Coexistence agreement

The coexistence agreement is the contract by which the holders of two identical or similar trade marks, or of neighbouring distinctive signs, organise the respective use of their signs in order to avoid any conflict and any likelihood of confusion. It most often intervenes to end an opposition or a dispute, or to allow the registration of a later trade mark with the agreement of the earlier holder. The coexistence agreement is an unnamed contract, governed by ordinary law and by competition law.

The clauses of the coexistence agreement

First, the delimitation of the goods and services: each party undertakes to use and file its sign only for the goods or services allocated to it. Second, the territorial delimitation, where the parties operate on distinct geographical markets, and the delimitation of the forms of use: design, colours, addition of distinctive elements, distribution channels. Third, the undertakings not to oppose the other party’s filings within the agreed limits and not to challenge its rights. Fourth, the clauses on the duration, generally unlimited, on the transmission of the agreement to successors and on dispute resolution.

The limits of the coexistence agreement

The coexistence agreement binds only the parties. It is binding neither on the INPI nor on the EUIPO, which remain free to refuse a trade mark on an absolute ground, nor on third parties. The agreement cannot moreover organise a deception of the public: a coexistence creating real confusion as to the origin of the products could entail the revocation of the trade mark become deceptive. Competition law finally prohibits market delimitation agreements that go beyond what is necessary to avoid the likelihood of confusion. The applicable provisions are available on Légifrance.

Key points

In practice, the coexistence agreement is an effective tool of amicable settlement, often resulting from a mediation or a negotiation in the course of an opposition. It must be drafted with precision, because it binds the parties for the whole life of their trade marks and conditions their future developments. The firm negotiates and drafts these agreements and acts in disputes over their performance, as part of its intellectual property practice.