Pros And Cons Of Trademark Coexistence Agreements
In 2001, Shandong Liangzi applied for Liangzi () registration for Class 42 health care and physiotherapy, which was then transferred to Class 44. In 1998, The Beijing Liangzi was approved for the registration of Liangzi () and the device for massage and traditional Chinese medical message in Class 42, which was also later moved into Class 44. Shandong Liangzi and Beijing Liangzi had signed an agreement on the coexistence of trademarks, in which it was stated that neither party could act against the other party with regard to the Liangzi trademark (). However, in 2002, the De 2002 Company filed a termination application against Liangzi () of Shandong Liangzi because Liangzi () of Shandong Liangzi was similar to its previous trademark with respect to similar services. Both TRAB and the Trial Court have decided to cancel the registration of Liangzi () of Shandong Liangzi, regardless of the co-existence agreement. Shandong Liangzi appealed and the Court of Appeal overturned the trial decision and found that Beijing Liangzi violated the co-existence agreement and the principle of honesty and good faith. Senior brand owners are at risk for the following reasons. First, former trademark holders limit their right to retain and allow the legal existence of follower trademarks. Second, agreements on the coexistence of trademarks are irrevocable as soon as they are notarized and legalized. Although some confusion is real in the future and the reputation and function of older brands are compromised, trademark co-existence agreements remain binding on contracting parties, provided they are not revoked by the relevant authorities.
In addition, older trademark holders are not permitted to sue for termination or to pay damages for trademark infringement, provided that the use of disciple marks is appropriate and the trademark co-existence agreement is in accordance with the trademark co-existence agreement. Sooner or later, most trademark holders will have to assess the pros and cons of trademark consent contracts. Since the applicant wishes to obtain the agreement of a third party or vice versa, these agreements are part of the brand landscape. Even if they are short and simple, they can have lasting effects and rights holders are smart to keep an eye on a few critical points. The purpose of this type of agreement is to resolve a potential trademark dispute, avoid future situations in which the two brands overlap unwantedly or hurtfully, detailing the rights of both parties and avoiding confusion in the market. While consent to co-existence may be less costly than a lengthy legal confrontation, there are possible drawbacks that must first be considered: the parties generally negotiate a trademark coexistence agreement with the approval agreement. While the acceptance agreement is primarily limited to the co-existence agreement itself, the co-existence agreement embodies all the specific information relating to the use of their respective trademarks by the parties. That`s where the rubber falls on the road. The approval agreement is often an exposure to the co-existence agreement, so that the co-existence agreement can be confidential and the approval agreement can be submitted to the USPTO. An approval agreement is a kind of co-existence agreement. Trademark filers may include a consent agreement in the minutes of a trademark tracking for registration purposes.
Often, an acceptance agreement is the best option for the trademark registrant to convince the reviewer that the proposed mark does not create any risk of confusion with the trademark invoked against the application.
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