The importance of negotiating a Trademark Coexistence Agreement in a timely manner: strategy, opportunity, and the risks of delay

By Jose Alberto Mérida

Industrial Property Specialist

In the field of Industrial Property, one of the most valuable tools for resolving conflicts between similar trademarks (without resorting to lengthy and costly litigation) is the trademark coexistence agreement. When negotiated strategically and at the appropriate moment, this mechanism allows two trademarks to coexist peacefully in the market and in the registry, defining their use, commercial scope, and the obligations of each party.

However, although coexistence is a highly effective tool, its usefulness depends largely on when negotiations begin. In trademark matters, timing is a decisive legal and strategic factor. Many times, the mistake is not rejecting a negotiation but beginning it too late, when essential advantages have already been lost.

The strategic window: why timing is decisive

Many trademark owners believe a negotiation may begin “whenever there is time” or “once they have thought about it carefully.” In reality, IMPI’s procedural timelines and certain key rules (especially those relating to real and effective use) make late negotiation highly risky.

From the perspective of a trademark specialist, the best moment to negotiate is usually:

 

• • when a real risk is identified,

• • when there is strategic pressure on the other party,

• • when defensive measures have not yet been taken,

• • and especially when the attorney recommends it.

Postponing negotiation allows the other party to take actions that render the original strategy unfeasible or extremely costly.

What happens when negotiation starts too late?

 

a) Filing of “defensive” trademarks by the counterparty

The counterparty may register:

 

• • phonetic variants,

• • mixed trademarks,

• • derivative trademarks,

• • additional logos,

• • line extensions.

• • the same application once again

By doing so, they strengthen their trademark block and create new legal barriers for any trademark the original owner intends to register.

 

b) Regularization of use to avoid attacks

If the counterparty  identifies that they might be attacked on the basis of non-use, they have time to:

 

• • initiate or increase commercial exploitation;

• • prepare supporting evidence;

• • strengthen their position against a potential non-use cancellation action;

• • and even file new trademark applications that “reset” the legal term required to bring a non-use cancellation action, taking the clock back to zero and making a cancellation action impossible or ineffective in the short term.

This means that a trademark owner who had a strong position to file a non-use cancellation loses that opportunity entirely by waiting too long.

 

c) Anticipated filing of actions

If the counterparty perceives that a negotiation is being sought in order to register new trademarks, they may act in advance and:

 

• • file preventive actions,

• • monitor new filings more aggressively,

• • proactively block the registration of any similar sign.

 

d) Loss of willingness to negotiate

When the counterparty  has already strengthened its position through additional registrations, provable use, or successful oppositions:

 

• • their incentive to negotiate decreases,

• • their conditions become stricter,

• • or they simply refuse any agreement.

Consequences for the party who delays the decision

Delaying negotiation may lead to:

 

• • total loss of the possibility of registering a new trademark;

• • a drastic increase in legal costs;

• • the need to rethink or abandon the commercial strategy;

• • impossibility of attacking trademarks that were previously vulnerable;

• • reputational and operational damage.

In extreme scenarios, a company may become blocked within its own category, with no viable alternatives for introducing related new trademarks.

Examples of real cases

Below are examples based on real cases handled over the years, without any information that could identify companies or individuals:

 

Example 1: The agreement that never materialized

A beverage company sought to negotiate coexistence with a prior trademark owner whose mark was weak and unused. Immediate negotiation was recommended to avoid conflict and, in parallel, to file a non-use cancellation.

The client decided to “wait a few months.”

During that time, the counterparty :

 

• • filed two new applications derived from the old trademark;

• • initiated commercial use on social media and points of sale;

• • filed an opposition against the client’s trademark.

Result:
The non-use action was no longer viable; IMPI refused the new trademark; and coexistence became extremely difficult to negotiate.

 

Example 2: Time restarted from zero

A clothing manufacturer’s trademark was vulnerable for lack of use. The strategy was to attack through a non-use cancellation.

Immediate communication and a possible coexistence agreement were recommended before litigating.

The client waited until they “felt ready.”

During that time, the counterparty  filed a new identical trademark, with a new registration number, resetting the three-year use period.

Result:
The non-use cancellation became impossible for at least three years, and the client was prevented from registering similar trademarks.

 

Example 3: Anticipated opposition due to delayed negotiation

A cosmetics company detected a conflict with a prior trademark. The attorney recommended negotiating before filing.

The client decided to file the trademark “and see what happens.”

The counterparty  identified the intention and filed an opposition, strengthened its portfolio through Madrid, and offered coexistence only under highly restrictive conditions.

Result:
The client lost the opportunity to negotiate from a position of strength.

 

The relevance of professional advice: why you should follow the recommended strategy

An IP specialist does not simply interpret the law. They anticipate scenarios, reactions, and critical moments when the strategy has the highest probability of success.

When the attorney recommends:

 

• • negotiating now,

• • sending the letter this week,

• • waiting for the right moment,

• • not giving early notice,

• • not filing yet,

• • or initiating coexistence immediately,

they do so based on legal analysis, tactical considerations, and prior experience.

Delaying these decisions can:

 

• • Alter the strategy;

• • Weaken the client’s position;

• • Close doors that were open just one week earlier.

Conclusion: negotiating late can cost more than negotiating well

A coexistence agreement:

 

• • avoids litigation,

• • reduces costs,

• • ensures a path for new trademarks,

• • protects long-term strategy,

• • and provides legal certainty.

But to be effective, it must be negotiated in a timely manner, when the trademark owner is still in a strategic position and before the counterparty  has taken defensive measures.

In industrial property, timing is both a legal resource and a strategic tool.

Waiting too long can mean losing absolutely everything.

Please contact us for further details; we will be pleased to provide you with professional advice.

Info@merida-ip.com

www.merida-ip.com