It is not unusual for government entities to commercialise products and provide specific services, or allow licensees to do so, while using the entities’ names as brands. This occurs in particular in liberalised markets such as the telecommunications and postal markets. The question then arises as to whether these names can be protected under trademark law. In two recent cases the Supreme Court and the Federal Administrative Court afforded trademark protection to the mark SWISS ARMY, but denied it to POST.
In In re SWISS ARMY (B-3553/2007) the Federal Administrative Court revised a decision of the Swiss Intellectual Property Institute and held that the mark SWISS ARMY, which the government had applied to register as a trademark, had distinctive character in the sense of Article 2(a) of the Trademark Act.
The institute had based its decision on the fact that the Swiss armed forces constitute a special market and are closely linked to the goods of this special market. The institute stated that the mark SWISS ARMY was descriptive not only for intrinsic army goods and services, but also for most of the other commodities used by Swiss army institutions. Because these commodities are customised for the Swiss armed forces, they differ from normal commercially available products. Swiss consumers - notably people serving or who have served in the army - are aware of this difference and therefore regard SWISS ARMY as a reference to the related goods. The institute concluded that the mark could be registered only for goods and services for which the Swiss armed forces do not use a specific, customised design (eg, soap).
However, the Federal Administrative Court examined whether there were third parties for which the use of SWISS ARMY must be kept free. It asserted that the creation of other additional Swiss armed forces was very improbable. Hence, the name SWISS ARMY could not be available to third parties for typical army goods or services. Consumers also know that the Swiss armed forces are solely responsible for most of the services provided by them, even though other institutions such as the police or private security services are active in a somewhat comparable business field. This knowledge of the relevant public leads to the assignment of the mark to Switzerland. The goods and services for which registration had been denied by the institute were typical army products and services. This fact, according to the court, even intensified the identifying characteristics of the name in question. The court also observed that the fact that the Swiss armed forces constituted a special market weighed in favour of the appellant, since the purpose of trademarks is to enable consumers to distinguish the customised goods of one company from those of other companies. The court’s decision is final.
In In re POST (4A_370/2008) the Federal Administrative Court and the institute had registered the application by Swiss Post for the mark POST for several products and services, but not for postal services. On appeal, the Supreme Court confirmed this judgment.
The Supreme Court first addressed the question of whether the administrative court had violated Article 2(a) of the Trademark Act when holding that the mark POST was directly descriptive for postal services and post-related goods. It examined the meaning of the word in question. On the one hand, “post” designates any company active in the field of postal services, not a specific company (ie, Swiss Post) as the appellant argued. On the other hand, “post” stands for the goods delivered (eg, parcels, letters) and therefore directly describes these goods. According to the Supreme Court, the meaning of the word “post” changed during the last decade. Consumers no longer understand “post” simply as a monopolistic public law institution; today, the name also covers private suppliers of postal services. The public poll filed by the appellant did not show that Swiss consumers primarily thought of Swiss Post when hearing the word “post”. Not even the fact that consumers would predominantly think of Swiss Post could provide evidence for the distinctiveness of the word. According to the Supreme Court, due to Swiss Post’s long-term monopoly in the market there qwre no competitors to think of when hearing the word “post”. In line with previous decisions, the Supreme Court ruled that if a name is ambiguous it is excluded from registration if only one of its possible interpretations is descriptive. In the case at hand, it was crucial that the relevant Swiss trade circles and consumers understood “post” to be a directly descriptive name in respect of postal goods, rather than an indication of commercial origin, even if, as a secondary meaning, the name could be understood as an indication of commercial origin in respect of Swiss Post. The Supreme Court concluded that “post” was part of the public domain for postal services and related goods.
Names which are part of the public domain can acquire distinctiveness through use for the goods and services claimed if there is no absolute need to keep the name free for the trade, and particularly for competitors. However, there is an absolute need to keep the name available for competitors if they cannot chose from a variety of homologous words describing the particular trade. Therefore, the Supreme Court examined whether the term “post” was absolutely generic for postal services or whether it could acquire distinctiveness through use. According to Supreme Court jurisprudence, but not in line with Article 2(a) of the Trademarks Act, the acquisition of distinctiveness is excluded if the relevant trade circles rely on the use of a certain name in respect of certain goods or services. Swiss Post alleged that the competitors use numerous homologous expressions to identify their services and have done so for years (eg, UPS, DHL and FedEx). However, the Supreme Court did not accept this argument. According to the court, the competitors’ services in Class 39 are identified by fanciful or foreign words, the meanings of which Swiss consumers do not easily understand (eg, UPS Express Plus, Fedex International Priority). These names were judged not to be homologous to “post”; rather, the court found that were no homologous expressions for the word “post”. Hence, it concluded that “post” was absolutely generic with reference to postal services and that it could not acquire distinctiveness through use.
Finally, the Supreme Court addressed the question of whether “post” had acquired distinctiveness in respect of goods and services for which the name was not absolutely generic (ie, related goods). The court found that the public poll filed by the appellant did not show that the word “post” had acquired distinctiveness. In order to show the acquisition of distinctiveness, approximately two-thirds of the interviewees had to associate Swiss Post with the word “post”. The poll showed that this condition was not fully met. In addition, the documents supporting the poll showed that “post” seldom appeared in isolation, but was generally combined with the word “die” (“the”). DIE POST, which is a registered trademark in Switzerland, was of substantially higher distinctiveness than the simple name “post”.
The following lessons can be learnt from these decisions:
- As a matter of principle, names of government entities can be registered as trademarks.
- According to Swiss jurisprudence, some signs are so generic that they cannot acquire distinctiveness through use.
- As a rule of thumb, a public poll must show a recognition rate of 66% in order to show acquisition of distinctiveness through use.