Business and Branding: Trademark Coexistence

What is Trademark Coexistence? 

A trademark coexistence agreement is born in a situation whereby two trademark owners agree to use marks identical or similar to each other, but with limitations imposed on the use of these similar marks. Typically, trademark owners may choose to enter such an agreement to avoid trademark disputes, which can be a drain on time, effort and finances. Both parties will need to detail the rights of each trademark owner and means to avoid consumer confusion in the marketplace. As long as both trademark owners operate according to what is agreed in the trademark coexistence agreement, no trademark infringement or litigation should occur. 

Is Trademark Coexistence right for my business? 

Two trademark owners entering a coexistence agreement can be equally beneficial to both parties. For example, two small business owners dealing in different trades, or selling differentiated goods or services, may want to continue to operate under their initial mark without the hassle of rebranding or taking another business owner to court. Under these circumstances, a coexistence agreement is a fair compromise for both parties, as long as the agreement is carefully drafted. 

Avoiding consumer confusion must be taken into account and the agreement can entail the following details to fulfil the aforementioned obligation: 

  • Limiting use of each trademark to well defined geographical areas
  • Limiting use to distinct distribution channels 
  • Limiting use to distinct goods or services 
  • Limiting use to distinct holidays or seasons
  • Limiting the ways of displaying the trademark

Can I be at a disadvantage in a Trademark Coexistence agreement?

Unfortunately, it is possible to be in a less favourable position in some coexistence agreements. Such a situation would stem from engaging in an agreement with a business whose reputation has been established for a longer period of time, or if the brand has become relatively well known in the consumer market. Entering a coexistence agreement with a business as such may impact your marks negatively in several ways. 

For example, you may find yourself limited to trading under very few categories of goods and services. It is likely that the leading business may already be trading in the categories of goods and services you are hoping to expand your business in. Small business owners may not be concerned with an issue as such in the short term, however if you are looking to expand your business in terms of offering a greater range of goods and services or to other geographical areas, it is advisable to conjure a long term plan and consider if entering a coexistence agreement is the best choice for your business in the long run. 

Trademark coexistence agreements can be useful for resolving trademark disputes, however trademark owners should take the appropriate steps in considering if this decision is the right one for you and your business prior to committing to such an agreement. Finding it difficult to weigh up the advantages and disadvantages? Get in touch with our team of IP professionals for a free consultation today. 

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