Global Intellectual Property Client Alert January 2016 New Rules on Designations of Origin on Swiss Products and Services The Swiss Federal Council recently adopted a new set of rules on designations of origin on Swiss products and services (the "Swissness" criteria). The "Swissness" criteria prescribe how much "Switzerland" must be in a product or service so as to qualify as "Swiss". At present, the rules applying to designations of origin are unclear and do not protect the geographic indication "Switzerland" sufficiently. The new laws will be in force as of 1 January 2017; products manufactured under the old rules before this date may be sold until 31 December 2018 at the latest. Brand owners who use claims such as “made in Switzerland” “Swiss engineered” or other insignia suggesting that their goods or services originate from Switzerland (such a, e.g., the Swiss Cross or images of the Matterhorn) should make themselves familiar with the new law in order to avoid legal consequences. There are different "Swissness" criteria for natural products, foodstuffs, industrial products, and services: The origin of natural products depends on the type of product: meat is considered "Swiss" if the animal spent the preponderant part of its life in Switzerland; plant products must have been harvested in Switzerland; and other raw products must have been exploited in Switzerland. Foodstuffs not falling within the category of natural products may be designated as Swiss if 80% of the weight of raw materials used to produce the food are of Swiss origin. There is an exception for products containing milk, where 100% of the milk must originate from Switzerland. Raw materials which are not readily available in Switzerland, such as cacao, are disregarded in the calculation. In addition, the manufacturing step giving the foodstuff its defining characteristics must be completed in Switzerland. Industrial products (i.e., products not falling within one of the aforementioned categories) are considered "Swiss" if at least 60% of the manufacturing costs were incurred in Switzerland, including costs of raw materials, productionrelated wages and expenses for research and development. Marketing expenses are not considered manufacturing costs. As with foodstuffs, raw materials not available in Switzerland are disregarded in the calculation. In addition, a relevant manufacturing step must occur in Switzerland. Services may be advertised as "Swiss" if the service provider is seated in Switzerland and also has its principal place of business there. Under the new "Swissness" laws, all products fulfilling the aforementioned criteria are allowed to carry the Swiss Cross (but not the Swiss coat of arms, which may only be used by the Swiss Confederation). Under the old law, only services could be advertised with the Swiss Cross. For further information please contact: Eva-Maria Strobel Partner + 41 44 384 13 08 Eva-Maria.Strobel@bakermckenzie.com Dr. Michael Treis Partner + 41 44 384 12 16 Michael.Treis@bakermckenzie.com 2 Intellectual Property Client Alert January 2016 Further to the new "Swissness" criteria, a new register for geographic indications of non-agricultural products will be introduced. Previously, only geographic indications for agricultural products could be registered and protected. Additionally, it will now be possible for bodies representing a particular industry to register so-called "geographical trademarks" (theoretical example: "Watches of Geneva"). Geographical trademarks are similar to collective trademarks and will allow anyone fulfilling the criteria prescribed by the trademark applicant to use the geographical trademark for free. Finally, the new laws will introduce stricter penalties for violations of the "Swissness" rules and strengthen the position of the Swiss Institute of Intellectual Property in enforcement procedures. As of 2017, the Swiss Institute of Intellectual Property will be able to file criminal complaints against persons using an incorrect designation of origin and will also enjoy party rights in such proceedings. Through these reforms, the brand "Switzerland" shall enjoy better protection abroad. Baker & McKenzie International is a Swiss Verein with member law firms around the world. In accordance with the common terminology used in professional service organizations, reference to a "partner" means a person who is a partner, or equivalent, in such a law firm. Similarly, reference to an "office" means an office of any such law firm. This may qualify as "Attorney Advertising" requiring notice in some jurisdictions. Prior results do not guarantee a similar outcome.