Trade Marks and Co-existence Agreements

A trade mark co-existence agreement enables two different businesses use a similar or identical trade mark to market products or services without necessarily interfering with the business of the other. Co-existence agreements are not uncommon. An agreement will typically set out the parties' rights, obligations and restrictions. The main objective of this type of agreement is to resolve a dispute before any arbitrary action.

The Trade Marks Act 1994 governs the registration of trade marks and seeks to prevent conflicting trade marks being registered through "Relative Grounds" for refusal. These grounds are constructed to prevent the registration of a mark where the mark is identical or similar to an earlier mark registered in respect of identical or similar range of goods or services.

The UK Intellectual Property Office, along with many other European Intellectual Property Offices, has long sought to verify that a mark subject of an application does not conflict with an earlier registered mark, refusing registration if it does. However, there has been a recent shift towards leaving it to objecting parties to take action against conflicting marks by brining opposition proceedings. The result of this is that whilst the initial registration process may appear simpler, there is a risk of further cost at a later stage, when the owner of an earlier mark, or another objecting party, brings opposition proceedings.

Rather than litigating opposition proceedings, parties may turn to a co-existence agreement for a time-saving, low cost solution enabling the parties to avoid potentially lengthy and costly opposition proceedings. A key risk in entering into a co-existence agreement is limiting potential future expansion, for example expanding a product range and entering new markets or industries. Expansion might be limited because a co-existence agreement may specify (and limit) the products and markets in respect of which a part is permitted to use a mark.

If you have any questions on the above please do not hesitate to contact the team at McDaniel & Co. on 0191 281 4000 or legal@mcdanielslaw.com.