Coexistence agreements can be an easier and cheaper solution to disputes over trademark similarity between parties rather than litigation under appropriate circumstances.
When registering a trademark, one of the essential rules is not to choose a trademark that is confusingly similar to a prior existing trademark. However, in the world of business and commerce, it is possible for two parties to use similar or identical trademarks to market their goods and services by the help of coexistence agreements. The aim of this article is to provide an overview of the typical benefits and potential pitfalls of coexistence agreements.
What are the coexistence agreements?
A coexistence agreement is an agreement regulating the use and registration of similar or identical trademarks for related goods and services in the same or similar markets by two or more trademark holders. It allows the parties to set their own rules for peaceful coexistence of the marks without any likelihood of confusion.
Coexistence agreements usually work by way of limiting the expansion and use of similar marks to certain geographical territories or to certain types of goods or services. A coexistence agreement is also likely to contain provisions for marks that may not yet be in use.
A coexistence agreement can be used when one of the parties is aware that another business is trading, or about to do so, with a mark that might confuse its customers or damage its business or when one of the parties is worried that a competitor is seeking to register a trademark that might make it difficult for the party’s business to expand.
Potential benefits of a coexistence agreement include:
Potential risks include:
When not to use a coexistence agreement
Coexistence agreements can prove to be useful for resolving present or possible future uncertainties and difficulties between parties about the use of similar marks. However, such agreements are not recommended to be used if the trademark holder:
Coexistence agreements may provide legal opportunities and economic advantages that might prove useful for respective trademark owners and consumers under appropriate circumstances. However, it is critical that it is skillfully drafted to avoid any future conflicts. Co-existence agreements can be effective tools to resolve trademark disputes but parties interested in using such a tool should consider the implications in terms of their business of using such agreements in consultation with trademark lawyers before committing to engage in such an agreement.
Harris Kyriakides LLC, provides all the necessary and useful advice on all legal matters in relation to trademarks, including enforcement measures.