Introduction

In business partnerships, marketing is usually a big part of how companies work together to promote their products or services. But what if one company doesn’t want its name tied to the other’s marketing? That’s where the prohibition on co-marketing clause comes in—it’s a part of the contract that stops one party from using the other’s name, logo, or brand in any marketing materials without getting permission first.

Let’s unpack what a prohibition on co-marketing clause is, why it matters, and what to keep in mind if you see one in a contract.

Read: Storage of legal documents: Best practices

The basics of a prohibition on co-marketing clause

A prohibition on co-marketing clause is a part of a contract that prevents one party from using the other’s name, logo, or branding in any marketing or promotional materials without getting the go-ahead first. This clause is especially useful in deals where one company wants to avoid being publicly associated with the other due to concerns like brand image, market positioning, or strategic reasons.

Here’s a simple example: Let’s say Company A is a high-end luxury brand, and Company B is known for its super-cheap prices. If they have a partnership, Company A might include a prohibition on co-marketing clause in the contract to make sure Company B doesn’t use their luxury brand in any promotions that could damage or water down their image.

Why are prohibition on co-marketing clauses important?

These clauses might seem like just another piece of legal fine print, but they play a crucial role in protecting your business:

1. Protecting brand identity: A brand is a company’s public face. This clause keeps that face looking good by stopping unwanted partnerships or marketing that could damage the brand’s reputation.

2. Preventing customer confusion: If two companies cater to different audiences, this clause helps avoid mixed signals that could leave customers scratching their heads about the relationship.

3. Controlling public image: It gives companies a say in how their name and reputation are used, making sure any co-marketing fits with their values and overall strategy.

How does a prohibition on co-marketing clause work?

A prohibition on co-marketing clause typically lays out:

• What’s off-limits: Prohibition on co-marketing clearly spells out what’s not allowed—like using the other party’s name, logo, colors, slogans, or any branding materials.

• Exceptions to the rule: Prohibition on co-marketing lists any situations where using the brand is okay, such as for internal use or specific projects that both parties agree on.

• Getting approval: Prohibition on co-marketing describes how and when one party needs to ask for permission before using the other’s brand in any marketing.

• What happens if it’s broken: Prohibition on co-marketing explains the consequences if the clause is violated, which could mean fines, ending the contract, or even legal action.

Read: The hidden dangers of auto-renewal clauses in contracts

When would you use a prohibition on co-marketing clause?

There are several scenarios where this clause can be useful:

• Protecting Your brand: If you have a strong, well-known brand, you probably don’t want just anyone using your name in their marketing. This clause helps keep your brand image intact.

• Avoiding bad pairings: If your business targets a specific market (like high-end luxury), you might not want to be associated with a discount brand that could harm your upscale reputation.

• Staying ahead of competitors: Sometimes, you may want to ensure your name doesn’t show up next to a competitor's in any marketing, or in a way that could give them an edge.

Pros and cons of a prohibition on co-marketing clause

Pros:

• Protects brand integrity: A prohibition on co-marketing clause keeps your brand safe from being used in ways that don’t fit with your values or market position.

• Controls public image: A prohibition on co-marketing clause gives you control over how your brand is shown to the world.

• Reduces risk: A prohibition on co-marketing clause lowers the chance of damage to your reputation from unwanted partnerships or bad marketing moves.

Cons:

• Limits creativity: A prohibition on co-marketing clause can limit creative marketing opportunities that might actually benefit your business.

• Leads to disagreements: If the clause isn’t crystal clear, it could cause conflicts over what counts as “prohibited” marketing.

• Restricts collaboration: A prohibition on co-marketing clause might make potential partners hesitant if they feel too boxed in by the rules on how they can market the partnership.

Key tips for handling a prohibition on co-marketing clause

If you come across this clause in a contract, here’s what to keep in mind:

• Get clear on the details: Make sure the clause spells out exactly what’s not allowed and any exceptions. This helps avoid any misunderstandings down the road.

• Agree on an approval process: Set up a simple process for getting permission if you ever want to use the other party’s brand. That way, you know exactly how to get the go-ahead.

• Know the consequences: Understand what might happen if the clause is broken, so you’re not caught off guard by any penalties or legal action.

Read: NDAs 101: Why defining confidential information can make or break a deal

How Cobrief can help with contract review

Reading your business contracts can feel overwhelming as an owner-manager of a small to medium-sized business. That’s where Cobrief comes in. Cobrief helps business owners and operators review their business-to-business contracts for legal risks.

Upload your contract to Cobrief's AI contract review software, click review and you’ll get a list of all the risks, in plain English. This helps you decide whether to sign, negotiate or reject the terms of your contract, or hire a lawyer. Think of it as a heat map for your contracts.

Get started here.

Conclusion

A prohibition on co-marketing clause is all about keeping control over how your brand is used and making sure it aligns with your business goals. While it might seem like a strict rule, this clause is key for protecting your brand’s reputation and avoiding any awkward partnerships. So, if you spot it in a contract, just remember—it’s there to help keep your brand safe in the unpredictable world of marketing.