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Trademark Basics: Coexistence Agreements and Consent Agreements
As many know, in San Diego and in California, you and your business are not allowed to infringe upon the trademark rights of another person or business. Infringement will bring expensive litigation and hefty civil penalties. As with many commercial dealings, there are contractual solutions including licensing agreements, coexistence agreements, and consent agreements. These can all resolve infringement disputes without the need to resort to litigation. As we discussed here, franchise agreements are a common example of a licensing arrangement. This article provides some basic information on the other two types of agreements. A good San Diego corporate attorney can provide help and guidance.
San Diego Trademark Law: Trademark Coexistence Agreements
Under a coexistence agreement, the owners of similar trademarks agree to “coexist” using their different marks in distinct and distinguishable market segments. These “market segments” are not merely geographical, but involve types of goods and services, marketing channels, etc. For example, if the similar mark involves a spread-winged flying hawk, the owners might agree that one will limit its use of the mark to beer, wine, and other spirits in southern California sold in stores and the other will only use the mark on clothes, handbags, and beach towels in northern California sold over the internet. The intent of a coexistence agreement is to:
- Avoid litigation
- Avoid disapprovals from the US patent and trademark office (“USPTO”)
- Allow the marks to function as unique identifiers in their respective markets
San Diego Trademark Law: Consent Agreements
Consent agreements are similar, but are made usually as a result of adverse action by the USPTO. In general, an examiner for the USPTO has raised an objection that a proposed trademark is “confusingly similar” to an existing mark and, in reaction, the applicant seeks the consent of the other trademark owner. Like a co-existence agreement, typically the agreement calls for strict segregation of the marks into distinct market segments.
San Diego Trademark Law: Case Example
One of the more famous California cases involved a dispute among California raisin growers. In the 1910s, there was a dispute about the use of the marks “Sun-Kist” and “Sun-Maid.” The former was the senior trademark and its owners alleged the “Sun-Maid” mark was confusingly similar and was thereby infringing. To settle the litigation, the respective parties hammered out a consent agreement whereby “Sun-Maid” was limited to use with raisins and food containing raisins and “Sun-Kist” was allowed to continue for all other uses including canned fruits, vegetables, jams, jellies and other products. As the years progressed, the consent agreement was repeatedly enforced by the courts. See, for example, Sun-maid Raisin Growers of California v. California Packing Corp., 273 F.2d 282 (9th Cir. 1959) and the district court decision here.
San Diego Trademark Law: Careful Drafting Needed
Coexistence and consent agreements are contracts and, as such, should be well-crafted to reflect the intent of the parties. Therefore, an experienced corporate attorney should draft the coexistence and consent agreement with an eye towards these issues:
- How the respective marks are used and limited including geography, trade channels, and product/service scope
- How the marks are displayed
- Term of the agreement
- Use of websites, domain names, and social media
- Rights to variations and derivatives of the respective marks
- International use/registration of the marks
- What constitutes abandonment by one party and rights of the other upon abandonment
- Remedies for breach
- How agreement is terminated and results of termination
Contact San Diego Corporate Law Today
For more information and/or for legal advice related to your company’s trademarks or other intellectual property, call skilled and experienced corporate attorney Michael Leonard, Esq., of San Diego Corporate Law. Mr. Leonard was named “best of the bar” three years running by the San Diego Business Journal. To schedule a consultation, contact Mr. Leonard via email or call at (858) 483-9200.
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