Legislative framework and causes of action

Trademark law, rules and regulations

Swiss trademark law is governed by the Federal Act on the Protection of Trademarks and Indications of Origin (the Trademark Protection Act, SR 232.11) and the Ordinance on the Protection of Trademarks (SR 232.111). By ‘indications of origin’, the Trademark Protection Act means geographical indications.

On an international level, Switzerland is party to most treaties relevant to trademarks, including:

  • the Agreement on Trade-Related Aspects of Intellectual Property Rights;
  • the Paris Convention for the Protection of Industrial Property;
  • the Madrid Agreement and Protocol Concerning the International Registration of Marks;
  • the Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks; and
  • the Trademark Law Treaty.

National Swiss trademarks are registered and published in the database of the Swiss Intellectual Property Office (IPO) (swissreg.ch) and international marks are published only in the World Intellectual Property Organisation’s databases Romarin (wipo.int/romarin/search.xhtml) and Global Brand (wipo.int/branddb/en/index.jsp).

Causes of action

The holder of a trademark registration has the exclusive right to use the mark to identify the goods or services for which the mark is registered. Any person whose right to a trademark or geographical indication is infringed or under threat of infringement may bring an action before the court. Infringing uses are use of an identical sign for identical goods or services or use of an identical or similar sign for similar goods or services resulting in likelihood of confusion. The infringing mark must generally be used in commerce and as a trademark, and not only in a descriptive or decorative way. The exclusive licensee of a trademark may bring a separate action before the court, irrespective of whether or not the licence has been registered.

The proprietor of a famous mark may prohibit others from using identical or similar signs for any type of goods or services if such use is detrimental to the distinctiveness of the famous mark (dilution) or exploits or damages its reputation. The scope of protection of a famous mark is therefore extended, since it is not limited to the claimed goods and services. Registration of a famous mark is not a requirement for dilution as a cause of action.

Moreover, Swiss law protects unregistered marks to the extent that they are well known within the meaning of Article 6bis of the Paris Convention. Outside of this specific framework, unregistered marks enjoy only limited protection under the Unfair Competition Act, provided that they have acquired both distinctiveness through use and significant goodwill in the Swiss marketplace.

Alternative dispute resolution

Mediation and arbitration

Swiss law does not specifically provide for mediation and arbitration with respect to trademark infringement. However, certain courts apply meditation techniques in the course of trademark litigation. For instance, the Commercial Court of Zurich routinely calls the parties after a first exchange of briefs to a so-called ‘settlement hearing’. The judge will then present his or her preliminary view of the case and, in the aftermath of this preliminary assessment, will try to find a settlement solution with the parties. In over 60% of cases settlements are reached between the parties at these court-administered settlement hearings.

By contrast, arbitration is often used in relation to trademarks and other IP rights and the decision of the arbitration tribunal, such as cancellation of a mark, will be recognised and enforced by the Swiss IPO. In practice, trademark-related arbitrations occur most frequently with respect to trademark licence and co-existence agreements that include arbitration clauses.

Domain names

Mechanisms based on the Uniform Domain Name Dispute Resolution Policy are in place for both ‘.ch’ and ‘.swiss’ domain names.

Litigation venue and formats

Court system and litigation venues

The Swiss IPO is competent to register trademarks and to adjudicate (post-grant) oppositions against newly registered trademarks. Opposition decisions of the IPO can be appealed to the Federal Administrative Court, which acts as the last instance.

As of January 1 2017, Switzerland will introduce a non-use revocation action before the IPO. At present, non-use cancellation actions must be filed in civil courts. It is expected that the cheaper and faster administrative revocation proceedings before the IPO will result in more cancellations of trademarks that are no longer genuinely used.

Civil litigation and therefore trademark infringement proceedings are adjudicated by the competent courts in the 26 cantons. Cantonal law designates the competent court for trademark disputes. These courts are competent to hear all IP disputes (with the exception of patents, which are adjudicated by the specialised Federal Patent Court), including disputes concerning trademark infringement, nullity, ownership, licensing and transfer of rights. Most cantons have designated their high court as the sole cantonal instance for such disputes. However, the four larger cantons (Argovia, Berne, St Gall and Zurich) submit trademark-related disputes to their commercial courts, which are also second-instance courts. These four courts hear most trademark cases, since they employ both professional lawyer judges and expert judges with a specific IP background. The forum-shopping possibilities described below often allow trademark owners to submit their disputes to those four courts.

In principle, the competent courts can deal with trademark infringement and invalidity issues simultaneously. This is always true with respect to Swiss domestic trademark issues; in cross-border cases, this may not be permissible due to lack of jurisdiction. Provided that the court has jurisdiction, the defendant may seek to invalidate the trademark by way of either a counterclaim or a mere objection or defence.

Forum shopping

The question of which cantonal court has jurisdiction depends first on whether it is a Swiss domestic or an international dispute and second on whether it is an infringement action or a declaratory action or any other action.

For Swiss domestic infringement actions, the plaintiff has the choice to sue in four different venues. It may sue at the domicile or registered office of the defendant or at its own domicile or registered office, or where the act occurred or had its effect (forum delicti). ‘Forum delicti venue’ means in practice that plaintiffs can choose among all 26 cantonal courts if the infringement occurs in all of Switzerland (ie, with respect to online offerings). This relative freedom to choose a venue in case of infringement in Switzerland allows for extensive forum shopping. A well-represented plaintiff will thus usually submit its action to a court that is known for its expertise, efficiency and willingness to grant preliminary injunctions.

Domestic declaratory actions, such as actions for cancellation or assignment of a trademark, and other actions must be brought before the court at the domicile or registered office of the defendant. There is thus no forum-shopping possibility for such actions.

The venues for international trademark disputes are quite similar. For infringement actions, the plaintiff can choose between three venues: the domicile or registered office of the defendant, the place where the act occurred or the place where it had its effect. For declaratory actions, the plaintiff may file suit only before the court at the domicile of the defendant or, if the defendant has no domicile in Switzerland, at the registered office of its representative. If the defendant has no representative in Switzerland, the plaintiff must sue at the seat of the IPO in Berne.

Jury versus bench

Trademark cases in Switzerland are adjudicated by judges alone, without a jury. All proceedings are bench trials.

The four commercial courts of Argovia, Bern, St Gall and Zurich have professional lawyer judges on the panel, as well as expert judges. In trademark proceedings, the expert judge will usually be a lawyer in private practice familiar with IP rights, or potentially a patent and trademark attorney.

Damages and remedies

Main proceedings, final remedies

Available remedies: The owner of a trademark or indication of origin may seek the following remedies:

  • an injunction against the infringer forcing it to cease and desist from the infringement;
  • a seizure order with the possibility to destroy infringing products;
  • an order forcing the defendant to account for the source and quantity of infringing goods;
  • an account of profits;
  • publication of the decision in certain circumstances;
  • monetary remedies;
  • an action for declaratory judgment (eg, cancellation of the infringing trademark); and
  • an action for assignment of the infringing trademark.

Monetary remedies: Damages (ie, lost profits) due to trademark infringement are hard to recover in Switzerland. Recently, the focus of monetary remedies shifted to account/surrender of profits or reasonable royalties; the latter is based on the legal theory of unjust enrichment. Treble or punitive damages are not available.

Cancellation and assignment actions

Any person that can demonstrate a legal interest may apply to the court for a declaratory judgment as to whether a right or legal relationship governed by the Trademark Protection Act does or does not exist, such as a cancellation action (see below). In certain circumstances, the Trademark Protection Act also provides the remedy of an action for assignment of a trademark, instead of a cancellation action – namely, if an agent registered the mark of its principal without the latter’s consent.

Criminal proceedings and customs assistance

A trademark owner can also initiate criminal proceedings against the infringer – in practice, most efficiently when counterfeit products are in issue.

It can also rely on customs assistance and border measures.

Permanent injunctive relief

Injunctions are common in Switzerland when it comes to trademark litigation. Injunctive relief can be granted during the main proceedings, but more often during separate interim proceedings initiated before the main proceedings.

Preliminary proceedings/relief

Preliminary injunctions: Preliminary injunctions are frequently issued in trademark litigation, but usually only after the defendant has been heard.

The requirements for preliminary injunctions are:

  • a prima facie case of existing or imminent trademark infringement;
  • irreparable harm; and
  • relative urgency.

The burden of proof is reduced as no strict evidence is required. It is sufficient that the plaintiff puts forward a prima facie case – that is, that it makes it believable to the judge that there is trademark infringement, irreparable harm and urgency. The requirement of urgency is relative in the sense that the preliminary proceedings should not last longer than the main proceedings, which in practice means that urgency is absent after one year has elapsed. However, it is still advisable to act quickly to convince the judge of a valid prima facie case.

Where urgency is particularly acute – for instance, if a trade fair is imminent – a preliminary injunction can be issued ex parte. The defendant will then be heard later on in the proceedings.

Preliminary injunctions must be validated in the main proceedings; otherwise, they are automatically lifted if the term set by the court – usually one to two months (extendable) – is not met.

Other preliminary relief: Rights owners may request an order during preliminary injunction proceedings to have infringing goods seized and information as to their source secured. Moreover, where there is a danger that evidence may be lost, owners may request an order to secure it in interim proceedings. However, the Swiss procedure does not provide for pre-trial discovery or other far-reaching mechanisms to secure evidence of infringement.

Evidencing the case

Investigations and first steps

It is helpful to conduct trap purchases to obtain evidence of both trademark infringement and its location, to ensure that the chosen court is competent to hear the case.

It is customary to send cease and desist letters before commencing court action, but there is no legal requirement to do so.

Trademark litigation is primarily based on written submissions by the parties and document evidence. Only in specific cases will surveys and expert witnesses be used.

Survey evidence

Overall, survey evidence does not play a key role in trademark infringement actions in Switzerland. This is largely because likelihood of confusion is considered a legal question to be decided by the court without relying on factual considerations, such as survey evidence.

However, survey evidence is increasingly used to support arguments of acquired distinctiveness and the well-known character or fame of a trademark. Typically, survey evidence is introduced in trademark proceedings by one of the parties – if it supports the party’s argument of acquired distinctiveness or well-known or famous trademark status – and is then considered a party allegation. Only in rare circumstances, and when requested by a party, will the court appoint an expert to conduct a survey on behalf of the court.

Where the plaintiff relies on the extended protection afforded to well-known or famous marks, however, survey evidence becomes important. Unless the trademark is notoriously known to the court (eg, NESTLÉ – a trademark that is widely known in Switzerland), the plaintiff must prove that its trademark is famous and thus widely known by the public at large in Switzerland. Although there is no specific legal threshold to prove fame in Switzerland, courts will usually expect a recognition threshold of over 50%.

Expert witnesses

Expert witnesses are rarely used in trademark litigation. However, they play a role when adducing survey evidence: in such cases, the court can appoint expert witnesses upon request by one of the parties. Typically, these will be cases of trademarks with acquired distinctiveness or of famous or well-known marks. More importantly, though, if technical aspects are in issue – such as functionality or technical necessity of three-dimensional marks, – then the court must appoint an expert witness to assess the technical aspects of the case.

Available defences

Trademark invalidity

A defendant can claim that the mark in dispute is invalid based on either absolute grounds, such as lack of distinctiveness or technical necessity, or non-use for over five years.

In Swiss domestic cases, defendants can rely on the non-use objection and thus force plaintiffs to prove genuine use of their Swiss marks. However, in cross-border cases where plaintiffs rely on foreign marks, the Swiss courts will not accept jurisdiction over the non-use objection; they will stay the Swiss infringement proceedings and set the defendants a deadline to file a cancellation action abroad with the competent court.

The same applies to the other invalidity arguments against the plaintiff’s mark based on absolute grounds. In Swiss domestic cases, this objection forces the plaintiff, for instance, to prove that the mark has acquired distinctiveness through use (best shown through a survey). In cross-border cases, the cancellation action against the foreign mark must be brought before the competent foreign court.

Limits to trademark protection

A defendant can argue that its use is not infringing the mark in dispute. It may claim that the trademark rights are exhausted, or that the plaintiff’s use was merely descriptive or decorative. Such uses do not warrant trademark protection. Switzerland applies the principle of international exhaustion, allowing for genuine grey-market goods to enter Switzerland from anywhere in the world.

A defendant may invoke prior use of a mark and therefore continue its use, as long as it was using the mark before the plaintiff applied for registration.

Acquiescence

Acquiescence is an available defence. However, there are no specific rules with respect to duration and other factors. Rather, the courts assess acquiescence on a case-by-case basis by taking four factors into account. First, the mark owner must have known or should have known of the infringing mark. Second, it must have tolerated that use for a long period, usually at least four to eight years. Third, the defendant must have acquired valuable goodwill in the meantime. Lastly, the defendant must have acted in good faith.

The courts will consider these four factors in an overall assessment so that the prevalence of one factor can have an impact on the outcome. Thus, if the defendant acquired significant goodwill and the plaintiff should have known of it, even a shorter period of less than four years can lead to the forfeiture of rights.

Appeals process

Trademark litigation cases are heard by the higher cantonal instance (ie, the high court) or, where available, the commercial court. Hence, the usual appeal from the first to the second instance is not available in trademark cases. Trademark decisions can be appealed only once to the Federal Supreme Court.

Limited review

An appeal to the Federal Supreme Court does not allow for a full review of the case. Rather, mainly legal issues can be appealed and factual issues only if the previous instance relied on obviously wrong facts.

New evidence

New facts and evidence are admissible before the Federal Supreme Court only if the lower-instance decision made it necessary for such new facts and evidence to be introduced on appeal.

Appeal against preliminary injunction decisions

The appeal possibilities are further restricted in preliminary injunction proceedings. On appeal, only irreparable legal (and not factual) harm can be addressed. Ex parte injunctions cannot be appealed.

Challenge to appeal decisions

The Federal Supreme Court is the only appellate court and its decisions are final.

Walder Wyss Ltd

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PO Box 1236

Zurich ZH 8034

Switzerland

Tel +41 58 658 58 58

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Web www.walderwyss.com

Markus Frick Partner markus.frick@walderwyss.com

Markus Frick is a partner in the IT, IP and competition team of Walder Wyss. He specialises in all aspects of IP law, with a particular focus on trademark and unfair competition law. He frequently represents clients in complex and cross-border trademark litigation before courts and administrative bodies. He advises clients on the development and management of IP rights, related contracts and transactions.

Mr Frick is a graduate of the University of Zurich and New York University School of Law. He is admitted to the New York Bar. He is listed in international rankings as a leader in his field.

Magda Streuli-Youssef Partner magda.streuli@walderwyss.com

Magda Streuli-Youssef is a partner of Walder Wyss and in charge of the firm’s IT, IP and competition team. She represents parties before courts and state authorities in all kinds of IP, media and unfair competition law matters. She has broad litigation experience, including several landmark court cases in the field of copyrights, trademarks and unfair competition law. Her practice areas also include IP strategies, IP audits and licensing, drafting and negotiation of all types of IP-related contract, and advising on IP, media and unfair competition law matters.

Ms Streuli-Youssef graduated from the University of Zurich. She is listed in international rankings as a leader in her field.

This article first appeared in World Trademark Review. For further information please visit www.worldtrademarkreview.com.