Trademark Consent Agreement and Co-Existence Agreement

By Wei Wei Jeang (wjeang[at]fultonjeang.com)

Sometimes it feels like all the good tradmarks are already taken. It is not uncommon to go through rounds of vetting and due diligence to check and verify the availability of proposed trademark candidates. There are times when a trademark consent agreement or a co-existence agreement may be a solution.

These types of agreements are legal contracts between two businesses to allow both to use similar or identical trademarks without conflict. These agreements spell out clearly the specific conditions that each party will operate with respect to the trademark to minimize the risk of confusion among their target consumers.

There are some differences between a consent agreement and a co-existence agreement. A consent agreement is typically used when one party consents to the registration of a similar or identical trademark by another party, acknowledging that there is no likelihood of confusion between the two marks. A co-existence agreement is broader and more comprehensive. It is used when two parties agree to co-exist with similar or identical trademarks, typically by defining how and where each party can use the trademark.

Both types of agreements are beneficial for businesses looking to protect their brand while accommodating other legitimate uses of similar trademarks. However, careful drafting is essential to ensure that the terms protect each party's interests without leading to future conflicts. It's advisable to consult legal experts to ensure the agreement complies with trademark law and offers sufficient protection.

Some existing known real-word examples of trademark co-existence relationships are:

1. Apple Corps vs. Apple Inc.

Apple Corps, the company founded by The Beatles, and Apple Inc., the technology giant, entered into a long-standing legal dispute over the use of the "Apple" trademark. By entering into an agreement, both companies may use the "Apple" name in their respective industries—Apple Corps in the music business and Apple Inc. in the computer industry. The agreement prohibited Apple Inc. from entering the music business. However, this agreement was later renegotiated when Apple Inc. launched iTunes and expanded into music.

2. Lego vs. Legoland

The Danish toy company Lego and the theme park operator Legoland were both using the "Lego" name, but in different business areas—Lego for toys and Legoland for theme parks. The parties entered into a co-existence agreement to allow Legoland to use the Lego name for its theme parks while Lego retained the rights for toys.

3. Gucci vs. Guess

Gucci and Guess had a long-running legal battle over trademark infringement, particularly involving similar designs involving their logos. In 2018, the two fashion giants reached a settlement that included a co-existence agreement, allowing each company to continue using their respective trademarks with clear distinctions in specific design elements. This resolved disputes across various countries and provided guidelines on how each brand could use similar motifs.

4. Burlington Coat Factory and Burlington Industries

To prevent confusion and legal disputes, the two companies agreed on specific terms that allow both companies to use the "Burlington" name within their respective industries of retail discount clothing and fabric and textile manufacturing. Included in the agreement is the requirement that Burlington Coat Factory include a disclaimer statement in its marketing materials that it is not associated with Burlington Industries.

5. Burger King (U.S.) vs. Burger King (Australia)

Burger King, a global fast-food chain, had to operate under the name "Hungry Jack's" in Australia because a local restaurant already held the trademark for "Burger King." A co-existence agreement allowed the original Burger King in Australia to continue operating under that name while the global chain rebranded itself to Hungry Jack’s within the Australian market. Despite their similar business, both names continue to exist separately due to this agreement.

Trademark consent and co-existence agreements are tools that provide practical solutions for businesses to clearly set marketplace boundaries with their trademarks while avoiding costly legal battles. Consult Wei Wei Jeang (wjenag[at]fultonjeang.com) to find out more.