Trade mark coexistence agreement

A trade mark coexistence agreement is the contract by which the owners of two identical or similar signs mutually undertake to tolerate each other’s use and registration, by delimiting the goods, territories, forms of exploitation or get-up of each so as to rule out any likelihood of confusion. It is governed by no specific provision and falls under the general law of contract, subject to trade mark law and competition law.

Situations leading to an agreement

The agreement is most often concluded to end an opposition, an invalidity action or infringement proceedings, or to forestall them where a clearance search reveals a similar sign. It allows the applicant to secure withdrawal of the opposition and the earlier owner to regulate use of the later sign without bearing the uncertainty of a decision. It is common between businesses using the same name in separate sectors, where the principle of speciality is not enough to remove the uncertainty, or between businesses sharing a name that originate from the same family or a former group.

Content of the agreement

The agreement defines the signs concerned, including their future variants, and allocates the goods and services, territories, distribution channels and permitted get-up, for example a typeface, a colour or a mandatory figurative element. It contains undertakings not to oppose the other party’s filings, renewals and extensions within the agreed scope, not to sue for infringement and to cooperate if confusion arises. It deals with assignment of the agreement together with the trade marks, its duration, in principle unlimited, and termination for breach. An agreement that is too general, providing for neither new products nor territorial extensions, becomes a source of disputes after a few years.

Effects and limits

The agreement binds only the parties. It does not bind the offices, which retain the power to refuse an application on absolute grounds or, for EUIPO and INPI, to assess likelihood of confusion in an opposition brought by a third party, although a letter of consent from the earlier owner carries weight in practice. It does not prevent the revocation of an unused trade mark and does not cover liability towards misled consumers. It must comply with the rules on anticompetitive agreements, which prohibit agreements sharing markets beyond what is needed to prevent confusion. Tolerance arising from the agreement is distinct from limitation in consequence of acquiescence, which operates merely by the passage of time.

Key points

A coexistence agreement organises by contract the coexistence of similar signs by allocating goods, territories and get-up. It binds the parties but not the offices, and must remain proportionate to the prevention of confusion to escape the rules on anticompetitive agreements. Provide for future variants and extensions of the signs, transfer of the agreement with the trade marks and recording of the undertakings in both parties’ filing records.

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This glossary entry is general in scope and does not constitute legal advice.

Dhenne Avocats is a patent litigation firm. Matters outside that field, such as trade marks, designs, copyright and IT contracts, are handled by practitioners the firm works with regularly, and by the firm itself when they arise in a patent dispute.

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