Under this agreement, a party with a registered (and generally registered) trademark includes a series of reciprocal obligations with a party wishing to create a new trademark allowing both parties to continue to use their trademarks. In some cases, the party in place may require limited changes to the categories of goods and/or services for which the more recent party would like to use its trademark, therefore avoiding unnecessary duplication and confusion. If there is a risk of confusion, trademark owners can hope for the best and do nothing; they can take legal action by opposing the other person`s trademark application or by authorizing the trademark to be filed, and then seeking an injunction; or they can agree on how to co-exist. A formal agreement on trademark coexistence recognizes the rights of both parties to use the trademarks contained in the agreement for marketing purposes. The agreement may include a breakdown of the regions in which companies using contracting parties can use the trademark, the methods in which the mark can be used or the categories of products and services for which the trademark can be used (in conjunction with the Madrid system for international trademark registration).  Sometimes co-existence agreements have the form of a proactive approval agreement. There one party agrees to register the other party type mark with strict restrictions. A company called «XBoard,» for example, could sell surfboards in Florida and not worry about a small Vermont company that makes a children`s board game called «XBoard.» You may be happy to allow the Vermont company to register the «XBoard» brand as long as they stick to the toys and stay out of the sporting goods market. An approval agreement between the two brands will both avoid potential litigation and assist the registration process.
It is often the case that two merchants use the same or similar brand with respect to the same or similar products in different parts of the world. You cannot be aware of the existence of the other for years, until one of them expands and starts using the trademark or filing a trademark application in the country where the other operates.1 What then happens? On that date, a trademark organization may reject the application on the basis that it conflicts with the other professional`s previous rights. The latter may also object to the application in the context of an opposition procedure or lodge an appeal for annulment after the trademark has been approved.