A trademark coexistence agreement is an agreement made by two parties to use a similar trademark in unrelated markets without inference in each other's brands and goodwill. A coexistence agreement is required if two trademark owners both received rights regarding the similar or identical property. Ideally, potential trademark disputes are often fixed with a coexistence agreement or agreements of this type. Typically the two will be unrelated to each other, with the goods or services being distributed in different geographical areas or have complete separate trade channels. The agreement will set out to clearly define the rights of each party involved, as well as identifying future problems and how to solve them before they arise in the marketplace. It needs to be noted that there are numerous aspects of a coexistence agreement that need to be taken into consideration by a party before determining whether or not a coexistence agreement is a fitting vehicle for ending a trademark dispute. For example, if a junior user of a mark similar or identical to a senior user were to approach the senior user who has much to lose in the industry, they would not want to enter into a coexistence agreement. In contrast, the junior user has much to gain. However, if the two parties utilizing identical or similar trademarks, there are multiple circumstances where each party would benefit from a coexistence agreement.

A parties’ brand, reputation, and legal rights could be heavily affected by a coexistence agreement via trademark rights diluted by any coexistence or consent agreement. This makes infringement from third parties harder to protect against, as well as the value of your mark lessening due to the weakened trademark rights. Not only are trademark rights affected but a brand’s reputation could be affected by low-quality goods offered by another part with a similar or identical trademark. A party must thoroughly consider possible reputation damage before creating a coexistence agreement with any third party offering goods in a related market space, given coexistence agreements allow potentially confusing trademarks to coexist in the market without trademark infringement lawsuits.

The dangers of a coexistence agreement or consent agreement need to be taken into account.  As such, a party looking to enter into a coexistence agreement needs to ensure that it is correctly and skillfully drafted. In the event that the agreement does not provide enough detail, or it’s deemed that customer confusion is unpreventable, a court or the trademark office may reject such a proposed coexistence proposal. There are numerous different aspects of a co-existence agreement that need to be addressed, these include: 

• The owner of the license and assignment rights;
• The owner of the rights to the domain, user name, social media, or variations of the trademark;
• The issue of rights abandonment and breach of agreement restitution;
• The owner of the rights to the product and/or expansion rights; and 
• The owner of international business and trademark rights therein.

For example, in Times Mirror Magazines v. Field & Stream Licenses Co., 294 F.3d 383, 384 (2d Cir. 2002), the Court affirmed the grant of summary judgment to the defendant. The plaintiff, in that case, sued for breach of contract and trademark infringement and sought cancellation of its coexistence agreements with the defendant concerning the mark “FIELD & STREAM.” Ultimately, the district court held that trademark infringement claims, unfair competition, and the fact precluded false designation of origin the parties had executed a coexistence agreement. While the plaintiff argued that the coexistence agreement should be rescinded because the coexistence of trademarks has “cause substantial consumer confusion and thus injure the public interest,” the district court declined to do so but instead enforced the coexistence. 

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