Disputes Insights #6: Are companies domiciled in Switzerland allowed to use "Swiss" in their company name? A brand-new important judgment sets clear limits

The Case

The Swiss Federal Institute for Intellectual Property (IPI) has won its first Court case based on the so-called Swissness legislation. A company domiciled in Switzerland has been ordered by the Commercial Court of the Canton of Berne to cancel within three months the word "Swiss" from its company name BDSwiss AG as well as to stop the use of the white Cross on red ground in its logo.

BDSwiss AG is domiciled in Zug and engages in financial services on a worldwide scale. It turned out that BDSwiss AG is a company managed from Cyprus and addressing customers mainly in Germany. The company was unable to prove in Court that its business activities in Zug were more than just emptying the mailbox. In such a case the origin of the services offered is not Switzerland and, therefore, the use of the word "Swiss" and the Swiss cross is misleading and against the law.

The Law

The Swiss Trademark Act (TA) prohibits the misleading use of indications of origin. An indication of origin can be any word, sign, picture or other indication that refers to the origin of a product or a service. While the provisions addressing products are rather detailed, this is not the case regarding the provisions addressing services. Because of this the referenced decision is also of interest.

The origin of services is the place where the person rendering such services is factually working, and, at the same time, the management of this person must be in the same country. If a company renders the services, such a company must comply with both requirements. In case of a group of companies, things become more complicated: If the indication of origin refers to the mother company's domicile and the mother company is rendering the services and such mother company or a daughter company domiciled in the same country factually manages the mother company, the indication of origin is lawful. In addition, such an indication of origin can also be used for similar services rendered by the other daughter companies domiciled in any country.

In the case decided by the Court, the mother company of BDSwiss AG was domiciled in Cyprus and seems to have managed the Swiss company. In any case, the Court established that the Swiss company did not render any services at its domicile in Zug. In such a case the domicile of a company in Switzerland is not sufficient to make use of any indication of origin referring to Switzerland.

The Claimant

Claimant in the referenced Court case was the Swiss Federal Institute for Intellectual Property (IPI). According to the TA, the IPI has standing to file civil and criminal complaints because of the violation of the Swissness legislation. The intent behind this provision is that it is a public task to prevent the misuse of words and signs referring to Switzerland and also that it is unlikely that a competitor files a lawsuit because of such an unlawful behavior. The IPI has established a special task force to handle such cases. According to the IPI, it intervenes in an average of 370 cases per year. Hence, persons and companies making use of words such as "Swiss" or "Switzerland" or making use of signs such as the Swiss cross or another sign referring to Switzerland, must be aware that the IPI does not tolerate such misleading indications of origin and intervenes against such behavior.

Conclusion

Companies doing business in Switzerland must be aware of the Swissness legislation. If they refer to Switzerland by word, sign or picture to Switzerland, be it in their company name or in connection with their services or products, they must comply with the respective requirements. The Swiss authorities do not accept misleading and other unlawful indications of origin and are prepared to take action against such indications.