Search
Close this search box.
Search
Close this search box.

,

December 21, 2023

Trademark Co-existence Agreements In Legal Practice

I. INTRODUCTION

In today’s competitive market environment, the importance of ” trademark” and “branding” is increasing day by day for businesses to maintain their presence in the market and to achieve success, and creating brand value for businesses has become an essential element.

Due to the strategic importance of trademarks and brand value, the necessity to protect trademarks leads market actors to take the benefit of the protection provided by intellectual property law and, accordingly, to ensure that their trademarks are used exclusively by their own.

However, the aspiration to exist in a competitive market, to reach different customer segments and to target a wider customer base can sometimes lead brands that are likely to be confused due to their similar characteristics to “co-existence”.

II. COEXISTENCE AND REGULATIONS UNDER TURKISH LAW

The coexistence concept, which can be defined as “an agreement by two or more persons that similar marks can co-exist without any likelihood of confusion; allows the parties to set rules by which the marks can peacefully co-exist. To use the same mark in connection with the same or similar goods or services, usually limited by geographic boundaries,” is a principal contrary to the principle of unicity of the trademark, which is accepted as the basic principle of trademark law, but in some cases regulated by the Industrial Property Law No. 6769 (“IPL”) and case law, it may provide for the protection of both trademarks based on the will of the trademark owners to co-exist in the market.

 

Co-existence of trademarks under Turkish law can be analyzed under two different categories: voluntary co-existence and co-existence arising from legal requirements. The first of these situations, voluntary co-existence, can be possible through the co-existence agreements concluded between the parties or through the consent as an exception to the reasons for absolute rejection in trademark registration, regulated by paragraph 3 of Article 5 of the IPL.

Co-existence arising due to legal requirements is a mandatory co-existence and may arise in cases such as the expiration of the period for filing an invalidity action, assertion of the defense of non-use, and silence, which are regulated under the IPL.

III. COEXISTENCE AGREEMENTS AND CASE EXAMPLES IN PRACTICE

Co-existence agreements may be brought to the fore in the event of a likelihood of confusion between identical or similar trademarks, and are preferred especially for small businesses, as they eliminate the economic burden of litigating disputes between trademarks consisting of marks that are commonly used.

However, the situation is slightly different for large-scale enterprises and brands that have created brand equity and become well-known brands. Co-existence of trademarks increases the likelihood of confusion in the eyes of the consumer and may damage the brand value of the enterprise. As a matter of fact, since it is not always possible for well-known trademarks to take place in the market alone, co-existence agreements prepared by performing a comprehensive risk analysis can be effective in protecting the trademark and trademark value.

For co-existence agreements to serve this protection purpose and protect both parties’ trademarks by agreeing that no rights can be claimed against the use of the relevant trademark, it is recommended that the classes of goods and services to which the trademarks subject to the agreement are directed and the manner of use of the trademark be regulated in detail within the agreement.

The most fundamental example that co-existence agreements containing specific provisions on classes of goods and services serve to protect the trademark value of well-known trademarks is seen in the “Apple Computer vs Apple Corps” decision. In the dispute arising between Apple Computer, which sells computers and technology products, and Apple Corps, a music company, regarding the use of the term “Apple”, the parties resolved the dispute by concluding a co-existence agreement and agreed that Apple Computer would use its trademark in the field of computers and technology and Apple Corps would use its trademark in the field of music. However, with the launch of Apple Computer’s music platform named “iTunes”, Apple Corps sued Apple Computer for breach of contract and the UK High Court ruled that iTunes did not constitute a breach of any class of goods and services since iTunes was a technological development and a computer program.

However, the most well-known example of co-existence agreements with special provisions regarding the use of well-known trademarks is the agreement between “Mario Valentino” and “Valentino Garavani”. According to this agreement, which arose due to the presence of the word “Valentino” in the names of the owners of both trademarks operating in the same classes of goods and services, and both of them wishing to register their own names as trademarks, Mario Valentino may use the phrases “Mario Valentino”, “M.Valentino”, “MV” or “V” on the exterior, provided that the phrase “Mario Valentino” is mentioned, however inside and packaging of the products, the phrases “V” and “Valentino” cannot be used at the same time. Valentino Garavani, on the other hand, is under the obligation to use “Valentino” together with “Garavani” in its products and advertisements.

However, this agreement, which had been in effect for more than 40 years, was interrupted by a lawsuit filed in the Court of Milan by Mario Valentino claiming that Valentino Garavani had used the “V” and “Valentino” without including “Garavani”, and the claims of both parties were rejected by the Supreme Court of Milan. Recently, Valentino Garavani, filed a lawsuit before the Federal Court of California, claiming that the e-commerce platform “FORWARD” infringed Mario Valentino’s trademark rights by marketing Valentino Garavani’s products under the trademark “Valentino” without any reference to “Garavani” In April 2021, the Federal Court of California dismissed the claims on the grounds that Mario Valentino failed to provide constructive information regarding Valentio and that Valentino Garavani had no personal involvement in the advertisements. Although the relevant case has not yet been concluded, it is considered that the court’s decision will set a precedent for the analysis of the courts’ evaluations of co-existence agreements in the recent period.

Within the scope of a co-existence agreement, the parties may also conclude agreements to determine the manner of use of the trademark. In this respect, the first case in which the manner of use of the trademark was determined is the “Persil” case, where both parties signed a co-existence agreement to use the PERSIL trademark and agreed that one party would use the PERSIL trademark in green and the other party would use the PERSIL trademark in red.

Since co-existence agreements are not yet frequently preferred in the Turkish market, there is no specific regulation in the IPL and the relevant legislation, and although the concept of co-existence is a factor that is taken into into consideration when evaluating the confusion of trademarks in the case law, there are no precedent decisions regarding disputes arising from co-existence agreements. However, since non-coexistence agreements are related to intellectual property rights, their conclusion in writing within the scope of Article 148, paragraph 1 of the IPL and their optional registration in the registry may provide convenience in terms of proof of the will of the parties in disputes that may arise in the future.

IV. CONCLUSION

Although the principle of uniqueness in trademarks is essential under Turkish trademark law, it is accepted that it is possible for trademarks to protect their uniqueness by co-existing in certain cases specified in the law and in accordance with the will of the parties.

In practice, the co-existence of trademarks is usually realized through co-existence agreements, and with these agreements, trademarks can co-exist in the market without the risk of confusion. However, in order for the trademarks to co-exist through these agreements, the parties must structure the use of the trademarks in such a way as to prevent the danger of confusion and regulate these issues in the agreement. This is because the coexistence of trademarks in a way that creates a risk of confusion may damage the principle of protecting consumers and may also contravene the competition law regulations due to its effect on the ordinary course of commercial life.

However, if coexistence agreements are regulated in a manner that prevents the risk of confusion and does not violate competition law, they will contribute to the objectives of similar trademarks to exist in the competitive market, to reach different customer segments and to reach a wider customer base, thereby increasing competition and providing better service to consumers.

Best Regards,

Authors

Gökçe Ergün

Gökçe Ergün

Lawyer

Yaren Türe

Yaren Türe

Lawyer