When co-existence breaks down: Clarks v Trek and the limits of trade mark harmony

The illusion of stability

Trade mark co‑existence agreements are often treated as long‑term solutions. They are designed to draw clear commercial boundaries, with the aim of enabling the parties to operate in the market without conflict. In practice, however, those agreements cannot tell the future and in reality, they reflect market trends which exist at the time they were entered into.

The decision in C & J Clark International Limited (Clarks) v Trek Bicycle Corporation & Anor (Trek) [2026] EWHC 659 (Ch) illustrates how quickly that stability can erode. An agreement that functioned effectively for over a decade was ultimately tested by shifts in product design, branding strategy and consumer expectations.

The case is a reminder that co‑existence is not a static outcome. It is a framework that must be actively maintained as brands evolve.

Drawing lines in a moving market

At the centre of the dispute was a 2001 global co‑existence agreement. Its purpose was simple, to preserve a status quo in which Clarks sold TREK‑branded footwear and Trek sold cycling products and apparel, without overlap or consumer confusion. At the time, that division was commercially clear. Clarks’ TREK shoes were outdoor and casual products made from leather or nubuck. Trek’s presence was rooted in bicycles and cycling clothing. The parties were not competing, and the agreement reflected that reality.

Over time, however, those categories began to shift. Footwear became more technical, "athleisure" blurred the boundary between casual and sportswear. Consumers became accustomed to multi‑purpose products that could move seamlessly between activities. The result was predictable. Trek entered the cycling footwear space under the TREK name. Clarks expanded into sports‑style and fitness‑adjacent footwear. Both brands' evolutions encroached significantly into the other party's designated space.

 What had once been a clear divide soon became contested territory.

Meaning matters: how the court approached interpretation

The court approached the agreement as a carefully negotiated commercial settlement, emphasising that its purpose was to preserve separation and avoid confusion. As a result, the language was given its ordinary meaning, applied objectively and consistently with that purpose.

Two interpretative issues were central.

“Footwear” means footwear.

Trek argued that specialist cycling shoes should fall outside of the agreement, describing them as equipment rather than conventional footwear. The court rejected that categorisation.

The ordinary meaning of “footwear” was decisive. Shoes remain shoes, regardless of technical features or intended use. Nothing in the agreement suggested a narrower definition or a carve‑out for specialist products.

The practical effect was clear. Trek’s use of TREK on cycling shoes breached the agreement.

For businesses, this lesson is straightforward. If distinctions between product types matter commercially, they must be expressed explicitly. Courts will not infer them.

“Adapted for sports or fitness” is broader than it looks

Clarks’ position turned on a narrower interpretation of the restriction preventing use on goods “adapted for” sports or fitness. It argued that “adapted” required specific technical features, not simply a product that could be used in a sporting context.

The court disagreed. It held that “adapted for” means “suitable for”, and that “sports or fitness” is deliberately broad. It is not limited to defined activities or specialist use cases.

That approach reflects commercial reality. Modern footwear is rarely designed for a single purpose. A trainer may be worn casually, at the gym or outdoors. What matters is not exclusivity of use, but suitability.

On the evidence, a number of Clarks’ TREK‑branded shoes were marketed and designed as sports or fitness products. Internal documents, naming conventions and product descriptions all pointed in that direction.

As a result, Clarks also found itself in breach of the agreement.

The wider takeaway is that classification is not controlled solely by intention. Marketing language, product design and internal strategy documents may all be used to determine how a product is positioned in the market.

Informal alignment meets formal obligations

A recurring feature of long‑term commercial relationships is the tendency for parties to seek to rely on informal discussions as substitutes for contractual clarity. This issue arose sharply in the present case.

Trek argued that meetings in 2018, during which the parties discussed collaboration, amounted to consent or variation of the agreement. The court rejected that argument. There was no clear agreement, no written amendment and no authority on the part of the individuals involved in those discussions to vary the contract. The agreement therefore remained unchanged.

This reflects a consistent judicial approach. Co‑existence agreements are treated as formal instruments requiring clear and unequivocal variation. Commercial cooperation does not dilute legal obligations unless it is properly documented.

Control does not stop at the brand owner

An important aspect of the case concerned third‑party use. Trek had authorised use of its branding in connection with Lidl‑Trek team merchandise, including footwear sold through Lidl.

Although Trek did not sell the products directly, the court held that it was contractually responsible under the agreement. The agreement extended to affiliates and licensees, meaning that downstream use could trigger liability.

This is particularly significant in modern brand ecosystems. Sponsorships, collaborations and licensing arrangements are standard growth tools, but they introduce additional risk. In these scenarios, control over the brand must extend beyond the immediate organisation. Where it does not, the exposure sits with the rights holder.

Contract and trade mark law running in parallel

The case also illustrates the interplay between contractual and statutory protection. Trek’s conduct gave rise to both breach of contract and trade mark infringement under sections 10(1) and 10(2) of the Trade Marks Act 1994.

At the same time, the court declined to find infringement under section 10(3), which requires proof of unfair advantage or detriment to reputation. Trek’s actions were viewed as an attempt to grow its own brand rather than exploit Clarks’ goodwill. This distinction is important.

Lessons for modern brand strategy

Clarks v Trek highlights a broader theme. Co‑existence agreements are products of their time. They reflect market trends, consumer behaviour and product classifications, all of which are volatile and all of which many businisses and brand owners are trying to keep up with.  Against this background, an agreement can become increasingly difficult to comply with without tension.

Key considerations for brand owners include:

• Future‑proofing definitions
  Product classifications  should anticipate convergence, particularly in sectors such as fashion, sport and technology.

• Aligning internal practice with external commitments
  Marketing terminology, product naming and design strategy must be consistent with contractual limits.

• Documenting change clearly
  Informal discussions between parties are not a substitute for formal variation of an agreement. Should the agreement have a variation clause, this will need to be complied with.

• Managing third‑party risk
  Licensees, collaborators and sponsors must operate within the same boundaries. Businesses should be mindful that the liability of use in this context will still fall on them.

• Reviewing agreements regularly
  Long‑term arrangements require periodic reassessment against current commercial realities (with any variation taking place properly).

Co‑existence as an ongoing process

The central message from Clarks v Trek is that co‑existence is not a fixed solution. It is an ongoing process that must adapt to the way brands develop and markets shift. The original agreement worked because it reflected the genuine position of the parties at the time it was entered into. Once the brands evolves, and the position narrowed, it exposes the weaknesses is the co-existence regime, which didn't envisage the respective brands' expansion. For modern businesses, the challenge is not simply to negotiate co‑existence, but also to keep it under review and maintain it. That requires legal clarity, commercial awareness and a willingness to revisit assumptions as the brand evolves. Ultimately, the value of a co‑existence agreement lies not in its longevity, but in its ability to remain aligned with reality.