Coexistence Agreement and Successors: the Decision of the Court of Palermo

A company dealing with coffee production and distribution sued, before the Court of Palermo, a joint-stock company operating in the same commodities sector asking to ascertain and declare that the latter was constrained by a coexistence agreement undersigned, at the time, by two sole proprietorships that the two companies, partied involved, had then succeeded.

By the agreement under exam, the two sole proprietorships had divided the national territory in order to determine the respective geographical area to operate in.

Trademark Coexistence Agreement

It’s useful to remember that coexistence agreements are actual contracts undersigned by two or more parties aimed at regulating, among other aspects, the use of signs potentially mistakable.

Through these agreements, as stated by the authoritative doctrine, the owner of the trademark “recognizes the legitimacy and therefore allows the use of a sign which could fall in their sphere of exclusivity”.

These agreements usually allow the use of potentially confusing signs under precise conditions (for example, using a specific graphic) or that the same is limited in a specific commodity sector or geographical territory.

In the case under exam, the respondent carried out its own commercial activity in the geographical areas outside its “competence” determining thus an infringement of the agreement, according to the plaintiff company.

In response to the alleged infringement, the respondent defended itself stating not only to not be bound by the contract, not being part of it, but also that the actor behaved as to express to have gone beyond the content of the coexistence agreement.

In particular, the actor company would have accepted the coexistence of the activity of the defendant in an area not within its competence, having the two companies collaborated in the sponsorship of a well-known soccer team.

The respondent therefore asked the Court to reject the plaintiff’s requests as groundless.

First of all, the Judge appointed to the issue observed that the coexistence agreements in trademarks matters have mandatory effectiveness inter partes. Then, it passed on to examine the succession between the original parties of the contract and the two companies involved considering it, for both of them, substantially pacific.

With respects to the conducts of the plaintiff, the Court observed that it could not denote a waiver to the rights arising from the agreements given that the collaboration in the activity of sponsorship of the soccer team in the territory not of competence of the plaintiff took place during a limited period of time.

For these reasons, the Court, with decision no. 3799/2021, accepted the plaintiff’s request declaring and ascertaining that both companies involved, having succeeded the sole proprietorships undersigning the agreement, were bound by the contract.


Giulia Mugnaini