Trademark Coexistence Agreements in India: Key Clauses, Legal Risks and Drafting Considerations

Introduction

Two businesses rarely want the same fight forever. When similar marks surface on the Trade Marks Register, whether through an examination objection, an opposition, or a chance discovery years after both parties have built genuine goodwill, a trademark coexistence agreement can be a commercially sensible way forward. Instead of years of litigation with an uncertain outcome, the parties agree to coexist, usually with restrictions on where, how, or in relation to which goods or services each may use its mark.

Although the Trade Marks Act, 1999 does not expressly use the term “coexistence agreement”, Sections 11(4) and 12 provide a statutory basis for considering consent and honest concurrent use in the registration of similar marks. The Registrar retains discretion in applying these provisions, and an agreement between the parties does not, by itself, guarantee registration or conclusively determine the parties’ rights in every future dispute.

That discretion is not a rubber stamp. A coexistence agreement that appears commercially sound when signed can still fail years later in a dispute the parties never anticipated. Its effectiveness depends on the precision of its drafting, the scope of the rights granted, the circumstances in which the marks are used and the interests of third parties. This article examines the legal framework governing trademark coexistence agreements in India, the essential clauses they should contain, the importance of territorial and trade channel restrictions, and the risks that can arise when the arrangement is tested in court.

When Will the Trade Marks Registry Accept Coexistence?

Trademark applications in India are examined against the absolute grounds for refusal under Section 9 and the relative grounds for refusal under Section 11 of the Trade Marks Act, 1999. Section 11(1) generally prevents registration of a mark that is identical or similar to an earlier trademark for identical or similar goods or services where there is a likelihood of confusion, including a likelihood of association.

Section 11(4) provides an important qualification: the prohibition under Section 11 does not prevent registration where the proprietor of the earlier trademark consents, in which case the Registrar may register the later mark under Section 12. Section 12, in turn, permits the registration of identical or nearly resembling trademarks by different proprietors in cases of honest concurrent use or other special circumstances, subject to conditions and limitations that the Registrar considers appropriate.

These provisions create a statutory route through which a consent letter or coexistence agreement may support a later trademark application. However, consent should not be treated as an automatic entitlement to registration. The Registrar must consider the applicable statutory requirements and the circumstances of the case, including the nature of the marks, the relevant goods or services and the potential for consumer confusion.

Businesses should therefore distinguish between an agreement that regulates the parties’ conduct and a registration decision made by the Trade Marks Registry. The former may help resolve a commercial dispute; it does not necessarily determine the latter.

What Is the Difference Between a Trademark Consent Letter and a Coexistence Agreement?

A consent letter generally records a proprietor’s consent to a specified trademark application or use. A coexistence agreement ordinarily goes further by setting out the conditions under which both parties may continue using their respective marks.

Depending on the circumstances, a coexistence agreement may address the goods and services covered, territories, trade channels, permitted forms of use, future applications, enforcement obligations and dispute resolution. A carefully drafted agreement can therefore provide a more comprehensive framework than a bare statement of consent.

Neither document should be assumed to bind the Trade Marks Registry automatically or to extinguish the rights of third parties. Its legal effect depends on its terms, the parties’ rights and the applicable law.

What Does Section 28(3) Mean for Coexisting Trademarks?

Section 28(3) of the Trade Marks Act, 1999 addresses situations in which two or more persons are registered proprietors of identical or nearly resembling trademarks. In such circumstances, the exclusive rights conferred by registration are not enforceable by one registered proprietor against the other merely by virtue of those registrations, subject to the applicable statutory framework and any relevant conditions or limitations.

This provision does not mean that every coexistence agreement creates unrestricted rights to use a mark. Nor does it eliminate the need to consider other legal rights and remedies. Section 27(2), for example, preserves the common law remedy of passing off, subject to the requirements of that action.

The distinction matters commercially. An agreement between two businesses cannot, merely by being signed, extinguish an independent third party’s rights or prevent a third party from bringing a claim where the law otherwise permits it.

Essential Clauses in a Trademark Coexistence Agreement

A coexistence agreement that will stand up to commercial change and potential litigation needs more than a mutual promise not to sue. It should define the boundaries of permitted use with sufficient precision to reduce ambiguity and prevent future disagreements.

1. Identification of the Marks

The agreement should identify each mark covered, including its registration or application details, relevant logo variants, word elements and device marks. If the parties anticipate changes in branding, the agreement should also explain whether revised versions will fall within the arrangement or require further written consent.

An agreement anchored to a single rendering of a mark may offer little protection once either party rebrands or introduces a materially different logo.

2. Goods, Services and Trademark Classes

The permitted use of each mark should be linked to clearly identified goods and services. Where appropriate, the agreement should specify the relevant Nice Classification classes and the actual commercial activities permitted within them.

Relying only on broad descriptions of each party’s business can create uncertainty, particularly when businesses expand into adjacent product categories or services that were not contemplated when the agreement was signed.

3. Territorial Scope

Trademark rights are territorial, and the agreement should state expressly where each party may use its mark. The relevant territories should be identified by name rather than inferred from the markets in which the parties happened to operate when the agreement was executed.

Where the parties operate internationally, the agreement should specify whether the arrangement applies in India, other named jurisdictions or a defined list of territories. Any later extension should be recorded through a properly executed written amendment or other binding instrument.

4. Trade Channels and Online Use

Trade channel carve-outs deserve the same precision. A distinction between wholesale and retail, business-to-business and direct-to-consumer sales, or particular categories of outlets may appear workable at the outset. However, e-commerce and online marketplaces can blur distinctions that were easier to maintain in physical retail environments.

The agreement should address online sales, marketplace listings, websites, social media, digital advertising and other relevant distribution channels. It should also clarify how each party will distinguish its products where the parties’ offerings overlap in online search results or are displayed alongside one another.

5. Manner of Use and Brand Differentiation

The parties may agree to use their marks in specified forms or alongside additional identifying elements. For example, the agreement may require a house mark or word element to accompany a device mark, or prescribe particular packaging, labelling or presentation requirements.

Such provisions should be drafted as clear and enforceable obligations rather than general statements of intent. The agreement should also specify the circumstances in which a proposed change in the manner of use requires prior written approval.

6. Quality Control and Protection of Reputation

Where either party’s use could affect the other’s reputation, the agreement should address applicable quality standards and the consequences of non-compliance. Depending on the commercial arrangement, this may include product presentation, labelling, advertising or other agreed brand-use requirements.

Quality-related provisions should be proportionate to the arrangement and sufficiently specific to permit compliance to be assessed objectively.

7. Non-Challenge and Enforcement Provisions

The agreement should clarify whether either party may challenge the other’s trademark applications or registrations, and identify the scope of any agreed non-challenge obligation. It should also address how the parties will respond to third-party infringement, conflicting applications or conduct that falls outside the agreed coexistence arrangement.

Any restriction on legal proceedings or challenges should be drafted carefully, with regard to its scope, enforceability and the applicable law. A private agreement cannot automatically remove the rights of non-parties.

8. Future Applications, Expansion and Amendments

The parties should consider whether either may apply for additional marks, expand into new goods or services, or enter new territories without first notifying the other. A notice and consultation mechanism can help identify conflicts before they become formal oppositions or infringement disputes.

The agreement should also establish a process for revisiting the arrangement if either business expands or market conditions materially change. Any amendment should be documented clearly, rather than left to informal correspondence or an assumption that the original agreement has evolved with the parties’ businesses.

9. Assignment, Successors and Corporate Restructuring

Trademark portfolios and businesses routinely change hands. The agreement should therefore address assignment, licensing, mergers, acquisitions and other changes in ownership or corporate structure.

It should specify whether the agreement may be assigned, whether consent is required and how successors or permitted transferees will be made subject to the relevant obligations. The parties should not assume that every provision will automatically bind every successor in every circumstance without appropriate drafting and legal analysis.

10. Governing Law and Dispute Resolution

Where the parties operate in different jurisdictions, the agreement should specify the governing law and an appropriate dispute resolution mechanism. It should also address jurisdiction, interim relief where relevant, notice procedures and the process for resolving disputes over the interpretation or implementation of the agreed restrictions.

These provisions are particularly important where the parties’ trademarks are registered in multiple countries and a disagreement could affect several markets simultaneously.

Why Do Trademark Coexistence Agreements Fail in Later Disputes?

Three recurring risks explain why carefully negotiated coexistence agreements can end up being tested in court: the rights of third parties, ambiguity over territorial scope, and commercial developments that the agreement never anticipated.

1. A Coexistence Agreement Does Not Eliminate Third-Party Rights

A coexistence agreement regulates the relationship between its parties. It does not, merely by being executed, bind other businesses or extinguish independent rights that may exist under trademark law or the common law.

Section 28(3) addresses the position of multiple registered proprietors of identical or nearly resembling marks, while Section 27(2) preserves passing off remedies. Whether a third party can successfully bring a claim will depend on the facts and the rights it can establish, including any relevant prior use and goodwill.

Businesses should therefore undertake appropriate trademark searches and assess potential third-party rights before entering into an agreement. A settlement that resolves a dispute between two businesses may not provide a complete solution if another party has an independent basis to challenge the use of either mark.

2. Ambiguous Territorial Scope Can Undermine the Arrangement

The importance of expressly defining territory is illustrated by Lacoste v. Crocodile International Pte. Ltd. & Anr., a dispute concerning the use of competing crocodile device marks and the scope of historical coexistence arrangements.

The Delhi High Court’s Single Judge decision dated 14 August 2024 considered whether an agreement executed in 1983 and a subsequent communication dated 22 August 1985 permitted the use of the disputed standalone device mark in India. The parties disagreed over whether the original arrangement had been extended to India and whether the later communication established the necessary consent.

In its appellate judgment dated 9 March 2026, the Division Bench considered the agreements and related correspondence. It concluded that the 1983 agreement was limited to the territories expressly identified in it and did not extend to India. The 1985 letter and the other evidence did not establish permission to use the disputed standalone device mark in India.

The dispute demonstrates why territorial scope should be stated expressly and why a subsequent extension should be documented with the same rigour as the original agreement. A party should not assume that an arrangement covering certain Asian markets necessarily extends to India or another jurisdiction merely because the businesses have an established commercial relationship.

3. Business Expansion Can Outpace the Agreement

A coexistence agreement may work well for years and then become difficult to apply as the businesses evolve. Products move online, brands launch adjacent product lines, distribution models change and companies are acquired.

An agreement drafted around a narrow set of physical sales channels may not address marketplace listings or direct-to-consumer sales. Similarly, an agreement covering only the marks in use at signing may not clearly govern a new logo or a materially different brand presentation.

These risks can be reduced by providing for periodic review, defining the treatment of new marks and business lines, and requiring written agreement where a proposed change would materially affect the original arrangement.

Practical Checklist Before Signing a Trademark Coexistence Agreement

Before executing a coexistence agreement, businesses should consider whether it:

• Clearly identifies the marks, applications and registrations covered.
• Defines the permitted goods, services and commercial activities.
• Specifies the territories in which each party may use its mark.
• Addresses online sales, marketplaces, digital advertising and relevant trade channels.
• Sets out enforceable rules for the manner of use and brand differentiation.
• Clarifies consent for future applications and the scope of any non-challenge obligations.
• Addresses third-party infringement and the parties’ respective enforcement responsibilities.
• Provides for assignment, successors, acquisitions and corporate restructuring.
• Establishes a written amendment process and a mechanism to revisit the arrangement.
• Specifies governing law, jurisdiction and dispute resolution procedures.

Conclusion

Trademark coexistence agreements remain a legitimate and often commercially efficient means of resolving conflicts between similar marks in India. Sections 11(4) and 12 of the Trade Marks Act, 1999 provide a framework through which consent and honest concurrent use may be considered in the registration process. However, the protection an agreement offers is only as effective as its drafting, and it does not automatically extend to parties who were never at the table.

Agreements that identify specific marks, define goods and services, fix territorial and trade channel boundaries, address online use and provide for successors and future expansion are better equipped to withstand commercial change. The disputes that arise from ambiguity over territorial scope or an incomplete understanding of third-party rights demonstrate why these issues should be addressed at the drafting stage rather than after a conflict has escalated.

For businesses seeking to resolve trademark conflicts without prolonged litigation, a carefully structured coexistence agreement can provide commercial certainty while preserving the parties’ ability to operate within clearly defined boundaries.

Frequently Asked Questions

Last Updated on 13 October, 2026