A trademark coexistence agreement is used when two different trademark owners have rights to identical or similar trademarks. This agreement will help the parties resolve their dispute while protecting the business interests of both parties. The biggest concern when two owners have similar trademarks is confusion in the marketplace. This can be solved by limiting the trademark use to separate geographic areas, only allowing use for unrelated products, or using the trademarks in different channels. Before entering a trademark coexistence agreement, each party needs to consider the pros and cons of the agreement and what it means for their trademark use. It is common that one party will have more to lose than the other if their mark has a longer history or is easily recognizable.
TRADEMARK COEXISTENCE AGREEMENT
This AGREEMENT is entered into as of this 19 th day of December, 2005, by and between Alloy, Inc., a Delaware corporation (hereinafter “Alloy”), and dELiA*s, Inc., a Delaware corporation (hereinafter “dELiA*s”). Alloy and dELiA*s are sometimes referred to herein individually as a “Party” or collectively as the “Parties.”
WHEREAS, the Parties hereto have entered into that certain Distribution Agreement dated as of December 9, 2005 (the “Distribution Agreement”) regarding the separation of the direct marketing and retail business currently conducted by dELiA*s and its Subsidiaries from the other businesses conducted by Alloy and its Subsidiaries and the transfer by Alloy to dELiA*s of substantially all of the assets and liabilities of Alloy and its Subsidiaries related to such direct marketing and retail business, including stock and membership interests in certain Subsidiaries, followed by the distribution of all of the shares of common stock of dELiA*s then held by Alloy to Alloy’s shareholders (any capitalized terms not defined herein shall have the meaning ascribed to such terms in the Distribution Agreement);
WHEREAS, in connection with the transactions contemplated by the Distribution Agreement, the Parties have executed a Partial Trademark Assignment creating a joint interest in certain trademarks reflecting the Parties’ actual and anticipated use of certain trademarks in commerce in connection with their respective goods and/or services;
WHEREAS, the Parties wish to amicably confirm and acknowledge their respective rights to use and register the trademarks set forth on Exhibit A hereto and any colorable imitations, variations or derivations thereof (the “Marks”).
NOW, THEREFORE, in consideration of the promises and mutual obligations and undertakings set forth herein, the Parties hereto agree as follows:
1. The Parties agree that , as between Alloy and dELiA*s, dELiA*s has the exclusive right to use the Marks throughout the world in connection with clothing, direct merchandising services (via catalogs and e-commerce websites), and mall-based retail store services (“the dELiA*s Goods and Services”). The Parties agree that dELiA*s shall only use Marks in connection with the dELiA*s Goods and Services.
2. The Parties agree that , as between Alloy and dELiA*s, Alloy and its Subsidiaries have the exclusive right to use the Marks throughout the world in connection with the services providing targeted media and promotional programs for advertisers who want primarily to market to consumers through the use of, among other methods, print media, display media boards, database marketing, email marketing, direct marketing campaigns through email or other media, websites, promotional events, and on-campus marketing programs, among others, and all other goods and services now or hereinafter provided by Alloy or its Subsidiaries, other than the dELiA*s Good and Services (the “Alloy Goods and Services”). The Alloy Goods and Services shall include retail or merchandising services conducted on behalf of a third party to the extent such services are offered as a component of a targeted media or promotional program as described above. The Parties agree that Alloy shall not use the Marks in connection with the dELiA*s Goods and Services.
3. dELiA*s , its Subsidiaries, divisions and Affiliates, consent to the use and registration by Alloy of the Marks in connection with the Alloy Goods and Services throughout the world and will refrain from taking any action or proceeding, legal or otherwise, that would hinder Alloy in its free and unfettered use and registration of the Marks in connection with the Alloy Goods and Services. dELiA*s, its Subsidiaries, divisions and Affiliates will not challenge or contest in any manner Alloy’s mark or the registration or ownership of the Marks by Alloy with the Alloy Goods and Services.
4. Alloy , its Subsidiaries, divisions and Affiliates consent to the use and registration by dELiA*s of the Marks in connection with the dELiA*s Goods and Services throughout the world and will refrain from taking any action or proceeding, legal or otherwise, that would hinder dELiA*s in its free and unfettered use and registration of the Marks in connection with the dELiA*s Goods and Services. Alloy, its Subsidiaries, divisions and Affiliates will not challenge or contest in any manner dELiA*s’ mark or the registration or ownership of the Marks by dELiA*s with the dELiA*s Goods and Services.
5. In the event that dELiA*s’ applications or registrations for the Marks are cited against Alloy’s applications for registration of the Marks with the Alloy Goods and Services and bar their registration , so long as this Agreement is in force and adhered to by Alloy, dELiA*s will cooperate with Alloy at Alloy’s expense by providing its written consent, restricting its applications and registrations to the dELiA*s Goods and Services, or taking any other action reasonably necessary to permit registration of Alloy’s rights in the Marks with the Alloy Goods and Services.
6. In the event that Alloy’s applications or registrations for the Marks are cited against dELiA*s’ applications for registration of the Marks with the dELiA*s Goods and Services and bar their registration , so long as this Agreement is in force and adhered to by dELiA*a, Alloy will cooperate with dELiA*s at dELiA*s’ expense by providing its written consent, restricting its applications and registrations to the Alloy Goods and Services, or taking any other action reasonably necessary to permit registration of dELiA*s’ rights in the Marks with the dELiA*s Goods and Services.
7. Alloy and dELiA*s agree that , except as otherwise expressly provided in any separate written agreement entered into between the Parties, each will not associate itself with the other Party or the other Party’s Goods and Services. To that end, Alloy and dELiA*s agree that they will take reasonable steps to prevent confusion between their respective Goods and Services, should such confusion occur in the future.
8. This Agreement will be binding on and inure to the benefit of the Parties , their successors, assigns, licensees, Subsidiaries, divisions, Affiliates and all others acting by or through them or with or under their direction or in privity with them. This Agreement is likewise binding upon any permitted assignee of the Marks by either Party.
9. This Agreement will be deemed to have been jointly drafted by the Parties and will be construed in accordance with its fair meaning , and not strictly against any Party.
10. The Parties respectively represent and warrant that they have the full legal right and authority to enter into this Agreement and to perform any obligations undertaken pursuant to this Agreement , that the persons signing on their behalf are legally authorized to do so, and that they have not sold, assigned, or otherwise transferred, prior to the date of this Agreement, any claim or demand that they had or might have had against the other Party or Parties.
11. This Agreement shall , unless the rights to all Joint Marks are consolidated with a single Party, remain in full force and effect until the expiration of the last to expire of any rights in and to the Joint Marks in any country.