Last week I captured a few eye-popping photographs of a delivery truck parked in downtown Minneapolis promoting Kinky Liqueur, “a delightfully fruity fusion of super premium vodka“:

And my hunch — that scratching the surface of this interesting brandname would reveal a worthwhile trademark story — actually paid off.

As it turns out, Kinky Liqueur didn’t have a straight shot at federal registration with the USPTO since an Australian company already owned two federal registrations for some Kinky marks for rum: KINKYNERO RUM and KINKYLUX RUM. Not surprisingly, the USPTO found likely confusion when Kinky Liqueur sought to register KINKY for distilled spirits and liqueurs, and its weak attempt to argue otherwise was not successful.

This then led a rather determined Kinky Liqueur to file a pair of petitions to cancel the blocking registrations, on fraud grounds, see here and here. The Australian company claimed otherwise, but it ended up settling the dispute with Kinky Liqueur.

The key question to be answered when resolving these kinds of trademark disputes is: Do you want to end up with weak and narrow national rights (consent agreement) or broad and strong geographically-limited rights (concurrent use agreement)? The parties here opted — perhaps reluctantly — to water-down the strength and scope of their respective rights by choosing the former option, presumably because both have their eyes on a national market and don’t want to divide up the country into two non-overlapping geographic territories.

Trademark counsel should strongly encourage their clients to think hard about whether dividing up the country into separate markets is really not a viable option since the consequence of not doing so is significant from a trademark perspective.

In a resolution using a concurrent use agreement, the parties end up dividing the country — and the fact that no geographic overlapping use is permitted provides the basis for convincing the USPTO that there is no likelihood of confusion, and if the USPTO agrees, it can issue trademark registrations to unrelated parties for even identical marks in connection with identical goods, so long as the entire geography of the U.S. is accounted for between them and there is no overlap of geographic territory. This approach is ideal for companies who have a limited geographic market and desire broad and strong rights within that area.

In a resolution using a consent agreement, as the Kinky example illustrates, the parties publicly admit to the absence of any likely confusion, even in the case of overlapping geographic markets, which gives third parties a strong basis for pointing to the agreement (a public record now), to justify their entry into the same market under yet another Kinky brand name.

The Kinky trademark agreement is interesting in that it forbids either party from publishing the Agreement or any of the terms of the Agreement, while at the same time it permits disclosure to the assigned Examining Attorney at the USPTO — that is, by the way, how we obtained a copy from the online trademark file at the USPTO – so, it is a matter of public record, it is not confidential information. No matter how one pours the drink, giving the USPTO a copy of the agreement to overcome a registration refusal amounts to a public airing of the terms of the Kinky agreement.

The Kinky trademark agreement also appears designed to deny the natural consequences of the consent agreement option by including this provision:

“This Agreement is to operate as a resolution of the pending trademark dispute only as between the parties hereto, and it is understood that the parties expressly reserve the right to prosecute suits and claims against any and all other entities or persons that may use like or confusingly similar marks to either of the parties’ trademarks.”

Notwithstanding this provision, the significant hurdle both parties will face in future trademark enforcement efforts will be explaining to the factfinder how their target’s use of a Kinky mark for another distilled spirit product is somehow likely to confuse consumers when these coexisting Kinky marks have been admitted to not result in any likelihood of confusion:

 

  

How likely do you think it is we’ll see yet another’s Kinky spirit to pour over the rocks?