Trademark coexistence agreements explained

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 when two businesses have coexisting rights and can benefit from a shared marketplace without causing consumer confusion – in these situations the TM coexistence agreement provides 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 co-existence agreement is to resolve a dispute over similar or identical trademarks, the parties under the agreement might agree to watch over the rights of the counter party in the respective territories.

    What are the benefits of the trademark coexistence agreements?

    Entering into a trademark coexistence agreement offers several advantages for the parties involved in the trademark dispute:

        • avoiding legal fees and saving time

      Instead of spending on infringement proceedings and tarnishing the business relations with competitors, parties can negotiate terms for peaceful agreement and thus maintaining good business relations. Such an agreement is a 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 relation, brand recognition and preservation of goodwill.

          • clarifying definitively each party’s rights

        Having such an agreement executed is beneficial for the future relation of the parties, because it provides clarification of either party’s rights. If drafted carefully by IP legal professionals, the agreement aims to clearly outline the rights and limitations regarding the use of the trademarks. Such an agreement provides prevention against misunderstanding between the parties and reduces the likelihood of future disputes, and also provides them with ways to control and manage the use of their TMs.

            • benefiting from inclusion of 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’ infringement, filing for joint claims, sharing the respective 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 before the start of the negotiations:

              1. What is the geographical area that is the most profitable for your business?
              2. What is your 5-/10-/15-years business strategy in terms of entering new markets?
              3. What is your 5-/10-years business strategy in terms of including new products/services in your portfolio?
              4. What kind of digital or BTL marketing campaigns is more beneficial for your business?
              5. What is your target consumer group?
              6. What will be your initial proposition to the other party in case there are third parties that infringe on both trademarks?
              7. For how long do you wish to agree on a trademark coexistence agreement?
              8. Would you like to be able to continue to file for trademark registration of the same or similar sign on other territories?
              9. Who possesses what domain names and how will you address this issue?
              10. Can the parties use each other’s trademarks as ad words?
              11. What is the quality of the goods/services of each Party? Will difference in the quality tarnish the reputation of the trademark of the other party?
              12. Think about the government law of agreement.
              13. Think about the advantages of including a WIPO arbitration clause.
              14. Consider any specifics that are unique for your industry/trademark/business strategy.

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