Trademark Coexistence: How the Denver Nuggets and McDonald’s Chicken McNuggets Thrive Together

Trademarks play a crucial role in distinguishing and protecting the intellectual property of businesses, including startups and those launched by technology entrepreneurs. In this blog, we explore the trademark coexistence between the trademark DENVER NUGGETS, owned and used by a professional basketball team of the National Basketball Association (NBA), and the trademark CHICKEN MCNUGGETS, owned by McDonald’s Corporation. Join us as we delve into the fascinating world of trademark law and examine the coexistence of these two famous trademarks.

Understanding Trademark Coexistence

Trademark law grants exclusive rights to businesses or individuals over specific names, logos, or symbols that represent their goods or services. It allows consumers to identify and differentiate between products or services in the marketplace. Trademark law grants the exclusive right to use a word (brand name), phrase (slogan), or a symbol (logo) in advertising and marketing. In the case of the term “NUGGETS,” both McDonald’s Corporation and the Denver Nuggets of the NBA own trademark registrations that contain the term “nuggets,” raising the question of how two separate companies can have trademark rights to the same word.

Trademark coexistence refers to the situation where two similar or identical trademarks are used by different entities in a way that does not cause confusion among consumers about the source or origin of the goods or services. This can occur when the trademarks operate in different industries, geographic areas, or target different markets. Effective trademark coexistence relies on clear differentiation and strategic management to ensure that both marks can coexist without legal conflicts.

Key Aspects of Trademark Coexistence

1. Different Industries or Markets: Trademarks can coexist peacefully if they are used in completely different industries or markets. For instance, the term “NUGGETS” is used by both the Denver Nuggets, a professional basketball team, and McDonald’s Chicken McNuggets, a food product, without causing confusion due to the distinct nature of their industries.
2. Geographic Separation: Trademark coexistence can also occur when the trademarks are used in different geographic areas. If two companies operate in separate regions and their markets do not overlap, they can use similar marks without causing confusion.
3. Agreements and Consent: Trademark Coexistence agreements are formal agreements between trademark owners that outline the terms and conditions under which their similar or identical marks can coexist. These agreements often include provisions on how each party can use the mark, any limitations on use, and procedures for resolving disputes.
4. Distinctive Marketing and Branding: Even within the same or related industries, a trademark coexistence arrangement can happen if the branding, marketing, and overall presentation of the goods or services are sufficiently distinct. This helps consumers differentiate between the sources.

Legal Framework for Trademark Coexistence

The principle of trademark coexistence is supported by trademark law, which aims to protect consumers from confusion while allowing businesses to build and protect their brands. Key elements include:

1. Likelihood of Confusion Analysis: Courts and trademark offices use a multi-factor test (such as the DuPont factors) to assess the likelihood of confusion between two marks. If the analysis shows that consumers are unlikely to be confused, the marks may coexist.
2. Distinctiveness and Secondary Meaning: The inherent distinctiveness of a mark and its acquired distinctiveness through use can impact coexistence. Highly distinctive marks are less likely to coexist peacefully than descriptive or generic marks that have acquired secondary meaning.
3. Good Faith Use: Good faith use of a mark and the absence of an intention to cause confusion or deceive consumers are important considerations in determining coexistence.

Examples of Trademark Coexistence

• Apple Inc. and Apple Corps: One of the most famous examples of trademark coexistence is between Apple Inc., the technology company, and Apple Corps, the record label founded by The Beatles. Despite sharing the same name, the two companies initially operated in different industries. They have entered into several agreements over the years to manage their coexistence and prevent conflicts.
• Delta Airlines and Delta Faucets: Delta Airlines and Delta Faucets both use the name “Delta” but coexist without consumer confusion due to their operation in vastly different markets – air travel and plumbing fixtures, respectively.

Managing Trademark Coexistence

For businesses considering coexistence, it’s important to:

1. Conduct Thorough Searches: Perform comprehensive trademark searches to identify potential conflicts and assess the feasibility of coexistence.
2. Seek Legal Advice: Consult with experienced trademark attorneys to understand the implications of coexistence and to negotiate coexistence agreements if necessary.
3. Monitor the Market: Continuously monitor the market and your trademark’s use to ensure that coexistence remains effective and that no new conflicts arise.
4. Maintain Clear Branding: Ensure that your branding is distinctive and communicates clearly to consumers to minimize any risk of confusion.

Trademark coexistence is a practical solution that allows multiple businesses to use similar or identical marks without causing consumer confusion, provided they operate in different markets, geographic areas, or have distinct branding. Understanding the legal principles and strategic considerations of trademark coexistence is essential for businesses looking to protect their intellectual property while avoiding conflicts. Consulting with a trademark attorney can provide valuable guidance in navigating coexistence issues and ensuring successful brand management.

The Denver Nuggets Trademark

United States Patent and Trademark Office (USPTO) records show the Denver Nuggets are owners of U.S. Trademark Registration No. 6901393 for the word DENVER NUGGETS filed in International Class 041 for entertainment and educational services. These services include ongoing television and radio programs in the field of basketball, live basketball games and exhibitions, the production and distribution of radio and television shows featuring basketball, personal appearances by a costumed mascot or dance team, fan club services, and a website featuring multimedia material related to basketball.

The Chicken McNuggets Trademark

United States Patent and Trademark Office (USPTO) records also show McDonald’s Corporation is the owner of U.S. Trademark Registration No. 1276402 for the term CHICKEN MCNUGGETS filed in International Class 029 for chicken for consumption on or off the premises.

Nuggets Trademarks Coexistence

While both trademarks incorporate the term “nuggets,” it is essential to recognize that the Denver Nuggets operate in the sports and entertainment industry, while McDonald’s Chicken McNuggets belong to the food and restaurant industry. Since the entertainment industry and the food and restaurant industry are highly unrelated, under the law, these trademarks can coexist despite being identical and having a high degree of similarity.

The multifactor test for determining the likelihood of confusion in trademark law, commonly known as the DuPont factors, comes from the case In re E.I. du Pont de Nemours & Co., 476 F.2d 1357 (C.C.P.A. 1973). This test includes 13 factors that the United States Patent and Trademark Office (USPTO) and courts consider when assessing whether there is a likelihood of confusion between two trademarks. Here are the DuPont factors:

1. The similarity or dissimilarity of the marks in their entireties as to appearance, sound, connotation, and commercial impression.
2. The similarity or dissimilarity and nature of the goods or services as described in an application or registration or in connection with which a prior mark is in use.
3. The similarity or dissimilarity of established, likely-to-continue trade channels.
4. The conditions under which and buyers to whom sales are made, i.e., “impulse” vs. careful, sophisticated purchasing.
5. The fame of the prior mark (sales, advertising, length of use).
6. The number and nature of similar marks in use on similar goods.
7. The nature and extent of any actual confusion.
8. The length of time during and conditions under which there has been concurrent use without evidence of actual confusion.
9. The variety of goods on which a mark is or is not used (house mark, “family” mark, product mark).
10. The market interface between the applicant and the owner of a prior mark.
    • a. A mere “consent” to register or use.
    • b. Provisions in the trademark coexistence agreement designed to preclude confusion, i.e., limitations on continued use of the marks by each party.
    • c. Assignment of the mark, application, registration, and goodwill of the related business.
    • d. Laches and estoppel attributable to the owner of the prior mark and indicative of lack of confusion.
11. The extent to which applicant has a right to exclude others from use of its mark on its goods.
12. The extent of potential confusion, i.e., whether de minimis or substantial.
13. Any other established fact probative of the effect of use.

These factors are used to analyze and weigh the likelihood of confusion between two marks. Not all factors are always relevant in every case, and the importance of each factor can vary depending on the specifics of the situation. Courts and the USPTO will balance these factors to determine whether there is a likelihood of confusion that would warrant refusing the registration or use of a trademark. If there is no likelihood of confusion, then a trademark coexistence is possible.

Avoiding Likelihood of Confusion

Likelihood of confusion and trademark infringement are based on a multi-factor test, none of which are determinative. However, cases have determined that the most important factors to likelihood of confusion are the similarity of the trademarks and the proximity or relatedness of the businesses. In this case, since restaurant services by McDonald’s are highly unrelated to entertainment services and sports exhibitions by the National Basketball Association, there is no likelihood of confusion, and the trademark coexistence is possible.

The Flexibility of Trademark Coexistence

The trademark coexistence between the Denver Nuggets and McDonald’s Chicken McNuggets exemplifies the flexibility and adaptability of trademark law. Despite sharing a common term, these trademarks peacefully thrive in their distinct industries, enabling consumers to enjoy basketball excitement on the court and savor the taste of delicious chicken nuggets from McDonald’s. Understanding the nuances of trademark classification and consumer perception is crucial for businesses aiming to build and safeguard their brand identities.

To learn more, reach Chapter 3 of Tip-Top Trademarks dedicated entirely to likelihood of confusion analysis, and consult with an experienced trademark lawyer as needed to plan your brand protection strategy with minimal risk of trademark infringement.

For personalized guidance on trademark coexistence and other legal matters, contact L.A. Tech and Media Law Firm. Our experienced attorneys are here to help you navigate the complexities of trademark law and protect your brand.