New York Business Lawyers

Often I am confronted with clients who strike out with brand names for goods or services before conducting a trademark search or, even when they know that a third party may already have secured rights in said brand name. This often creates a situation where the client may have to butt heads with the owner/user of the same name.

When this situation arises, it’s not a simple “throw in the towel” affair.  Rather, there may be a contractual mechanism by which both parties can agree to “Co-Exist.”  Trademark coexistence is the situation where two separate and apart businesses both use a similar or identical trademark to market their goods and service, without interfering with each other. Hence the contract behind this potential relationship is called a “Co-Existence Agreement.”

This is not an uncommon arrangement. And this is precisely because small business trademark users often have a geographically restricted focus.   Sometimes, this scenario can create an opportunity to avoid litigation.  However, the opportunity might be squandered if, inadvertently the two businesses meander into the territories or goods and services of the other.

Entering into a formal co-existence agreement in order to prevent the overlapping of the two marks is sometimes the best course of action. The following details some the salient points to consider considering a coexistence agreement.

Preventative mark acquisition (i.e., conducting a trademark search) sometimes fails to disclose competing marks and sometimes such a search is simply overlooked, thereby leaving the possibility of using the same or a similar trademark as someone else. By using a formal trademark coexistence agreement, the parties go on the “record” to recognize the right of the other to use their particular mark, as well as  the terms upon which they may co-exist. This can often take the form of splitting territories in which each party claims a presence, or it may take the form of splitting the goods and services which the parties claim to sell.

The real challenge in setting up a viable coexistence agreement is for the businesses to properly stake out and delineate their goods, territories, etc., and then agree to be properly confined therein. The additional and often unheeded challenge, however, is to anticipate the future of the businesses in question. And this boils down to the critical “where do you see your business in 5, 10, 20 years?” Will the businesses cross paths in that timeframe in such a way that runs afoul of the co-existence agreement?

Hence this is a situation where the co-existence agreement could not anticipate the possible legal friction between the parties and litigation can ultimately ensue.  As a result, choosing a low cost, streamlined form of dispute resolution, such as mediation /arbitration is advisable.

The trademark process is a real process, meaning careful thought, planning, and consideration should be put into lately branding your goods and services. Nonetheless,  there are times that a conflict may arise in connection with the same or a similar trademark in the market.  And in those instances a co-existence agreement may be a viable and less expensive outcome than litigation.