Can I Use a Trade Mark Coexistence Agreement in Australia?
A trade mark coexistence agreement is an arrangement between two parties to allow shared use of similar trade marks. A trade mark coexistence agreement can be a proactive measure to reduce potential future conflicts about trade mark use. While trade mark coexistence agreements have many advantages, there are also several risks involved with their use.
This article will explain:
- what a trade mark coexistence agreement is;
- how they are used in Australia and in what form; and
- their advantages and disadvantages.
What is a Trade Mark Coexistence Agreement?
A trade mark coexistence agreement arises between two different businesses that have similar or identical trade marks.
The World Intellectual Property Organisation (WIPO) describes a trade mark coexistence agreement as a “situation in which two different enterprises use a similar or identical trade mark to market a product or service without necessarily interfering with each other’s businesses”.
A trade mark coexistence agreement is a proactive way to avoid trade mark disputes in the future, potentially saving businesses from future legal disputes. In Australia, trade mark coexistence agreements may take the form of a letter of consent or exist in a contract.
Letters of Consent
In Australia, a trade mark coexistence agreement usually starts with a letter of consent. A business may send a letter to another business requesting consent for their trade mark application to proceed, despite IP Australia raising a conflict. Whether or not the receiving business grants consent is up to them. If they do, then a coexistence arrangement may start to form.
For example, a business may send a letter of consent if two small businesses:
1. operate in different geographical areas with small, specific customer bases; or
2. have similar names that both can agree are unlikely to confuse consumers; or
3. provide similar or identical goods or services, but to different target markets or consumers, meaning confusion is unlikely.
Sending a letter of consent can be a bad idea if two businesses:
- have identical trade marks for near identical goods and services; and
- operate within similar geographical areas or industries for the same consumer base.
These situations are likely to result in infringement action rather than coexistence.
What Should a Letter of Consent Include?
Letters of consent are documents containing enough information so that an IP Australia examiner can see that both parties involved understand the terms of the agreement.
Some information to consider including is:
- the application number of both the trade marks;
- copies of both trade marks in question; and
- the goods and services class that the conflicting trade mark falls under.
In Australia, a coexistence agreement will be sufficient as a letter of consent, as long as the coexistence agreement does not restrict the use of the trade mark in any way (except for geographical restrictions).
Advantages of a Letter of Consent
Some advantages of a letter of consent include:
- being able to keep your trade mark design (rather than redesigning your IP assets for trade mark protection); and
- preventing future conflict (since you are obtaining consent from another business).
Disadvantages of a Letter of Consent
There are a number of disadvantages of using a letter of consent. These include:
- letters of consent are not binding (in the instance of a trade mark dispute, a letter of consent will be considered persuasive, but not necessarily binding);
- brand confusion (having similar marks to another business may result in customer confusion);
- putting your trade mark application at risk (if you request a letter of consent from a company, you risk alerting them to your trade mark application, which may result in legal action).
Contracts as Coexistence Agreements
A contract is another option for two businesses to outline their coexistence agreement. Contracts typically serve as binding agreements between two or more parties, which might make your contractual coexistence agreement stronger than a letter of consent.
In Australia, a contractual agreement for trade mark coexistence should contain all the details required in a letter of consent to be accepted. However, this also means that the agreement should be careful not to provide any limitations (except for geographical) on trade mark use.
Some clauses to consider adding to your coexistence contract include:
- the parties to the agreement;
- the trademarks which are to co-exist;
- geographical limitations;
- each party’s plans for business expansion;
- dates of the agreement; and
- methods of dispute resolution.
As with letters of consent, the difficulty with coexistence agreements lies in anticipating future business plans. It can be hard to predict the trajectory of a business to ensure the parties to the coexistence agreement do not overlap on each others’ territories.
In Australia, trade mark coexistence agreements usually take the form of a letter of consent. A letter of consent is a helpful way to use a similar trade mark to another business without infringing their trade mark. If you need help with understanding trade marks, contact our experienced trade mark lawyers on 1300 657 423 or fill out the form on this page.
Frequently Asked Questions
A trade mark coexistence agreement is an arrangement between two different businesses using similar or identical trade marks that allow them to use it without infringing on each others’ IP rights.
IP Australia recognises a letter of consent as persuasive when determining whether you can use a similar trade mark as another business. A letter of consent is slightly different to a trade mark coexistence agreement, because it does not allow for any restriction of the trade mark and it cannot be used for identical trade marks.
There are advantages and disadvantages of getting a letter of consent for a trade mark. While a letter of consent can help prevent future trade mark infringement claims, they are also not binding and could cause confusion about your brand identity, putting your brand at risk.