Property, intangible

a blog about ownership of intellectual property rights and its licensing

Another Dirty Co-Existence Agreement

I just read a post by my friend Neil Wilkof entitled The Dirty Little (Or Not So Little) Secret Of Trade Mark Law.  In it, he talks about co-existence agreements and too often their tolerance of confusion rather than avoidance of it.

And then I ran across a fairly uninteresting and poorly decided case that involved a coexistence agreement. But the agreement had something I’ve never seen before in one – a term shorter than both parties’ use of their respective marks:

And what a term – 25 years.  The agreement was dated for 1984 but according to the complaint it was effective on January 18, 1985, meaning that it expired on January 18, 2010.

It all started over 75 years ago when two brothers each opened confectionary stores some distance apart in Wisconsin using their surname “Beerntsen.”  The businesses were passed down from father to son to son in both cases.  In 1984 there was a dispute and the two families entered into the concurrent use agreement with the 25 year term.  The agreement set geographic limits for both parties.

Fast forward to 2003 when the defendant family sold its business to Schadrie Chocolates, which changed its name to Beerntsen Confectionary.  The plaintiff became unhappy and filed a trademark infringement lawsuit.  This is one allegation in the complaint:

If you can’t read it, it says “The Concurrent Use Agreement expired on January 18, 2010, yet Beerntsen Confectionary, Inc. continues to advertise and market its products using the Beerntsen name in Wisconsin and other states and continues to use ‘Beerntsen’s’ and ‘Beerntsen Candies’ trademarks as its own trademarks.”

So wow, what interesting stuff.  First, we have a plaintiff who is treating the agreement as a license rather than a co-existence or concurrent use agreement, alleging that somehow the defendant’s right to use the mark expired with the agreement.  Second, assuming that the agreement is not a license but, as Neil points out, an agreement to make certain there is no likelihood of confusion, what is the effect and purpose of a term of 25 years?

As to effect, assuming there has been no breach of the agreement, I think you come out of it with a pretty solid defense.  There is either no confusion (after all, both parties agree that there hasn’t been any confusion for 25 years and presumably continued consistent behavior would have the same result) or the defendant has an equitable defense based on the harm to to it that would be caused by having to cease use after 25 (or in this case, 75) years.

So what was the purpose of the term?  I can’t really fathom one for such a long period.  A short period, maybe, like five years, as a trial period to see whether the agreed-upon restraints might make sense and avoid a likelihood of confusion.  But 25 years?  I haven’t a clue.

Sad to say, though, we don’t find out what the effect of the agreement is.  The court held that the plaintiff’s BEERNTSEN mark didn’t have secondary meaning because the defendant was using BEERNTSEN too, and that there was no likelihood of confusion.  I leave it to you to read the reasoning if you care to, but be prepared for a completely wrongheaded analysis. The breach of contract claim was dismissed for lack of supplemental jurisdiction.

Beerntsen v. Beerntsen’s Confectionary, Inc., No. 11-C-151 (E.D. Wisc. May 24, 2012).  Complaint here.

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