Co-existence agreements: what are the benefits?

In the ever growing and crowded world of business, it is not surprising that different businesses sometimes want to trade under a highly similar or identical name. When this occurs, a co-existence agreement could be put in place to allow two or more parties to use their highly similar/identical trade marks and co-exist in harmony.

Benefits of a co-existence agreement

The key benefit in using a trade mark co-existence agreement is that it can regulate the use and registration of existing identical or highly similar trade marks.

These agreements are generally used to settle a pre-existing infringement dispute or to prevent any anticipated  disputes. A good example of this is ‘Polo’. The same ‘Polo’ word is used for businesses in unrelated categories (goods and services) such as cars and clothing. Where one is required, the agreement will set out the details of the rights of each party and how those parties will act to prevent any confusion amongst consumers within the marketplace.

Another major benefit of having a co-existence agreement is the avoidance of any formal proceedings. Having an agreement between two conflicting parties can limit their exposures by saving both time and legal costs. Once all parties sign a co-existence agreement, unless it is breached, there would be no need to involve the courts or the United Kingdom Intellectual Property Office (UKIPO). A co-existence agreement would therefore enable parties to maintain a good relationship instead of dwelling into lengthy and costly negotiations/legal proceedings.

It is important to note that although co-existence agreements are generally put in place as a ‘fair compromise’ between parties, there can be some instances where these agreements are prepared for the benefit of one party, with very little incentive for the other. Therefore, it is vital to ensure the agreement is set out in a way which benefits both the parties involved. Each party should ensure to take the time needed to determine both the pros and cons within their agreement and weigh up whether the agreement will expose their brand to any future risks.

If you are looking to register a mark that is highly similar or identical to an existing mark, it is crucial that you reach out to the trade mark owner/representative before registering as not all existing brands would be happy to have a co-existence agreement. Going ahead with an application without any prior contact/negotiations could find you in hot water as the owners of the brand may oppose your application. Therefore, to prevent lengthy and potentially costly disputes in the future, we always recommend opting for a brand name that is both distinctive and unique.

If you have any questions relating to setting up co-existence agreements or wish to register a trade mark, contact us today.

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