What Are Trademark Agreements and How Do They Work?
A breakdown of consent, concurrent use, and coexistence agreements
on July 29, 2020
Updated on August 9, 2022
As described by the United States Patent and Trademark Office (USPTO), a trademark is a word, phrase, design, symbol, or other unique sign that helps to distinguish the source of goods in the mind of a consumer. Registered trademarks are a valuable form of intellectual property. Many companies are focused on protecting their trademark rights.
In some cases, two or more entities may want to use a similar mark, but may not fundamentally have a conflict with each other. Through a trademark license agreement, parties can often avoid the hassle and expense of a legal dispute. Below, you will find a breakdown of trademark agreements and how they work in Maryland.
What is a Trademark Agreement?
If you have travelled across the country, you have probably noticed that many pizza restaurants have similar names and similar branding. This is common across industries, from car dealerships to wholesalers. As these companies are not necessarily competing with each other, they are able to use similar branding.
If “both companies agree to the rights to use the same marks, those agreements should be territorial so as not to result in consumer confusion, as to source in a common market, which could destroy trademark rights in that the mark does not indicate a single source of goods,” says James B. Astrachan, an intellectual property attorney in Baltimore.
In some cases, companies that are, or have the potential to be, in the same market may also want to use similar branding. A trademark agreement allows two or more parties to use the same or similar mark subject to conditions. Among other things, these types of agreement may address:
- The duration of trademark use
- What products or services can be sold under the branding
- Any geographic restrictions on use
- The compensation, or lack thereof, for trademark use.
There is no one correct way to draft a trademark agreement. Every situation is different, and a contract should deal with the specific situation. Indeed, trademark agreements vary widely in their scope and purpose. To be truly effective for both parties, a trademark agreement must be customized to meet their unique needs.
Astrachan gives an example involving milk brands. “A west coast dairy and an east coast dairy use the same brand, but their markets don’t come close to overlapping due to the distance,” he says.
Know the Terms: Trademark Agreements
Most often, trademark agreements involve federally registered marks. That being said, companies may agree to license an non-exclusive registered trademark. Here are three common terms you are likely to find in a trademark agreement:
- Consent: Through a consent agreement, a company or organization can allow the registration or use of the same or a similar licensed trademark. With a consent agreement, two companies can avoid conflict or dispute by establishing parameters for use of the mark in their business plans.
- Concurrent Use: Generally, concurrent use trademark registration involves two (or more) parties agreeing to same or similar use of the trademarks in different geographical areas. Federal regulations allow parties to voluntarily limit their own geographical scope.
- Coexistence Agreement: It is not uncommon for companies to enter coexistence agreements. As explained by the World Intellectual Property Organization (WIPO), a trademark coexistence agreement allows parties to use the same or similar marks on the grounds that they are not direct competitors and can reasonably operate without confusing consumers.
Before finalizing a trademark agreement, companies should carefully consider their options. Make sure any intellectual property agreement you sign provides adequate legal protection. If you have questions or concerns about trademark agreements, contact a law firm, an experienced Maryland trademark law attorney can offer legal advice.