Coexistance Agreement

A coexistence agreement recognizes the rights of two companies to use similar trademarks.

Sometimes during business, two companies may choose similar trademarks, yet their respective businesses are targeted for completely different markets and uses. Rather than a costly litigation over a disputed trademark, many companies may sign a coexistence agreement. The parties of this contract mutually agree to not bring suit regarding disputed trademark issues. However, each agreement will have specific terms tailored to each case.

Definition of Trademark

A trademark is used in the marketing of a product or service and distinguishes the product or service of one person from those of another, according to "Intellectual Property: The Law of Trademarks, Copyrights, Patents, and Trade Secrets" by Deborah E. Bouchox. The trademark is usually a word, symbol, name, or device. Trademarks can also be slogans, designs or sounds. Companies use trademarks to represent the quality and consistency of the company's products or services.

However, marks may not be protectable if they are too general in nature. Product names which simply describe a product would be considered generic. For example, a product with the trademark "Tissue" would be generic. However, "Kleenex" would be protectable.

Terms of Coexistence Agreements

The terms of a coexistence agreement will vary according to each individual case. The terms should define in what specific ways each business is allowed to use the trademark. Coexistence may be based on a division of territories or on each business’s respective field of use or service, according to the World Intellectual Property Organization (WIPO). Terms should also take into consideration the future plans and aspirations of each business in order to avoid future conflicts.

Problems with Coexistence Agreements

Two companies with a coexistence agreement which had previously been working may suddenly find themselves in a conflict. This may happen when the businesses, which were once operating as separate and distinct products and services, begin to overlap. This could occur despite good faith efforts to respect the coexistence agreement. This type of conflict is represented by the legal case between Apple Computers and Apple Corps.

Apple vs. Apple

A coexistence agreement existed between Apple Computers and Apple Corps. Both companies had registered the word “apple” as a trademark with similar depictions of an apple. The two companies had different products. Apple Computers manufactured computers and developed software, while Apple Corps. sold music. The companies entered into a trademark coexistence agreement to give the two companies exclusive rights in their perspective uses and markets.

However the two companies eventually ended up in litigation when Apple Computers introduced its iTunes software and its iTunes music store, which is an electronic music store. The iTunes software allowed users to download music from the music store. Apple Corp. claimed that Apple Computers was breaching the coexistence agreement because iTunes was directly competing with Apple Corp. in the music business. However, the court found there to be no breach, because the Apple Computers logo was used in conjunction with the software and not the music provided by the service.

Prevention of Conflict

The problems between Apple Computers and Apple Corp. could have been avoided with a thorough search for existing trademarks. Since Apple Corp. was already in existence before the computer company, a different name could have been chosen, which would have avoided a costly litigation. When choosing a trademark, it is recommended that assistance is obtained from a trademark specialist, such as an intellectual property attorney.

References

• World Intellectual Property Organization: IP and Business: Trademark Coexistence
• World Intellectual Property Organization: Independent Existence or Coexistence of Identical or Similar Trademarks
• "Intellectual Property: The Law of Trademarks, Copyrights, Patents, and Trade Secrets;" Deborah E. Bouchox; 2005

Resources

• Read this Article in Spanish