As the commercial scene in India expands rapidly, trademarks are becoming increasingly common among their counterparts. This is due to the fact that many companies vie with one another for that limited space in a growing economy. With over 2.5 million active trademarks at the Indian Trademark Registry and new applications piling in at thousands every month, brand owners very often find themselves in situations where similar marks co-exist in the market. Conventional litigation to restrain that coexistence, whether by immediate opposition or infringement actions, isn't always the answer, according to seasoned Indian trademark practitioners. Enter the trademark coexistence agreement: a sophisticated legal document that allows for smooth concurrent use of potentially conflicting marks in Indian law.
Understanding Coexistence Agreements in the Indian Legal Framework
A trademark coexistence agreement is an agreement between two or more parties that allows the conflicting marks to coexist in the commercial marketplace, subject to a number of conditions. Under Indian trademark jurisprudence, these agreements acknowledge that not all similar marks would mislead consumers by incorporating different contexts, territories, or industry sectors.
The agreements have been bolstered by Section 12 of the Trade Marks Act 1999, which specifically mentions that it will be possible for honest concurrent use. This gives the Registrar discretion to allow registration of identical or similar trademarks by different proprietors on the ground of honest concurrent use or any other special circumstances. The Delhi High Court in S. Syed Mohideen v. P. Sulochana Bai (2016)1 held that "honest concurrent use of trademarks is legally allowed" subject to justifying circumstances.
When Coexistence Makes Business Sense in the Indian Context
Several scenarios particularly warrant consideration of coexistence agreements under Indian trademark practice:
Regional Business Operations
India is a country where geography and regional markets are vast, thus allowing businesses to run in shifting territories with little overlapping areas. For example, "Krishna Textiles" never interacts with the Tamil Nadu markets; therefore, it could have peaceful coexistence with "Krishna Fabrics," causing no confusion amongst consumers in Gujarat. A coexistence agreement can set forth territorial limitations that would prevent any conflict in the future, as when the businesses expand.
Industry Differentiation
The trademark "Lakshmi" refers simultaneously to banking services, manufacturing machinery, and consumer products across several parts of India, with no real confusion for the public. This peaceful coexistence happens in a very natural way, whereby consumers experience the marks in contradicting commercial contexts. By imposing legal sanction on the mutual understanding, the coexistence agreement serves to reduce the number of disputable matters.
Historical Usage Patterns
Typically, if the two parties had been using their respective similar marks for some reasonably long time and there was no evidence of actual confusion, the same would be strongly recognized in India.
Ancestral Business Divisions
An interesting case in the Indian situation deals with the family business division. Family-run enterprises often continue business with similar names across actually divided undertakings after partition and/or separation, based either on ancestral or common trademark. A coexistence agreement would legally sanction the arrangement and would establish lines of divergence to minimize customer confusion.
Essential Components of Coexistence Agreements Under Indian Law
Creating effective coexistence agreements under Indian law requires careful attention to both universal principles and India-specific considerations:
Precise Scope Definition
The agreement must precisely define the parameters for allowed use:
- An exact description of the marks (word elements, logo, stylized).
- Classes of goods and services as accepted by the Indian classification system.
- Territorial limitations of viewing these states and union territories in India.
- Restrictions on channels of marketing (e.g., online, retail, wholesale).
- House mark requirement.
Prohibited Activities
It regards the boundary lines set forth under specific prohibitions as equally important:
- Prohibited product categories.
- Abusive methods of marketing that may create a risk of confusion.
- Restriction on area expansion.
- Domain name and social media exclusions.
Statutory Compliance Provisions
Certain statutory obligations should be defined within an Indian agreement:
- Intervention concerning trademark registration.
- Representation before the Register about user consent.
- Affidavit for users.
- Recording of arrangements with registered users, if any exist.
Infringement Response Coordination
About third-party infringement, coordination generally proves
rewarding:
- Notice obligations if any third-party infringement is detected.
- Cooperation protocols for the joint enforcement action.
- Sharing of the costs in joint enforcement actions.
- Requirements for keeping the evidence safe.
Dispute Resolution Mechanisms
Indian coexistence agreements, often on the subject of dispute resolution, specify:
- Pre-litigation mediation is obligatory.
- Arbitration under the Arbitration and Conciliation Act, 1996.
- Clause on jurisdiction describing the appropriate High Court.
- Choice of law clause (often Indian law).
Legal Weight and Enforcement Considerations
As with most well-reasoned coexistence agreements, courts and the Trademark Registry in India will take cognizance of that agreement, depending on the situation. In Himalaya Drug Company v. SBL Ltd. (2013)2, the Intellectual Property Appellate Board accorded great weight to a coexistence agreement while evaluating the likelihood of confusion, underlining that often the trade participants themselves understood more than what actually happening in the market.
It must also be noted that there are instances in which, at the same time, coexistence agreements receive maximum deference:
- Have in place specific device mechanisms of confusion
- Cover non-identical but similar marks
- Include sophisticated b2b products or services
- Provide clear overall or commercial distinctions
On the contrary, agreements face greater scrutiny when:
- Marks are identical or nearly identical
- Products target ordinary consumers
- Industries have safety implications (pharmaceuticals)
- Territorial separation is the primary distinction.
Strategic Considerations Under Indian Business Conditions
Several factors specific to the Indian business environment support consideration of coexistence rather than litigation:
Litigation Timeline Realities
Although the situation has been improving, trademark litigation in India continues to be characterized by the frequent, extensive duration of 3-7 years to reach a final resolution. For that matter, even preliminary injunction proceedings continue for months or years. In PepsiCo Inc. v. Hindustan Coca Cola Ltd.3 the Delhi High Court in 2003 acknowledged this and held, "the wheels of justice move slowly." The timeline reality, therefore, makes negotiated solutions particularly attractive.
Registration Backlog Implications
Though improving, the Indian Trademark Registry is still churning through substantial examination backlogs. Opposition proceedings are faced with 3-5 years of uncertainty. Coexistence agreements help to promptly register the marks by eliminating oppositions and creating immediate certainty between the parties while the proceedings at the Trademark Registry are pending.
Cost-Benefit Assessment
The costs of trademark litigation in India, while far from Western jurisdictions, still represent an important investment for most businesses. Full contested proceedings right through to the final judgment usually range from a minimum of ₹15-30 lakhs (approximately $20,000-40,000). These funds could very well be put to advance the business, especially with small and medium enterprises with limited budgets for legal expenses.
Relationship Preservation in Connected Markets
Interconnected commercial relations are a strong feature of India's business environment, especially among connected industry sectors and regional markets. Preserving potential business partnerships through jointly negotiated solutions would better serve the long-term interests of both parties over litigation, which is adversarial in character.
Potential Pitfalls Under Indian Law
Despite their advantages, coexistence agreements under Indian law carry certain risks:
Non-Registration Implications
Under Legislative Section 31 of the Trade Marks Act, registration serves as prima facie evidence of validity. Agreements lacking registrations would find it hard to enforce against a third party. The High Court of Calcutta has adopted the view in Britannia Industries Ltd. v. ITC Ltd.4, which favored registration over purely contractual arrangements.
Statutory Cancellation Vulnerability
Section 57 provides room for any "aggrieved person" to petition the cancellation of registered marks on various grounds, e.g., likelihood of causing confusion. Third parties sometimes challenge marks protected under coexistence agreements on the basis that the private arrangement does not trump public interest considerations over preventing confusion.
Evolving Business Models
India's economic transformation sprinkles particularly unique risks, whereby markets that were once well-tailored would one day converge and get worked together. For instance, e-commerce platforms have taken so much of the market that it is no longer possible to base coexistence on territories or channels.
Case Studies from Indian Practice
Raymond Ltd. v. Raymond Pharmaceuticals
This matter refers to the de facto trademark of Raymond used as a name by a textile company and to another pharmaceutical company. Both parties, however, decided not to engage in any lengthy litigation; instead, they executed a coexistence agreement which allows the pharmaceutical company to use Raymond exclusively in medicines but recognizes the superior rights of the textile company for clothing and related goods. It also prescribes the use of particular designs in logos for better visual differentiation.
ITC Ltd. and Imperial Tobacco Company
Both ITC Limited and Imperial Tobacco Company had formally documented coexistence arrangements entailing the rights to use similar marks in different sectors after the companies separated their businesses, thus allowing both companies to continue using the brands. The coexistence arrangement has successfully barred disputes for a number of decades, notwithstanding the massive size and presence of both companies in the market.
Tata Group Family Arrangements
Continuing use of the "Tata" name in different business areas is now legitimately legalized through well-framed coexistence arrangements, after the split between the Tata Group and Tata Oil Mills (which has now gone on to Hindustan Unilever). The arrangements contain specific criteria for visual presentation as well as limitations on product categories that serve to safeguard against consumer confusion, notwithstanding the "fame" of the marks.
Best Practices for Indian Coexistence Agreements
Secure Registration Support
Things for which coexistence agreements must not have been:
- Include letters of consent for pending applications.
- Withdrawal of any existing oppositions;
- Specify cooperation in securing registrations;
- Include stipulation of user registration arrangement under Sections 48-49.
This kind would cause the agreement's potency to significantly increase against third parties-with the foundation of its registration.
Document Confusion Mitigation Measures
Clearly, the agreements should document the confusion prevention mechanisms:
- The requirement of certain visual distinctions (colors, fonts, stylization)
- The requirement of using house marks along with the disputed marks
- Packaging differentiation specifications
- Labelling regulations
These concrete provisions will, on the one hand, fortify the legal enforceability and, on the other hand, gain acceptance in the Registry.
Address Online Presence Specifically
Contemporary Indian agreements have to cover digital issues:
- Domain name ownership and use
- Social media account naming requirements
- Online advertising keyword restrictions
- E-commerce platform listing stipulations
These clauses put an end to conflicts in the digital space as increasingly more people spend their time, money, and lives online.
Incorporate Periodic Review Mechanisms
The flexible understanding because of changing markets in India must include:
- Scheduled review every 24 to 36 months
- Notice of changes in the market
- Consultative process for entering new categories
- Amendment procedures keeping legal certainty
Such mechanisms keep the agreement up to date, notwithstanding evolution in the market.
Conclusion: Coexistence as a Strategic Asset in Indian Trademark Practice
In Indian law, trademark coexistence agreements could be said to be relatively intricate tools for managing brand portfolios. If cast strategically, they can convert potential landmines into opportunities for value by allowing the protection of important trademarks while avoiding litigation costs and uncertainties.
The optimum trademark strategy in India concedes that the exclusivity of a brand is a matter of degree- it is never absolute. While there are some marks against which, in India, enforcement, or, indeed, almost constant enforcement against any slightly similar use has become the order of the day, other marks would benefit from alternate coexistences considered from a strategic standpoint. What is crucial here is to choose the strategy: know when to oppose, when to negotiate, and how to design arrangements that serve not only the business interests but also consumer clarity.
With the Indian economy galloping ahead and the charge of the trademark registry getting active, coexistence agreements are fast assuming more and more importance. More and more pro-competition companies would be using these tools as part of their overall strategy for brand protection, knowing that sometimes the best legal position arises not from winning the court case but from never having to go there.
References-
https://www.anandlaw.com/a-brief-overview-trademark-coexistence-agreements
https://www.wipo.int/en/web/wipo-magazine/articles/ip-and-business-trademark-coexistence-35523
https://script-ed.org/wp-content/uploads/2016/07/5-1-Elsmore.pdf
https://www.drishtilaw.com/trademark-registration-when-are-consent-coexistence-agreements-required/
https://harperjames.co.uk/article/trade-mark-co-existence-agreements/
https://www.sonisvision.in/blogs/co-existence-of-similar-trademarks
Footnotes
1. MANU/SC/0576/2015
2. MANU/DE/5479/2012
3. MANU/DE/1269/2001
4. MANU/DE/0626/2017
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
