Negotiation of Coexistence Agreements: How to Safely Share a Trademark?
By Hanna Falkiewicz
Trademark Coexistence Agreements are created to allow the company to use the same trademark as another company that registered it before.[1] It is usually used in different geographic regions or for unrelated goods or services to avoid the confusion of consumers.[2] The negotiation of the coexistence agreement is a very important process in which the crucial conditions of usage of the trademarks are discussed. While creating the agreement we have to remember that it can have long-term effects and broad application. Therefore, it is important to consider the goals of the company and think about its possible future expansion before starting the negotiation. In addition, we cannot forget about the dispute resolution clause which deserves more attention than it is usually anticipated.
The first step of the negotiation is to define and describe the trademark. It should be clear for both sides which name or sign can be used and whether it can be modified or not. Also, the territoriality, so the area of usage of the trademark should be strictly defined. Thanks to that there will be no risk that the company which can use our trademark will enter the same market. It could create more competition and confusion among the clients. For the same reason, the goods and services for which the trademark will be used should be defined. Otherwise, the company which will receive the allowance for using the trademark may change the field and keep using the same mark in the future. It is advisable to restrict the coexistence agreement to the area in which the party seeking to obtain the rights currently trades, so there are fewer risks of having the company with the same trademark in the same field.
The big part of the trademark coexistence agreement is the obligation not to use. It is better to clearly define in which areas of goods and services the trademark should never be used to make sure that the company which will be allowed to use our trademark will not enter the same territory or area.[3]
There are also other issues that come with sharing the same trademark that should be clearly stated beforehand. Some of them, such as deciding who will have the priority to use the name on social media or hold the rights to the domain name are relatively new in the discussion. However, these aspects can determine which company will be more recognizable, easier to access online, and therefore more successful.
Lately, the termination and dispute resolution clauses shall be included. It can be considered to use the mediation of arbitration instead of traditional litigation in the case of the breach of the agreement. World Intellectual Property Organization is an important body that handles cases of trademark coexistence agreement. According to its statistics, 70% of cases in WIPO Center are resolved through mediation and 37% of arbitration cases are settled before the tribunal award is issued.[4] These numbers show how effective mediation and arbitration are compared to traditional litigation.
Surely, the negotiation of the trademark coexistence agreement is a very important step before allowing other companies to use the same mark. A well-negotiated agreement defines all aspects that may cause a problem in the future and helps to avoid the dispute. In case of some problems, it is worth referring to WIPO which has experience in resolving IP of cases. It provides for a fast, flexible, and confidential way of dispute settlement.