Settlement and Coexistence Agreement

To which brands of each party does the contract apply? How does it take into account the future changes and developments of these brands? Since settlement and coexistence agreements are generally perpetual, you should consider changes to each party`s trademarks over time. We recommend that you exercise caution when extending the agreement to trademarks other than those currently used by each party. A coexistence agreement occurs in a scenario in which two trademark owners have developed rights to identical or similar trademarks. This type of agreement aims to resolve a possible trademark dispute. Often, goods or services are offered in different geographical areas, are not linked or use different business channels. The agreement must set out in detail the rights of the respective parties and avoid any confusion in the market. Any party wishing to conclude a coexistence agreement must weigh the pros and cons of the agreement. In trademark law, a coexistence agreement is an agreement by which the parties, owners of similar or identical trademarks, decide to organize their coexistence under certain conditions. These conditions may vary depending on the circumstances faced by the parties. These conditions are intended to restrict trademarks, in particular their form, subject matter (the goods and/or services offered) or their territorial scope. The aim pursued by the parties is the peaceful use of their respective trademarks. Therefore, the coexistence agreement aims to put an end to conflicts (it then takes the form of a settlement agreement) or to prevent them. Penalty clauses often sanction coexistence agreements, and future dispute settlement clauses generally require alternative methods of dispute resolution of a confidential nature (mediation, arbitration, med-arb).

A trademark coexistence agreement should include the following: When negotiating, you should determine whether the settlement terms grant rights to competition or antitrust issues. For example, does the agreement include conditions that: The USPTO considers many relevant factors and evidence before concluding whether a trademark should be registered? In situations where the USPTO believes that the trademark applied for is likely to cause consumers to become confused with a previously registered trademark, the USPTO will attach great importance to a consent agreement between the applicant and the owner of the trademark. However, the consent agreement should be sufficiently detailed and include specific reasons and evidence as to why the parties concerned do not expect confusion among consumers and the explicit steps they will take to further reduce it. “Naked” consent agreements (which only include permission to register the trademark and a brief statement that confusion is unlikely) are far less convincing to the USPTO. Ultimately, a high risk of confusion for consumers due to extremely similar brands can void even the most detailed consent agreement. To file a coexistence agreement with the USPTO, an applicant (the party applying for trademark registration) must meet one of the following USPTO CRITERIA for “simultaneous use”: In which jurisdiction does the agreement apply? We recommend taking this into account at the beginning of the negotiations, because we have seen that negotiations become difficult when a party changes territory late in the room. Also ask yourself if you need to seek local advice if the agreement applies in various countries. A simple consent agreement is usually cheaper because it requires less time and resources to create. However, you get what you pay for, and a coexistence agreement certainly offers more protection.

A trademark consent agreement is usually a simple contract in which one party agrees to authorize the use and/or registration of a trademark that overlaps by another party. The parties also stipulate that their trademarks are not similar to consumers. Often, this type of agreement is used when a company has received or anticipates a registration rejection from the United States Patent and Trademark Office (USPTO). An emblematic example of a brand coexistence agreement is the agreement between Apple Corps and Apple Computer, in which the parties define their areas of activity. : Music for Apple Corps. ; Computer or Apple computer. The parties thus enjoyed a relatively peaceful use of their respective trademarks until the invention of iTunes, which led to a well-known legal dispute (Apple Corps Ltd v. Apple Computer Inc.). A trademark coexistence agreement should clearly include: all parties to the agreement, trademarks or logos intended to coexist, an agreement on the domain names used by each party, a list of territories and geographic areas where trademarks or logos where coexistence is permitted and not allowed, and any relevant plans for the expansion of the company.

In addition, the coexistence agreement should include the start and end dates of the agreement, a clause establishing the competence of the agreement and a dispute settlement clause. Consent agreements are quick and easy. If the registration of a trademark is urgent, a consent agreement is the way to go. When time is not an issue, a coexistence agreement offers better risk management and is more likely to be upheld in court. We see many agreements that contain clauses that state that the agreement is intended “for the benefit of rights holders and assigns” or similar. While this type of clause may have legal effect in some jurisdictions, in most common law countries (i.e., New Zealand, Australia, the United Kingdom), one can at best wonder what legal effect it has. We recommend that you explicitly state what happens when the brands or store in question are transferred. We consider it preferable to explain that in these circumstances, the seller or assignor must ensure that the buyer or assignee expressly agrees to be bound by the terms of the contract. You must be clear and concise about future uses and recordings to which each party consents. Since settlement and coexistence agreements are usually of indefinite duration, you need to consider the long-term effects that any obligation could have. As mentioned above, consent to use is potentially a perpetual, royalty-free license. The advent of electronic commerce has made it essential to use coexistence agreements on trademarks and domain names.

Priority search and monitoring of domain names reveal the existence of company identifiers whose legitimacy cannot be permanently questioned. Such circumstances should lead the parties to conclude a coexistence agreement. A company that intends to expand into new regions, industries, lines or brand designs should push for a coexistence agreement, not a consent agreement. This allows the company to address the potential risks it expects to see visible in the future and pave the way for more fluid growth. A consent agreement only allows current use without addressing the inevitable development of trademarks. A party who is clearly a junior trademark user (and not the first party to use a trademark) may have no choice but to request a consent agreement from the older trademark user (the first party who uses a trademark in the trade and usually registers it). However, if bargaining power is more equal between the parties, a coexistence agreement that lists issues of importance to both parties is likely to be in the interest of all. Bargaining power with respect to the use of trademarks may be created by the status of an older user, a famous or well-known trademark, or ownership of additional trademarks that the other party may be interested in restricting. What happens if a party transfers its trademarks to a third party? Should it ensure that third parties are bound by the agreement? What happens if a party sells their business to a third party? Should he be able to transfer the contract to the buyer without consent? What happens if the buyer is a competitor of the other party? We recommend including a general prohibition on assignment, with specific exceptions, to address the above issues as needed. The purpose of a trademark coexistence agreement is that trademarks are often used by several companies in “good faith.” The absence of a formal agreement does not undermine any company that uses the brand, as is the case in various parts of the world. However, as businesses grow, overlaps may develop and both parties may have significant rights to use the trademark.

In some cases, companies that develop and use the same or a similar trademark usually enter into a coexistence agreement to avoid using the trademark in an undesirable or counterfeit manner. Coexistence agreements can provide practical solutions for companies that fear being sued for trademark infringement, as proactive agreements can avoid the high cost of litigation. [1] A trademark coexistence agreement is an agreement between two parties to use a similar trademark for marketing purposes without invading each other`s business. Agreements of this type are often entered into because the parties only require the regional use of their trademarks and, therefore, the use of a trademark by other companies does not adversely affect their activities. Coexistence agreements can also include designs, copyrights, and even patents. [Citation needed] The coexistence agreement could also be considered, as the applicant does not appear to claim any commercial activity outside the United States […].