A contract between two companies to utilize a common name for marketing purposes but without interfering in each other’s businesses is referred to as a coexistence agreement. These agreements are often signed as they only require local use of their trademarks. This means that other businesses that use the same brand will not affect their profits. Designs, as well as copyrights and patents, can be protected under Co-existence agreement.
A company usually registers its trademark to prevent confusion among customers and/or misuse of its valuable brand. If two trademarks are extremely similar, the likelihood of confusion among consumers is really high.
Need For Co-Existence Agreement For Trademarks
Therefore, considering the huge variety of companies that are founded every year and their capacity to grow quickly and rapidly growing, it’s not uncommon to find two or more organizations to use remarkably similar marks but not know about each other.
This is most often the case when companies operate in distinct geographical areas or provide separate services. While it is important to register the trademark as soon as is possible and urging competitors to rebrand could be a possibility in certain instances, many companies would prefer to stay clear of the threat of prolonged disagreements or litigation (especially in the event of the existence of a trademark that is common law). Instead, businesses should make trademark coexistence or consent agreements that allow each party to use and register the mark.
Benefits of Co-Existence Agreement
A company usually registers its trademark to prevent confusion among customers and/or misuse of its valuable brand. However, considering the huge variety of companies that are founded every year and their capacity to grow quickly and rapidly growing, it’s not uncommon to find two or more organizations to use remarkably similar marks but not know about each other. This is most often the case when companies operate in distinct geographical areas or provide separate services.
While it is important to register the trademark as soon as is possible and urging competitors to rebrand could be a possibility in certain instances, many companies would prefer to stay clear of the threat of prolonged disagreements or litigation (especially in the event of the existence of a trademark that is common law).
The prevention of trademark infringement is better over treatment and cheaper. One of the primary precautions to be taken when applying for trademark registration is to do the most thorough research feasible with the assistance of experts who are trained to handle the task. A thorough search for trademarks will lower the chances that a business will come with a similar mark after it has entered the market. But, no search is completely error-free. In the event that the field was not spelled out wide enough, or it didn’t include other categories of goods and services which might affect the validity of the proposed trademark It could be found that similar and confusingly related trademarks are in use.
Consent Agreement
One type of coexistence agreement is a consent agreement. To gain registration, trademark owners can include a consent form in the dossier of trademark prosecution. The most effective way for trademark applicants of convincing the examiner that their mark isn’t likely to create confusion in the trademark listed against their application is usually an agreement to consent. The rights of the individual seeking permission are limited however, it does not cover coexistence over the long term in detail. A consent agreement is considered to be proof of the absence of risk of confusion without conflicting evidence. The reason for this is that the parties most affected by the possibility of miscommunication among customers have stated that this won’t be a possibility.
Limitations of Co-Existence Agreement
- Senior users would have no reason to enter into a co-existence agreement in the event that one of the parties has the status of being the most senior as well as the trademark holder is approached by another junior user of an identical mark in the same area.
- The trademarks of both parties as well as rights in law could be affected due to co-existence agreements. It could be more difficult to enforce your trademark right against third parties when your rights to trademarks are reduced.
- The loss of trademark rights and dilution could have a negative impact on the worth of your company’s brand. Furthermore, allowing the use of an identical trademark to or similar to your own could hinder the growth of your business.
- Because the quality of products or services offered by a third party is not under your control, the trademark may mark a poor reputation that will ultimately affect your products or services.
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