Intent-to-Use Applications Created Another Problem
Legend faced an additional evidentiary problem because its applications were filed on an intent-to-use basis.
When two businesses have operated concurrently for a meaningful period, they may be able to present evidence about what actually happened in the marketplace. If customers encountered both marks under the conditions contemplated by the agreement without meaningful evidence of confusion, that experience may become relevant to the analysis.
Legend did not have that kind of established U.S. marketplace history for the applied-for uses. Because the applications were based on an intent to use the marks, there was no comparable record of actual concurrent use demonstrating how consumers responded when encountering the respective marks.
That made the agreement itself more important. Yet the agreement was directed primarily toward permission to pursue registration rather than establishing detailed operating rules for marketplace coexistence.
For businesses negotiating consent before a new mark launches, the case illustrates why the agreement may need to do more of the analytical work when a history of successful coexistence does not yet exist.
Consent to Registration Is Different From a Coexistence Plan
The practical distinction is between permission and proof.
Permission from the owner of a cited registration can be valuable. It can eliminate an immediate dispute between the parties and establish that the senior trademark owner does not object to the proposed registration under the agreed circumstances.
The USPTO, however, has a separate responsibility to evaluate likelihood of confusion. A consent agreement can become more persuasive when it provides facts and commitments that bear directly on that question.
Depending on the businesses and marks involved, an agreement might address differences in products or services, customers, sales channels, territories, fields of use, branding practices, or other marketplace circumstances. It might also establish measures intended to reduce confusion and procedures for responding if actual confusion develops.
The appropriate provisions depend on the particular relationship. The lesson from GODZILLA X KONG is not that every consent agreement needs to be lengthy. It is that the substance of the agreement matters more than merely obtaining a signature.
A Trademark Coexistence Agreement Should Reflect the Actual Business Relationship
There is also a broader business reason to approach these agreements carefully.
A trademark consent agreement should not be drafted solely as a document for an examining attorney. If two businesses expect similar marks to coexist, the agreement can help define the commercial boundaries governing that coexistence.
That may require thinking beyond the immediate registration problem. What products can each company sell? Can either expand into adjacent markets? Are particular channels or customer groups important? What happens if branding changes? What happens if customers actually become confused? Does the agreement bind successors or acquirers?
Those questions can matter long after the USPTO examination ends.
A narrowly drafted consent might help one party pursue an application while leaving important commercial questions unresolved. Conversely, an agreement that restricts one party too broadly could solve today’s registration problem while unnecessarily limiting tomorrow’s business opportunities.
The better objective is therefore not simply to obtain consent. It is to design a workable commercial relationship in which the trademark rights and marketplace rules support what the businesses are actually trying to accomplish.
The Business Lesson for Trademark Owners
Trademark owners sometimes approach a Section 2(d) refusal as an obstacle standing between the application and registration. From that perspective, obtaining consent from the owner of the cited registration can look like the solution.
The GODZILLA X KONG decision demonstrates why the analysis should go one step further. The real question is what will keep customers from mistakenly believing that the relevant goods or services come from the same source or are otherwise connected in a way that they are not.
Once the parties understand those risks, their agreement can address the commercial distinctions and safeguards that make coexistence workable. The resulting document is then more than permission to register—it reflects how the parties expect their brands to coexist.
That approach can serve two purposes at once: it may provide more meaningful evidence in the registration process, and it can give the businesses clearer rules for managing their relationship after registration.
Takeaways
Consent does not automatically overcome a Section 2(d) refusal. The USPTO retains responsibility for determining whether the applied-for mark is likely to cause confusion with an existing registration.
Permission and coexistence are different concepts. A registrant’s willingness to permit another registration does not necessarily explain why consumers are unlikely to be confused.
The substance of the agreement matters. Commercial boundaries, marketplace distinctions, safeguards against confusion, and procedures for addressing problems can make a consent agreement more meaningful.
A history of successful coexistence can matter. Intent-to-use applicants may lack marketplace evidence demonstrating that consumers have encountered both marks without apparent confusion.
Do not draft solely for the examining attorney. A coexistence agreement should also provide workable rules for the businesses that will operate under it.
Consider future commercial freedom. Restrictions designed to solve today’s registration problem should be evaluated for their potential effect on future products, markets, licensing, acquisitions, and brand expansion.
The larger lesson is that a trademark consent agreement should be built around the marketplace, not merely the registration record. The more clearly the agreement addresses why consumers are unlikely to be confused—and how the parties intend to preserve the distinctions between their brands—the more useful it may be in responding to a Section 2(d) refusal.
Klemchuk PLLC is a leading IP law firm based in Dallas, Texas, focusing on litigation, anti-counterfeiting, trademarks, patents, and business law. Our experienced attorneys assist clients in safeguarding innovation and expanding market share through strategic investments in intellectual property.
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