Coexistence Agreements: Commerce, confusion and consent

Keeping the delicate balance between private agreements and the obligations of authorities may need a change in the law, as Gabriela Armas of Uhthoff Gomez Vega & Uhthoff explains.

Consent and coexistence agreements have been a common, while non-binding, practice in Mexico. With the 2018 amendments to the Mexican Industrial Property Law, such agreements are now supposed to be binding as an alternative to overcome an objection upon the existence of a prior application or registration. 

The question remains as to what is the Mexican Trademarks Office’s (IMPI’s) obligation for protecting general consumers from the risk of confusion, even when the involved marks’ owners may consider there is no confusion or even when they allow the dilution for commercial or other reasons.

According to Mexican law, as in many other countries, there is a catalogue of situations in which registration of a trademark is not possible. Those prohibitions for registration should not be subject to interpretation and should be applied only if all requirements and specifications are met. However, the 2018 amendment established an exception regarding confusingly similar trademarks, allowing express written agreements between owners.

In spite of the amendment, there are certain aspects that have to be analysed to determine to what extent private agreements should be mandatory and accepted by the Mexican authorities.

The will of involved parties

An agreement between parties is ruled primarily by the intent of such parties on the terms and conditions they agree to be obliged to for that purpose.

Therefore, if the owner of a prior registration or application wishes to grant a consent or execute a coexistence agreement with an applicant, they may do so and on the terms they determine, even if it entails a limitation of their own rights.

Nonetheless, regarding trademarks, which constitute the exclusive right to exploit a determinate distinctive sign granted by the government, there are some factors that have to be accounted for in this equation, namely, consumers.

"If the owner of a prior registration or application wishes to grant a consent or execute a coexistence agreement with an applicant, they may do so."

While individuals may agree on the terms and conditions thereof, there are some grounds of public concern upon which the IMPI may limit their privileges in view of the greater good, since the risk of confusion could lead to endangering public health or public safety.

The above is evident in some fields such as the pharmaceutical industry, wherein if a consumer purchases the wrong medicine derived from the confusion of the sought trademark the consequences may be dangerous and grave. Other fields may not entail a direct danger for the individual but there may still be a hazard for the general public, for example, the automotive industry, in which the wrong product may cause the vehicle to operate inadequately and cause an accident.

Those specific examples show the need for the IMPI to guarantee to the general public the safety and certainty of the goods and services they obtain, for which there are some complementary laws for protection of the consumer that should be considered in granting or denying a trademark’s registration.

However, there must be a balance between the protection of the general public and the right of individuals to trade and agree on the terms they consider best for their businesses, allowing a healthy market with fair competition, which ultimately will also benefit general consumers.

Agreements between parties should be binding for the IMPI, but there is always the margin of discretion  to analyse the matter and decide to deny registration. Such a decision would have to be properly supported and motivated. 

Solutions for Mexico

There are still some specifics that must be ruled for implementation in Mexico, which may be determined by a further amendment to the law, established within the regulations to the Industrial Property Law or upon jurisdictional criteria when solving particular matters.

Some solutions that have been implemented abroad might be replicated in our country:

1. Specific clauses on agreements whereby parties undertake to take all reasonable actions to avoid confusion in the market; and
2. Specific rules of use in the market in the agreement, eg, specific use of colours or letters, determined layout of the labels, use of different channels of distribution, etc.

Under these circumstances, it is vital that rights owners and their counsel work closely together to determine the best way to protect their marks and negotiate the corresponding agreements.

Gabriela Armas is an associate at Uhthoff Gomez Vega & Uhthoff. She has more than 15 years of experience in IP. She is a member of the Mexican Association for the Protection of Intellectual Property (AMPPI) and member of the International Trademark Association (INTA). She can be contacted at: garmas@uhthoff.com.mx