Trademark Co-Existence Agreements in the Perspective of EU Competition Law
Abstract
In this thesis the author has investigated and analysed the treatment of trademark co-existence agreements from a European Union Competition law perspective, i.e. agreements which allow the parties to set rules by which the marks can peacefully co-exist without any likelihood of confusion.
Practitioners deal with uncertainty regarding what is lawful to agree upon in a co-existence agreement without the risk of violating competition regulations. By not focusing on co-existence agreements, we miss a lot of the real commercial world of trademarks and the impact these ‘unknown’ agreements have. The agreements also provide necessary legal certainty for investments, which encourage competition, and it should be considered of public interest that the parties settle their dispute through agreement instead of litigation. Moreover, the advent of the European Union trademark system will probably lead to an increased number of conflicts between trademarks and it is therefore appropriate to hold a wider discussion within the area of co-existence agreements.
Trademark co-existence agreements in general consist of a territorial delimitation and/or a product delimitation clause and a non-challenge clause. Due to this, the investigation showed that co-existence agreements could very easily fall within the application of Article 101 (1) of the Treaty on the Functioning of the European Union (TFEU), in case the agreement affects competition in the EU. Article 101 (1) TFEU prohibits agreements with the object or effect of restricting competition and which affects trade between member states. Moreover, the fact that a co-existence agreement can be seen as a type of licensing agreement may result in Article 5(1)(c) of the Technology Transfer Regulation to be applicable by analogy to non-challenge clauses.
The thesis´ conclusion is that the validity of co-existence agreements depends on how the clauses are written. If the trademark holder is acting within the scope of protection of the trademark right, the restrictive impact of the agreement is usually relatively low since it does not affect the trade of goods. In such case, the agreement merely affects the possibility to promote certain goods by using a specific trademark. On the other hand, if the trademark holder is acting outside the scope of protection of the trademark right, then, the Courts and the Commission could consider the co-existence agreement unlawful.
A limited number of cases relating to co-existence agreements have been subject to the European Courts and the Commission. The view on co-existence agreements has varied, ranging between large scepticism and a more liberal approach. Today, the Courts and Commission recognize the positive effects of such agreements, and currently there is a more positive attitude towards the agreements. Even though the co-existence agreement falls within the scope of Article 101 (1) TFEU, case law suggests that the agreement may be exempted if there is serious likelihood of confusion between the trademarks, and the co-existence agreement is a genuine solution to the conflict.
As co-existence agreements become increasingly important, there is a growing demand for guidance concerning these agreements. It is recommended that further investigations be undertaken and that guidelines are created or implemented in already existing guidelines with respect to co-existence agreements. Of course it is difficult to provide specific answers to every possible scenario, but the existence of appropriate guidelines would assist companies and lawyers in assessing the compatibility of the co-existence agreement with Article 101 TFEU.
Degree
Student essay
Collections
View/ Open
Date
2013-02-12Author
Thomsen, Carin
Series/Report no.
2013:21
Language
eng