You will certainly have heard about the discussion between the political movement Vooruit and the art centre in Ghent with an identical name over the past few months. The use of an identical trade mark for different activities is not unusual and is even embedded in trade mark law. When registering a trade mark, you must therefore choose which goods and services you want to obtain trade mark registration for. This is the reason why, for example, the name Lotus can be used by three different enterprises for cars, toilet paper and biscuits respectively. An exception to this principle applies for well-known trade marks (such as Apple or Coca-Cola) for which the protection extends further than only the goods and services for which they are registered.
It nevertheless happens quite frequently that identical (or very similar) trade marks continue to coexist even if there is an overlap in the activities for which they are used. This is possible because trade mark holders can contractually agree to let their trade marks coexist peacefully (under certain conditions). The instrument to achieve this is a coexistence agreement.
Each party to a coexistence agreement undertakes not to challenge the validity and use of the trade mark by the other party, as long as certain arrangements are respected. Those arrangements can vary widely, e.g.:
- the demarcation of a territory (e.g. a Benelux trade mark will only be actively used in Belgium and not in the Netherlands);
- use of the trade mark only for certain activities (e.g. used for frozen food products, but never for fresh ones; only on web store X, but not on web store Y); or
- use only in combination with other signs (e.g. only used in combination with a certain logo or name).
In order to avoid later discussion, it is important that the wording of the coexistence agreement is clear and precise. The main benefit of a carefully drafted coexistence agreement is legal certainty. Each party can plan its marketing activities with peace of mind, without having to fear legal action by the other party. Parties are free to decide whether they keep the coexistence agreement confidential.
However, when drafting a coexistence agreement, it is important to take into consideration how the business activities of your enterprise may evolve in the future. It happens all too often that an enterprise regrets the scope of its rights and obligations under a coexistence agreement, for instance when entering a new market. You should also make sure not to infringe competition law when concluding the agreement.