Transfer or cancellation

Procedure

What is the typical format for a cancellation or transfer action in court litigation (domains registered in either a ccTLD or a gTLD) and through ADR (ccTLD only)?

There is no compulsory alternative dispute resolution (ADR) procedure concerning the country code top-level domains (ccTLDs) .ch and .li, and gTLDs.

Article 14 of the Ordinance on Internet Domains (OID) provides that SWITCH offers an ADR procedure (ADR proceedings) for the ccTLDs .ch and .li, which has been in force since 1 March 2014. SWITCH has tasked the World Intellectual Property Organization (WIPO) Arbitration and Mediation Center to conduct these ADR proceedings. The proceedings are self-regulatory and binding to all .ch and .li ccTLDs, meaning they must respect the final outcome of ADR proceedings if they did not participate in them (see section 4.2 of SWITCH’s general terms and conditions, available at www.switch.ch/about/disclaimer/gtc (28 February 2020)). The WIPO Arbitration and Mediation Center also provides ADR proceedings for other gTLDs.

The scope of the examination of ADR proceedings is relatively narrow. For gTLDs, the ADR proceedings are only available if the registrant has:

  • registered a domain name that is identical or similar to a claimant’s trademark; and
  • no legitimate interest in registering and using the domain name and had acted in bad faith.

 

For the ccTLDs .ch and .li, the ADR proceedings are available if the registrant has registered a domain name that infringes any distinctive signs worth protecting of the claimant (eg, a trademark, a name, a company name, a geographic indication or a sign protected under unfair competition law) in a clear and undisputable manner; a showing of bad faith registration is not required in these proceedings. The proceedings are usually closed with the decision when an expert orders a domain name to be deleted or assigned to the claimant.

The ADR proceedings are not compulsory. They are also not considered arbitration proceedings since no arbitration clause is agreed between the parties and the decisions rendered are not binding (in the sense of a res judicata effect). Resorting to civil courts always remains possible. Consequently, rights to domain names can only be established and enforced in a definite, binding manner by the civil courts.

 

Types of procedure before civil courts

There are generally two types of procedures concerning domain name disputes at the ordinary courts of law. Preliminary injunction proceedings and ordinary main proceedings.

If a matter is urgent (ie, not much time has elapsed since first knowledge of the infringement), a preliminary injunction may be applied to secure the rights infringed. Preliminary injunctions cannot order definitive measures (eg, deletion or assignment of a domain name), but a court can order a registry (eg, SWITCH) to, for example, block a domain name in dispute.

A party may always assert the claim that a domain name registered infringes their rights in ordinary main proceedings. The outcome of these proceedings depends on the substance-matter assessment of the dispute and the proceedings are closed with an ordinary court decision where a domain name can be ordered to be deleted or assigned to the claimant. SWITCH is not in a position to assign domain names to another holder, but it can issue a transfer code to the winning claimant with which the claimant must seek the same registrar under which the defendant registered the domain name and ask for the execution of the assignment. Generally, the assignment of domain names is considered the more appropriate remedy by courts than a deletion. Deletion of domain names can sometimes be considered excessive (eg, the owner of a website addressed to an international audience could be obliged to add a disclaimer saying the website does not address or support Swiss customers, rather than ordered to delete the entire global website under the domain name). Further, deletion of a domain name can cause new follow-up problems (after deletion, a re-registration by the same offender can occur after a lockdown period of 40 days).

 

Overview: the substance-matter assessment of domain name disputes before courts

Domain name disputes do not fit into one category. Different legal implications may give rise to different remedies. Roughly summarised, the following categories of domain name disputes can be discerned.

  • disputes between parties’ distinctive signs (eg, trademarks, names, company names and distinctive signs used in the market that may benefit from a protected position under unfair competition law); and
  • disputes between domain name owners and third parties interfering with the owner’s business by using similar signs.

 

The first category constitutes the majority of domain name disputes.

Domain names are a reserved address on the internet (a name associated with an internet protocol address) and the same domain name cannot be used again. However, domain names do not constitute an absolute intellectual property right granting exclusive rights in the traditional sense. From the point of view of the internet users, a domain name designates the website available under the domain name and not the domain name itself. Therefore, according to the established practice of the Swiss Federal Supreme Court (FSC), a domain name can also be used as a distinctive sign in the market (see the FSC, 9 June 2011, 4A_92/2011). It may, therefore, also conflict with trademarks, names, company names or other positions in the market under unfair competition law statutes. This is confirmed in article 47, paragraph 2 of the OID, according to which domain name disputes on the ‘private rights of third parties’ are to be conducted under ‘provisions of private law’ (which includes intellectual property law). In the first decision of the FSC on domain names available (FSC, 126 III 239 – berneroberland.ch), the court held that domain name registrations must respect existing intellectual property rights and principles of fair competition (see consideration 2.c).

Swiss case law has taken some time to establish conclusive rules on how to treat conflicts between domain names and pre-existing third-party rights. A first, important feature (also confirmed by Swiss scholars) is that the registration of a domain name and the specific use of a domain name by placing content on the associated website should be differentiated. The registration of a (conflicting) domain name per se does not constitute an infringing use of a trademark in trade; the latter should be assessed concerning the website hosted under the domain name and the specific use of the domain name related to the goods and services on the website. This emanates from the ‘speciality principle’ governing trademark law, according to which trademark conflicts can only be assessed for specific goods and services (FSC, 8 November 2004, 4C.31/2004 – riesen.ch; differently earlier in FSC, 19 May 2003, 4C.377/2002). Swiss scholars opine that the same principle should apply to name conflicts and public deception conflicts under unfair competition law. Regarding the use of company names, a considerable amount of case law in Switzerland has held that the use of a company name as a domain name should not constitute an infringement since the domain name does not describe the company, but only the website as such (see Commercial Court of Zurich, 13 March 2017, HE160500-O – Schwiizergoofe, or the Supreme Court of Thurgau, 6 June 2002, in sic! 2002, 686, emarket.ch). Other opinions differ on this (Christian Hilti, ‘Internet Domain Names’, in Hans Rudolf Trüeb (editor), Current Questions in E-Commerce, Zurich 2001, 90, or, for example, Rolf H Weber, Schutz von Domänenamen im Internet, SJZ 1996, 407) and they were also confirmed in certain court decisions, such as Tribunal d’arrondissement de Lausanne, July 23, 2001, sic! 2002, 57 – confideco.ch, according to which any commercial use of a domain name could be considered an unlawful company name use. Nevertheless, the registration of a domain name conflicting with other rights (but without using the domain name and the underlying website as such) is mostly considered an act of unfair competition (namely an obstructive behaviour without legitimate interests (eg, domain name grabbing or cybersquatting) or unfair exploitation of reputation, if the sign used for a domain name is particularly famous (but less likely a concrete infringement of trademarks, names or company names)).

 

Jurisdiction

At first instance, a local court is competent to decide domain name disputes involving third-party trademarks, names, company names and unfair competition law aspects. Each canton in Switzerland provides for one specialised instance that handles these types of disputes in first and last instance (article 5 of the Swiss Civil Procedure Code (SCCP)). In principle, the courts are locally competent at the place where an infringement takes place and has its effect and where the domain name registrant is domiciled. At second instance, the FSC deals with appeals against first instance intellectual property or unfair competition law decisions. The decisions of the FSC are final and binding.

 

Evidence

Obtaining evidence in main proceedings at the ordinary courts of law is determined by the types of evidence allowed under the SCCP. There are five conclusive means of evidence, namely:

  • the expert;
  • the inspection;
  • the hearing of the parties;
  • documentary evidence; and
  • the hearing of witnesses.

 

In the context of disputes concerning domain names, documentary evidence and the hearing of witnesses are of primary importance. The claimant is responsible for providing evidence of his or her own motion of the facts that his or her claims or defences are based upon. There is no principle of ex officio investigation.

Choosing a forum

What are the pros and cons of litigation and ADR in domain name disputes? What are the pros and cons of choosing a local forum to litigate a gTLD dispute compared with the ICANN ADR format for the gTLD?

The ADR proceedings conducted by the WIPO Arbitration and Mediation Center are not mandatory. They are self-regulatory and binding to the owners of all .ch and .li ccTLDs as they must respect the final outcome of ADR proceedings if they do not participate in them (this is pre-agreed in the general terms and condition of SWITCH). Nevertheless, rights in domain names can only be decided and enforced in a definitive and binding manner through a court action. One advantage of ADR is the fact that the WIPO Arbitration and Mediation Center has more knowledge of these types of disputes than courts (dealing with multiple different matters). Moreover, ADR proceedings may grant more confidentiality and speed (owing to the standardisation of the process). Both proceedings in Switzerland (concerning ccTLDs and gTLDs) are handled by the WIPO Arbitration and Mediation Center.

Choosing a local forum to litigate a domain name dispute can mean it is dealt with in a court known to the parties. However, from a practical perspective, local fora are difficult to agree on in advance, since most parties involved in domain name disputes are not contractually bound parties (ie, they are not known to each other).

Appeal

What avenues of appeal are available?

Decisions rendered by a state court in domain name disputes are subject to appeal. Since most domain name disputes involving intellectual property rights or unfair competition claims are dealt with one specialised instance in first and last instance (article 5 of the SCCP). The appeals must then be filed to the next instance level, which is the FSC. An appeal to the FSC has only merits in substance matters. Procedural errors can no longer be invoked unless they are clearly arbitrary or discriminatory.

Who may claim

Who is entitled to seek a remedy and under what conditions?

The owner of a trademark, name right, company name or claim under unfair competition law is entitled to seek remedies based on the registration or use of a domain name, provided that he or she has given subject matter claims (existing infringement).

The licensee of the aforementioned rights cannot on its own file an infringement lawsuit unless he or she is an exclusive licensee or entitled to claim by contract (ie, in a licence agreement).

Who acts as defendant

Who may act as defendant in an action to cancel or transfer a gTLD in local courts?

Generally, the registrant because he or she is mostly responsible for the registration and the use of the domain name (eg, content posted on a specific website linked to the domain name). When the registration and use of the domain name occurs by two different parties, both of them can be sued as defendants as they are both contributing to the same infringing act (contributory infringement). However, only the registrant can be ordered to cancel or transfer the domain name to the claimant while the other defendant (the user) can be ordered to forbear from publishing infringing content over this domain name or any other, new domain name in the future.

The registry is not a party to private infringement proceedings. The registry is a public authority that can only be ordered by a civil court to conduct changes in the registry.

The registrar (acting as private registration agent of the registrant) could theoretically be involved in litigation proceedings as a contributory infringer if he or she concealed the identity of the registrant.

Burden of proof

What is the burden of proof to establish infringement and obtain a remedy?

The burden of proof depends on the type of claims and on the procedures at stake.

Preliminary injunction proceedings generally require a lower level of proof than ordinary court proceedings. Preliminary injunction proceedings usually require high credibility and plausibility, whereas ordinary court proceedings require a high probability that an infringement has occurred.

The following is a summary of the subject-matter assessment.

 

Infringement of trademarks

A trademark infringement generally requires an entity that is not the trademark holder to use a sign with a trademark to offer identical or similar goods or services to the trademark holder. All relevant elements of the individual case must be taken into account. This comprehensive analysis implies an interdependence between the factors at stake; in particular, the similarity of the signs or the trademark, the goods or services in question and the industry sector of both parties. Disclaimers on a website (hosted under the domain name) prominently clarifying who the domain name owner is (ie, stating that they are not the trademark owner) can sometimes also be taken into consideration and avoid confusing similarity. Regarding the infringement of trademarks with a domain name, the specific content posted on a website under the domain name should be assessed and not the registration of the domain name itself.

 

Infringement of company names

Similar to the principles established for the infringement of trademarks, an infringement of business signs may be present where there is a risk of confusion between two identical or similar signs used to denominate and describe a company. As regards the infringement of company names with a domain name, certain court decisions and scholars hold that a domain name describes a website and not the company that owns it and, thus, this does not constitute a company name infringement. Other decisions and scholars hold views to the contrary. One should assess individually whether the domain name is effectively used to describe the company holding and managing the website or just the website. Depending on the findings, both theories may prove correct.

 

Infringement of rights in a name

According to Swiss case law, the registration of a domain name by a person not entitled to do so may constitute an unlawful appropriation of a name and, thus, an infringement of the rights of the bearer of the name under article 29 paragraph 2 of the Swiss Civil Code (SCC). The bearer of the name will succeed in an action against such an appropriation if the use of the domain name is unauthorised and causes a wrong attribution (ie, the impression of a connection to the bearer of the name) or if the name-bearer’s interests worthy of protection are harmed (eg, if the bearer of the name is associated with website content that is considered immoral). Swiss court practice requires a similarity of the names at stake and a certain closeness to the bearer of the name’s field of activity (eg, if a website contains a widespread name, such as www.peter.ch, the website must contain more specific references to the particular name bearer called Peter and references to recognisable characteristics of his).

 

Infringement of unfair competition law

An infringement of unfair competition law always requires an act of competition in the course of trade, which may influence the competitive situation to the detriment of a competitor (article 2 of the Federal Act against Unfair Competition (FAUC)). Claims under the FAUC may be asserted in parallel with intellectual property or name rights claims. The majority of Swiss scholars opine that the applicability of intellectual property rights do not per se exclude an application of the FAUC. The main objects of unfair competition law are cases of:

  • obstructive competition (domain name grabbing and cybersquatting (ie, registration of domain names without legitimate interests to ransom payments)); or
  • the exploitation of a particularly notable aspect of a distinctive sign.

 

However, Swiss courts have also stated that the registration of domain names does not constitute an unfair act of competition per se. Domain names are, in principle, allocated on a first-come, first-served basis that corresponds with free-market principles (see, eg, FSC, 126 III 239 – berneroberland.ch and similar findings in the first instance of the commercial court of Berne, 14 August 1999).

Remedies

What remedies are available to a successful party in an infringement action?

Infringements of intellectual property rights, name rights and claims arising out of unfair competition law generally provide for injunctive relief claims, damage claims for damages incurred by the infringement and information claims concerning infringing goods and sales or purchases conducted.

Concerning injunctive relief claims, Swiss courts tend to order the transfer of disputed domain names to the claimant as this is considered more reasonable, whereas the cancellation of a domain name is often considered disproportionate (the domain name could be repurchased by anyone causing similar conflicts). Courts have also ordered the defendant to change the content displayed on a website hosted under the domain name (ie, to forbear from using infringing content on such a website), but without ordering a transfer or cancellation of the domain name (eg, an internationally accessed website with the gTLD .com with content infringing only Swiss intellectual property rights could be ordered to change content for Switzerland or make changes to avoid the confusion of the public instead of cancelling the whole domain name worldwide).

Injunctive relief

Is injunctive relief available, preliminarily or permanently, and in what circumstances and under what conditions?

Yes, preliminary injunctions are available in Switzerland for infringements of intellectual property rights, name rights and claims arising out of unfair competition law. To obtain a preliminary injunction, a petitioner must credibly show (a prima facie showing) that:

  • the respondent has infringed or is likely to infringe the petitioner’s patent rights; and
  • the petitioner is threatened by harm that cannot be easily remedied.

 

In cases of special urgency, and provided that the petitioner initiated the proceedings without undue delay, a court may order a preliminary injunction immediately and without hearing the opposing party first (an ex parte preliminary injunction); however, this is not easily granted in practice. The court may make the interim measure conditional on the payment of security by the petitioner if it is possible that the measures could cause loss or damage to the opposing party.

Concerning domain names, preliminary injunctive measures usually amount to having domain names blocked (the website hosted under the domain name can no longer be altered and the domain name account can no longer be assigned). A transfer or cancellation cannot be ordered in preliminary injunctive proceedings as these measures are irreversible.

Calculating damages

How is monetary relief calculated?

A plaintiff’s losses may encompass the actual damage suffered, lost profits and the surrender of any unjust enrichment deriving from the infringing act, all of which must be proven by the plaintiff, including the causality between the damage or lost profits and the infringement that occurred. The calculation of lost profits based on a reasonable royalty rate is permissible only if it may be assumed that the rights holder (intellectual property rights, name rights or unfair competition claims) would have realistically granted a licence to the infringer upon request. This will usually be the case only if the patentee can show that it granted non-exclusive licences to third parties and would have been willing to grant a licence to the infringer based on the same or similar terms.

Criminal remedies

What criminal remedies exist, if any?

Wilful infringement of intellectual property rights, name rights or unfair competition law principles is a criminal offence. Therefore, rights holders can also instigate criminal proceedings against an infringer. Criminal proceedings may be instigated by the state (ex officio) if the infringer acts commercially.

Limitation period

Is there a time frame within which an action must be initiated?

Claims for (definitive) injunctive relief may be brought to court as long as the infringing act persists or is likely to be repeated.

Claims for preliminary injunctive relief are less likely to be granted if a claimant has waited for too long as this indicates a lack of urgency of the matter.

Claims for damages based on intellectual property, name rights or unfair competition law claims are subject to the general statutory limitation period for tort claims of three years (article 60 of the Swiss Code of Obligations).

Expiry of rights and estoppel

Can a registrant’s rights in a domain name expire because of non-use? Can a registrant be estopped from bringing an infringement action? In what circumstances?

Since a domain name is not a right in law (but only a reservation of an internet address), a domain name does not per se expire by its non-use. A registry might, however, cancel a domain name registration if renewal fees are not paid (after a 30-day grace period).

If a registrant is a defendant in a domain name dispute, then the non-use of his or her domain name can be an indication that he or she may not have a legitimate interest in the registration. Thus, his or her non-use could be seen as proof of an obstructive competition behaviour or unfair exploitation of the famousness of a distinctive sign. Provided that the claimant demonstrates this unfair behaviour, he or she may obtain a court order to have the domain name assigned to him or her or cancelled.

If a domain name registrant is a claimant in a domain name dispute, he or she may allege own intellectual property rights, name rights or unfair competition law claims in general. However, the domain name itself is not a right in law. If the domain name coincides with the claimant’s rights, it may also become subject to a legal review of use; for example, if a trademark owner initiates trademark infringement proceedings in Switzerland, the counterparty may raise the defence that the trademark was not used, and the non-use of the domain name is tantamount to a lack of sufficient trademark use in Switzerland.

Generally, trademark owners are under an obligation to use their trademark in connection with the goods and services claimed under the trademark and non-use during five consecutive years (articles 11 and 12 of the Swiss Federal Act on Trademarks). Regarding the bearer of name rights, there is no particular use requirement or period for use applicable. The bearer of the name is the holder of his or her name rights as long as he or she lives. Concerning unfair competition law claims, there is no specific use requirement or period applicable, except that one must show the use of a particular sign in the market (distinctiveness in the market) if one wishes to base unfair competition law claims on it.

Finally, Swiss law provides for the general notion of estoppel if a rights holder does not assert his or her rights for a long time and the infringing party has relied on these conditions and was justified in assuming – according to the overall conduct of the rights holder – that the rights holder would no longer assert its rights (article 2 of the SCC). Estoppel will be considered only after a very long time and given all individual circumstances at hand (since it is an equity-based construct).

Time frame for actions

What is the typical time frame for an infringement action at first instance and on appeal?

ADR proceedings handled by the WIPO Arbitration and Mediation Center are usually completed within 60 days of the date the WIPO Center receives the complaint. The ADR proceedings are not binding and can still be brought to civil courts.

An action before a first instance civil court may take from three to 12 months to reach a decision (depending on whether the defendant files a reply and on the scope of evidence that needs to be taken). The duration of the proceedings before the second instance (the FSC), which normally takes from six to 12 months, also depends on these factors.

Case law

Is a case law overview available on procedural or substantive issues? Does the case law have a precedential value?

Courts are not bound by precedent, and precedent is conceived as an aid for interpretation only. Precedent will generally only be considered by Swiss courts if an upper court makes a fundamental ruling concerning the interpretation of statutory law or the courts have an established practice.

There is case law available concerning domain name disputes.

Appointment of panellists

Can parties choose a panellist in an ADR procedure involving a ccTLD? Can they oppose an appointment?

To help parties to a domain name dispute select appropriately qualified panellists, the WIPO Arbitration and Mediation Center has established a list of persons who have agreed to serve on the WIPO Domain Name Administrative Panels. The WIPO panellists come from different regions of the world and are well-reputed for their impartiality, sound judgement and experience as decision-makers, as well as their substantive experience in the areas of intellectual property law, electronic commerce and the internet. Each panellist’s professional profile has been made available. Some of these panellists also appear on the lists of other Internet Corporation for Assigned Names and Numbers-accredited dispute resolution service providers.

Costs

What is the typical range of costs associated with an infringement action, including pre-litigation procedures, trial or ADR, and appeal? Can these costs be recovered?

Costs of ADR proceedings with the WIPO

For ADR proceedings filed with the WIPO Center involving between one and five domain names to be decided by a single panellist, the fee is US$1,500. For a case to be decided by three panellists, the fee is US$4,000. For a case involving between six and 10 domain names to be decided by a single panellist, the fee is US$2,000 and US$5,000 for a case to be decided by three panellists. It is the parties that decide whether the case is to proceed before one or three panellists. The complainant is responsible for paying the total fees. The only time the respondent must share the fees is when the respondent chooses to have the case decided by three panellists and the complainant had chosen a single panellist.

The fees described above do not include any payments that might have to be made to a lawyer representing a party in the administrative proceeding.

 

Cost of pre-court actions

Before filing an action with the courts, the rights holder normally sends a cease-and-desist letter to the infringing party, notifying them of the infringement based on the registration or use of the rights holder’s rights and asking them to sign a declaration of forbearance. Further, lawyers would typically conduct a pre-assessment of the legal grounds. Costs involved for this type of law firm work may accrue between 4,000 to 10,000 Swiss francs.

 

Cost of court actions

Domain name-related litigation costs include court fees and expenses and attorneys’ fees.

If a litigant loses the lawsuit, it must bear the court fees and expenses and will be ordered to pay the prevailing party’s compensation for attorneys’ and patent attorneys’ fees. The courts determine the court fees and the adverse party’s attorneys’ fees based on a statutory tariff that is based on the estimated value of the dispute. Parties may also demand compensation for the reasonable actual legal costs incurred to pay their attorneys by furnishing proof of actual and reasonable costs. To take a case through to a first-instance decision, a litigant should reasonably expect lawyer’s costs accruing between 12,000 to 30,000 Swiss francs (depending on how much counteraction will occur by the other party).

Law stated date

Correct on

Give the date on which the information above is accurate.

5 February 2021.