What is a trademark coexistence agreement?
A trademark coexistence agreement allows trademark proprietors to use similar or identical trademarks in specific geographic regions or for specific goods or services without infringing on each other’s rights.
In what kind of cases are TM coexistence agreements used?
Trademark coexistence agreements are used for various purposes:
- To terminate an opposition proceeding.
- In cases where two businesses have coexisting rights and benefit from a shared marketplace without causing consumer confusion. In these situations, the TM coexistence agreement helps create a structured and legally binding framework for both parties to operate with their respective trademarks in a way that minimizes the risk of infringement and legal disputes. In addition, while the essence of the TM coexistence agreement is to allow the use of similar or identical trademarks, the parties in the agreement might agree to switch over the rights of the counterparty in their respective territories.
What are the benefits of the trademark coexistence agreement?
Entering into a trademark coexistence agreement offers several advantages for the parties involved in the trademark dispute, such as:
- Avoiding legal fees and saving time.
Instead of spending on infringement proceedings and tarnishing the business relations with competitors, a coexistence agreement forms a legal agreement that avoids unwanted disputes. Such an agreement is mutually beneficial deal that allows both parties to maintain presence on the market. This is especially valuable in case the parties have made significant investments in marketing, consumer attraction, brand recognition and presentation of goodwill.
- Clarifying definitively each party’s rights.
Having such an agreement enforces the belief of a fair relation of the parties, because it provides clarification of either party’s rights. If drafted carefully by IP legal professionals, the TM coexistence agreement puts in place an action plan acknowledging the rights of both parties. Such an agreement is an optimal negotiation tool that helps resolve complex contracts and exclude the likelihood of future disputes, and also provides them with ways to forward maintain the user of TMs.
- Benefiting from licensing for provisions.
With TM coexistence agreements both parties will benefit from inclusion of provisions that are of mutual benefit. Such provisions might include informing each other in case of third parties’ legal claims on filed joint claims, sharing the registered legal costs, etc.
What you need to consider before entering a trademark coexistence agreement
In case you decide to proceed with a TM coexistence agreement, here are some important things you need to consider ahead of the start of the negotiations:
- What is the geographical area that is the most profitable for your business?
- What is your 5-/10-/15-years business strategy in terms of entering new markets?
- What is your 5-/10-/15-years business strategy in terms of choosing new products/services in your portfolio?
- Whose brand/ digital or BTL marketing campaigns is more beneficial for your business?
- What is your target consumer group?
- What will be your initial proposition to the other party in case there are third parties rights on both trademarks?
- How long do you wish to agree on a trademark coexistence agreement?
- What will be the battle control fee for the trademark registration of the same or similar sign of either side in future?
- Who possesses what domain names and how will you address this issue?
- Can the parties give each other’s trademarks and word marks?
- What shall be the goods and fee areas as per WIPO PCT? Will difference in the quality of the markup be damaging for the other party?
- Think about the acquisition of trademarks of the other party!
- Explain the benefits of a future agreement.
- Think about the agreement of including a WIPO arbitration clause.
- Clearly outline specific clauses in your IP four industry/trademark/business strategy.
For more information on trademark coexistence agreements or if you need assistance, please contact us.
