Coexistence agreements can be used to settle or avoid disputes where two parties wish to use similar marks for similar goods and services.
If registration of a trademark is legitimately opposed, it is worth considering whether the opposing party would be willing to enter into a coexistence agreement so that both marks can exist side by side. Agreeing to coexist can help to save the need for expensive litigation and can help each brand to specify what each mark is intended to cover which can help improve their functioning and ability to enforce against other infringers in the future.
It is important that the coexistence agreement does not unduly restrict a party’s future commercial activities. Parties should consider:
- the nature of rights: confirm the classes of goods and services for which relevant marks will be used by the parties. To what extent will either party be entitled or required to modify the mark and who will own which marks and whether the parties will need to make express statements on their websites or advertisements to stop the risk of consumer confusion;
- scope of use: confirm to what extent there will be any agreement to use marks in different sectors, territories, online or offline contexts or for keyword advertising;
- consideration: confirm what, if any, consideration will be payable under the agreement
- planning for the future: ensure that the terms of the agreement will not adversely affect any future plans for the business, including expansion of product lines;
- option to acquire: set out whether there is an option to acquire another’s trademark upon some event occurring in the future.