Why might there be a need for a trade mark co-existence agreement?

The situation may arise, when aoods an enterprise whishes to register a new trade mark: the indented trade mark would be in conflict with a trade mark of a competitor who has registered his trademark already for a longer time. The enterprise with an older right may successfully challenge the new trade mark registration based on the merits that the new trade mark is identical or at least similar and is registered for identical or similar goods and servides. However, although the old and the new trade mark are identical or similar they necessarily do not confuse a customer, as for example the two enterprises, although their trademarks are in the same class, offer different products or services. Another reason that is not applicable to Monaco, but to other European Countries is that small businesses act within a limited geographical area or with a regional customer base so that the two enterprises are not interfering with each other’s businesses within the same country.

Trademark co-existence agreementa as part of conflict management

Also in the area of intellectual property prevention is better – and cheaper – than cure. We therefore recommend as a simple precaution when selecting and registering a new trademark, to undertake as comprehensive a search as possible. And not only in the trademark register, but also in other sources to identify also unregistered marks, which for example are recognized by Monaco trademark law and are enforceable by their owners in Monaco. In the event a potential risk has been identified, on request of the client we would approach the proprietor of the older rights and try to negotiate a trade mark co-existence contract that will be signed by the trade mark owner with the older rights and the new enterprise.

A typical situation is that a international enterprise is growing an is extending its market to a country, where so far they did not have a trademark. In the new country, which might be Monaco, a local business already has registered an identical or similar trademark or benefits from an unregistered trademark. Of course, the international enterprise would like to appear globally under one brand and wants to use its trademark also in the new country.

What is included in a trademark coexistence agreement?

In order to avoid a conflict in the future two enterprises may decide to agree that each of them may use his trade mark for his business and they wish to set the conditions for such a coexistence of their trademarks in a formal contract. In a trademark coexistence agreement, sometimes also called ‘letters of consent’ or ‘consent agreements ’both parties recognize the right of the other to their respective mark and agree the terms on which they may exist together in the market place. Such coexistence may be based on a division of the territories in which each holder may operate, or on a delimitation of their respective fields of use, i.e. regarding the goods or services on which they are used. The terms will set out what can and cannot be done with those rights in a way to ensure (theoretically) there is no confusion in the market. As long as each party operates his business within the limits (geographical, customer base, goods and services) they have contractually excluded any invalidation action of the trademark or a trademark infringement suit.