Lexicon > Coexistence agreement

IP Lexicon

Coexistence agreement

A coexistence agreement is an agreement by which two parties (individuals and/or companies) agree to organize the coexistence of their respective rights in a market, according to the terms they define.

Often used in the field of intellectual property, and in particular in the area of copyright. these agreements make it possible to peacefully organize the coexistence of the use of trademarks in one or more countries. The purpose of the agreement is to ensure that the use of trademarks in one or more territories or countries does not lead to an encroachment that would hinder the development of the activities of each of the owners.

Thus, the commercial relationships of each party with their customers are not impacted by the other trademark which will be operated in a different sector and for different purposes.

In the field of trademark law, trademark owners regularly monitor their trademarks and, in this context, identify similar applications for registration that are likely to create a risk of confusion with their sign with regard to the good(s) and/or service(s ) in question.

Indeed, bringing a new trademark to life is often a costly process and can involve marketing teams to promote it on a market.

The trademark is an important asset for a company and should therefore be actively protected in a context of ever increasing competition.

First of all, these coexistence agreements clearly set out the respective rights of the parties, which is the basis on which coexistence will be organized, and generally include a clear commitment by each party not to challenge or infringe the rights of the other, by undertaking in particular not to create confusion with the good(s) and/or (services), and more generally with the activities of the other co-contractor.

In addition, the parties define the conditions of their coexistence and in particular the conditions of use of their trademarks, namely :

  • The scope of operation of each of the signs;
  • The design and its conditions of evolution in the later application;
  • The territory and/or country of exploitation of the signs.

Sometimes, these agreements occur when a holder has rights in one territory and another actor has rights in other territories.

Both wishing to evolve peacefully, they come together to find an acceptable and suitable solution that allows their differentiation in the market and the evolution of their respective developments.

It is important to provide for the mechanisms applicable when agreements operate in several jurisdictions since not all have the same rules or legal regime.

It is therefore necessary to consider different hypotheses in the agreement in order to make it fully applicable without leaving room for any interpretation of the terms of the such as, for example, the transmission of the agreement to the Boards, the signing of letters of consent or, in some cases, the the filing of the trademark by his co-contractor, so that it can then be retroceded to the applicant.

Indeed, it is necessary to structure such agreements efficiently in order to avoid that they create difficulties later on, leading to a possible litigation before a Court (requiring the intervention of a lawyer), which is not always straightforward when the framework of the operation is not yet final, which may be the case when the agreement is made at the time of filing of the second trademark.

The challenge is to be able to permanently delimit the activities of trademark owners, so as to prevent the risk of long-term encroachment.

Thus, it may be difficult to define the future activities of the parties, since in essence they may change.

For example, in a Eurostar case, although the parties did not expressly agree on the rules applicable between them on the filing of a domain name, the Court of Appeal was able to consider that by reserving the domain name <eurostar.eu>Eurostar Diamond Traders had not respected the general spirit of the coexistence agreement (Paris Court of Appeal, July 4, 2008, n°07-07.404).

On the other hand, coexistence agreements can be formed by signing an agreement, but also by exchange of letters, and sometimes even by exchange of official letters, as is regularly judged (see in particular the following decisions: Nîmes Court of Appeal, September 24, 2019, n°18-02.756; Paris Court of Appeal, May 28, 2021, n°19-11.687).

Finally, the coexistence agreement must respect the public interest or it will be null and void.

For example, an agreement providing for the coexistence of two medicines with different properties and bearing the same trademark would not allow the consumer to identify the origin of the goods in question (the trademark’s origin identification function), would be likely to generate a risk of confusion in the mind of the consumer and in that would be contrary to the public interest (WIPO Magazine).

When it comes to coexistence agreements concerning commercial identification signs(trademarks, patents, designs, etc.), it is necessary to be assisted by a lawyer specializing in this field in order to identify and resolve all the issues relating to intellectual property assets.

Update on the recognition of coexistence agreements by Intellectual Property Offices

When an Office refuses to register a trademark on the basis of an identical or similar prior right, it is possible to overcome this refusal by forwarding the coexistence agreement concluded with the owner of the cited prior right.

However, some Boards refuse to recognize the validity of such an agreement. This is the case in Colombia and the Philippines, for example.

Therefore, care should be taken when planning foreign deposits, and prior to doing so, ensure that the National Office recognizes the validity of a coexistence agreement.

If the Offices do not accept such agreements to accept the registration of trademarks, the coexistence agreement must provide for alternatives, such as filing the trademark in the name of the co-contractor and transferring it to the other party.

    Point of jurisprudence

    Apple Corps, a music label (founded by the Beatles) and Apple Computer concluded a coexistence agreement in 1991 fixing the uses of their Apple trademarks: Apple Computer used this sign in particular for software and data processing while Apple Corps used it for musical works and performances.

    However, these companies did not foresee the digital evolution.

    Apple Computers, having then developed the iTunes music software and launched its iPod, was then sued by Apple Corps for breach of the agreement.

    This case has finally come to an end, as a new agreement has again been reached between the parties. (High Court of England and Wales, Apple Corps. Limited v. Apple Computer, Inc. decision of May 8, 2006, [2006] EWHC 996 (Ch))

      Point of jurisprudence

      The judges of the Court of Cassation, in a decision dated July 5, 2017, recalled that the Tribunal de Grande Instance (now the Judicial Court) had exclusive jurisdiction to decide a dispute concerning a trademark coexistence agreement, in accordance with Article L.716-3 of the Intellectual Property Code (Cass.com., July 5, 2017, No. 16-14-764).

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