Introduction
Since last month’s post covering international aspects of trademark infringement litigation, we’ve gotten some questions about what resolution options are available short of full-blown litigation. Obviously, trademark infringement is a significant concern for businesses and individuals seeking to protect their brands. But, sometimes, settlement or other mutual agreements to resolve these problems can make more sense than filing an expensive lawsuit. Below, here are some settlement variations we typically see for these types of matters.
Resolution Options
1. A simple, negotiated resolution. While this is a really broad category, a negotiated resolution involves direct discussions between the trademark owner and the alleged infringer, with the goal to be reach a global settlement. Sometimes it will involve some amount of settlement payment, sometimes not. But in general, engaging in that kind of negotiation can be cost-effective and may allow for the preservation of a somewhat amicable relationship, especially if you’re in the same space and there is a chance for future business collaboration. Obviously, any resolution should be fully vetted and documented.
2. A licensing agreement. In certain cases, the trademark owner may be willing to grant a license to the alleged infringer, allowing limited or specific use of the trademark in exchange for compensation. This settlement option enables the infringer to continue using the mark in a limited capacity, but legally. This way, both sides may generate income, the trademark owner has taken are of its intellectual property rights, and the licensee can continue to use the trademark with authorization.
3. A coexistence agreement. Somewhat similar to a licensing agreement, a trademark coexistence agreement is typically a more comprehensive arrangement that adds specialized limitations on the locations, industries, and/or marketing methods in which both sides can use their marks. The general consensus that underlies a coexistence agreement is that both brands can peacefully co-exist, without creating a likelihood of confusion for the consumer. Coexistence agreements make sense when there are two businesses who are going to stick to their niche of the market.
Conclusion
Trademark infringement lawsuits can be resolved through various settlement options like the above, so a long and expensive battle can be avoided. The above allow for trademark owners and alleged infringers to find mutually beneficial resolutions. These settlement options offer cost-effectiveness, control over outcomes, preservation of relationships, and timely resolution of disputes. Of course, it is essential for parties involved to seek legal guidance to ensure the terms and implications of any settlement agreement reached makes sense.
