https://content.next.westlaw.com/practical-law/document/Iafcd0435eb3111e398db8b09b4f043e0/Consent-or-Coexistence-Deciding-Which-Trademark-Agreement-to-Use?viewType=FullText&transitionType=Default&contextData=(sc.Default) A discussion of the differences between trademark consent and coexistence agreements. It includes factors for counsel to consider when choosing the type of agreement to use, including timing, bargaining power and the potential for brand expansion.
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A discussion of the differences between trademark consent and coexistence agreements. It includes factors for counsel to consider when choosing the type of agreement to use, including timing, bargaining power and the potential for brand expansion.
You are helping your client prepare for a new product roll-out and you identify a third-party trademark that might be a problem. Or you are knee-deep in negotiating a deal that involves a trademark that resembles your client's and you want to avoid a problem. Or maybe the USPTO has just issued an office action citing a registered mark against your client's, so you know there is a problem. Do you propose seeking a simple consent agreement, or would a more comprehensive coexistence agreement be a better strategy?
Coexistence and consent agreements can be cost-effective and efficient options for resolving actual or potential trademark conflicts. While both provide a party with consent to use (and often, to register) a given mark, they differ in their terms and complexity. Counsel should take care in deciding which one to use.
A trademark consent agreement is a relatively simple agreement where one party typically grants the other consent to use and register a trademark. A common trigger for a consent agreement is a USPTO office action refusing a trademark application on the basis of a likelihood of confusion with a previously registered mark.
A coexistence agreement is more comprehensive. While it includes consents, this agreement typically goes beyond the specific mark at issue and usually includes use and registration limitations for marks belonging to both parties. A coexistence agreement is also more likely to contain provisions for marks that may not yet be in use.
When deciding which type of agreement makes most sense for the client, counsel should consider:Timing. A simple consent is typically easier to negotiate and finalize than a more complex coexistence agreement. If there is a rush to obtain a trademark registration, a consent may be the better choice.
Budget. Because a consent is a more focused and usually shorter agreement, it likely costs less to put together.
Leverage. If the client is clearly the junior user and can offer little of value to the other party, then a consent agreement may be the only realistic option. However, if the client has some bargaining power, a coexistence agreement that addresses in detail issues important to both parties is likely be in the client's best interest. Examples of leverage that might be used to negotiate a coexistence agreement include the following: