[GuestPost] Keeping enemies closer: C&J Clark v TBC and trade mark coexistence agreements
Oliver Fairhurst
[GuestPost] Keeping enemies closer: C&J Clark v TBC and trade mark coexistence agreements
The IPKat is grateful to Katfriend Thomas Hood (Gatehouse Chambers) for the following contribution on the recent UK decision in C & J Clark International ltd v Trek Bicycle Corporation & Anor [2026] EWHC 659 (Ch). Over to Tom:
In the world of trade marks, businesses can often end up using similar marks in different sectors and risk stepping on each other’s toes. A coexistence agreement is one route through which some companies seek to avoid the courts. Two entities agree to carve out their distinct commercial patches so that they can use, and possibly protect, marks in those areas.
As Arnold J (as he then was) stated in Omega Engineering Incorporated v Omega S.A. [2010] EWHC 1211 (Ch) (here) at paragraph 62, the essence of these contracts is that “each party accepts restrictions upon its own freedom of action in return for the acceptance of restrictions by the other party. Those restrictions are intended primarily to differentiate the parties’ goods from each other in use, although they extend to differentiating registrations.” The UK government’s advice on coexistence agreements proves their potency at settling disputes, describing the documents as ones that can be “filed away and forgotten about”, but that it is “unwise to ignore it completely” (here).
Ian Karet OBE’s decision in C & J Clark International ltd v Trek Bicycle Corporation & Anor [2026] EWHC 659 (Ch) explores the breaching of coexistence boundaries. This article will explore this case, and the consequences that can arise where brands cease to peacefully coexist.
Carving out territory
The coexistence agreement was entered into in April 2001 by C&J Clark (‘Clark’) and Trek Bicycle Corporation (‘TBC’). It was a relatively short document. Some clauses related to Clark’s use of the word TREK and relevant trademarks, others to TBC’s activities as a cycling product company. To summarise the relevant terms:
- Clause 1: TBC were not permitted to object to Clarks’ use of TREK, “so long as” the goods weren’t adapted for cycling or commemorating cycling, or participating in sports or fitness.
- Clause 2: TBC will not attack Clarks’ registrations if they reflect the terms of Clause 1.
- Clause 3: Clarks would not use the mark TREK on any goods adapted for sports or fitness.
- Clause 4: Clarks would not object to TBC registering the work TREK for clothing products in relation to cycling.
- Clause 5: Clarks will not attack TBC’s registrations if they reflect the terms of Clause 4.
- Clause 6: TBC agree to only register for the mark for goods in relation to cycling, commemorating cycling, and sport or fitness.
As Karet held at paragraph 37, the effect of the coexistence agreement was “to preserve the status quo in which Clarks sold certain footwear marked TREK and TBC sold TREK cycling goods and clothing […] As a result of that division there was no confusion and that was the status quo which the parties agreed to preserve.” However, that status quo had been ruptured, requiring consideration of the contractual construction of these clauses and the impact that analysis had on the actions of each side.
Breaking Boundaries
To begin with the case of Clarks, there were several alleged breaches by TBC. One of the factual difficulties with the breaches was a suggestion of oral consent having been provided by a representative of Clarks’ during a meeting in 2018 such as to allow the brand to start a line of cycling shoes and insoles launched in early 2024. The court concluded that consent had not been provided, as (a) the terms at the meeting were too vague, (b) there was evidence of follow up in late 2018 to reach terms of a legal agreement beyond the initial meeting, and (c) the gifting of a last of the Clarks Desert Show model did not substantiate binding obligations on the parties. Therefore, TBC’s development of cycling shoes and insoles had not been consented to and therefore constituted a breach of the agreement.
Another alleged breach was against the Lidl TBC team, who had created branded trainers for their group on the Tour de France. The contractual question as whether clause 6 of the agreement bound Lidl to the same terms. The court found that Lidl was also bound and was held to be acting as an affiliate or licensee. Therefore, there was a further breach of clause 6 that barred TBC from using the mark TREK in relation to this type of footwear.
TBC also brought a series of claims of breach of the agreement against Clarks. The crux of the counterclaim was that Clarks breached the agreement by selling shoes under the TREK name that had been adapted for sport or fitness. The court reviewed several different models of shoes provided in evidence and concluded that they were all adapted for sport or fitness, and therefore Clarks were in breach. A further victory for TBC was the dismissal of a claim that TBC had breached the agreement again by opposing a registration in China in 2023. However, this arose because the judge found that Clarks itself was in breach at the same time by attempting to register a shoe that had again been adapted for sport or fitness.
Redrawing over transgressing
Making a finding of the contractual breaches of both sides, what Ian Karet’s judgment highlights is the practical consequence of not heeding the advice from the UK government at the start of this article. Coexistence agreements can be a benefit to market actors, but they should be assessed prior to a brand developing a new commercial outlet. As Chris Fotheringham and Sophia Jung of Ashfords state in their assessment of the decision, “coexistence agreements must be maintained, revisited and, where necessary, renegotiated as businesses diversify” (here).
Sometimes, the relationship may not permit reopening the coexistence agreement. Here, the parties tried to find a way through to consent to what became breaches. But, what the breakdown in relationship and High Court decision here evidence is the benefit of negotiating limits of a brand’s rights. Crucially, parties should prepare to accept that they are not silver bullets. When commercial ambition causes coexistence to end, parties should be prepared for conflict to commence.