Report of Swiss Group

Questions

The term “genuine use” is not defined under Swiss substantive trademark law and has therefore no specific meaning. On the other hand it is a recognized concept under Swiss law that the validity of a mark must be maintained by use. Interestingly, the Swiss Trademark Act (“TMA”) only provides for very few concrete parameters as regarding the kind of use which is required and regarded as sufficient to maintain the rights that vest in a registered mark. Thus, the concrete parameters of quality or degree of use were developed by Swiss scholars and jurisprudence over the years and resulted in the doctrine of “rechtserhaltender Gebrauch” or “use maintaining the mark”. The requirement of “genuine use” (or rather “serious use” as referred to in Swiss jurisprudence) is only one element of the above doctrine. Thus, any reference to the term “genuine use” in this paper must be understood in the broad framework of the Swiss doctrine of “use maintaining the mark” as further explained in reply to the questions below.

In this sense, according to Article 11 Paragraph 1 of the TMA “a trademark shall enjoy protection to the extent that it is used in connection with the goods and services for which it is claimed.” This means that genuine use is, in fact, a requirement for maintaining protection in Switzerland, but, in a strict sense, it is not a statutory duty, but only an incidental obligation (the nonfulfilment of which may be of detriment in relation to third parties but will not expose the trademark owner to automatic legal consequences: K. Bürgi Locatelli, Der rechtserhaltende Markengebrauch in der Schweiz, Bern 2008, 2 f.).

What is the purpose of requiring genuine use? Is it to keep the register uncluttered and to thereby allow for new proprietors to make use of a “limited” supply of possible marks? Is the purpose of requiring genuine use to protect consumers from confusion as to the source of origin of the goods or services? Or are there multiple purposes?

Swiss literature usually points to three important purposes of requiring genuine use:

• – First, such requirement is necessary in order to have trademarks cancelled that are formally registered but not in use after a reasonable grace period (e.g. trademarks with a wide scope of protection for which use was originally intended, but that are, eventually, not or only partially used) and, as a consequence, unjustifiably block competitors who wish to enter the market with new signs (L. David, Markenschutzgesetz, Muster- und Modellgesetz, 2. Aufl., Basel 1999, MSchG 11 N 1; Ch. Willi, Markenschutzgesetz, Zürich 2001, MSchG 11 N 1; E. Marbach, SIWR III/1, Bern 2009, N 1265 f.; E. Meier, L’obligation d’usage en droit des marques, Genf 2005, 7 ff.; Bürgi Locatelli, 1).

• – Second, in line with this reasoning, Swiss literature also points out that requiring genuine use is necessary to ensure that trademarks fulfill their core legal purpose – which is to distinguish goods and/or services of one enterprise from those of other enterprises in the marketplace – and are not put on file for merely defensive and/or obstructive ends which would not justify granting monopoly rights either (Willi, MSchG1N1; Meier, 8 f.; Marbach, N 1287).

• – Finally, trying to reduce the number of trademarks and trademark conflicts is not often cited in Swiss literature as one of the main purposes of requiring genuine use, but may also be considered in this context as a desired side effect (Meier, 10 f.).

According to the definitions used by Swiss courts and scholars, genuine use requires a use of the trademark (1) as a mark; (2) in connection with the goods and services claimed; (3) in trade; (4) in or for export from Switzerland; (5) and that, considering the usual and commercially reasonable practices in the sector concerned, can be regarded as genuine use (See, e.g. SFAC of 30 May 2008, No. B2683/2007, consid. 5.1, “Solvay/Solvexx”).

Yes, only the use of the trademark “as a mark” suffices for maintaining protection. Required in this respect is the use of the trademark on or in connection with the goods and services for which it is claimed. Decisive is that the mark is used in a manner in which the consumers recognise it as a distinctive reference to specific goods or services (BGer of 14 Octobre 2008, No. 4A.253/2008, consid. 2.1, “Gallup”).

Use of the trademark as a business or company name is not sufficient in this respect (BGer of 25 September 2008, No. 4A.309/2008, consid. 6.1, “Eva Astrologia”; BGE 88 II 32 ff., “Au Bûcheron”). To which extent use on the Internet can be considered as use “as a mark” is not entirely clear. While it appears acknowledged that a clearly product related use of the mark on an Internet website suffices, it is unlikely that the use as an Internet domain name (irrespective of the contents of the related website) does.

Whether the use of a mark in merchandising constitutes genuine use for the original products has not yet been conclusively decided by the Swiss courts. However, Swiss doctrine tends to acknowledge such a use as use “as a mark”, since also in such cases consumers usually perceive the mark not only as a decorative element or a reference to the character or event represented by the mark, but also as a sign distinguishing the marked products from others.

The degree of use required for maintaining trademark protection is not defined by the TMA. As a general rule the necessary degree of use shall allow to differentiate between genuine use which maintains trademark protection and token use which is not sufficient for maintaining protection; however, minimal use is sufficient (BGE 81 II 287, “Kompass”). In practice a higher degree of use is required for consumer goods and mass products than for luxury goods and customized products.

According to the long standing case law of the Federal Supreme Court already a marginal turnover is sufficient for maintaining protection if the trademark owner has the genuine will to satisfy each demand of the market (BGE 102 II 111, “Silva II”). Thus, genuine use was accepted by the Federal Supreme Court in the following cases:

• – delivery of three refrigerators within one year (BGE 60 II 164, “Frigomax“; decision of 1934);

• – sale of 21 reference books with limited circle of potential buyers within three years (BGE 81 II 287, “Kompass”; decision of 1955);

• – one single delivery of 24 bottles of port wine within three years (BGE 102 II 111, “Silva II“; decision of 1976).

In contrast to case law of the Federal Supreme Court dating back to the 1970s, the latest case law of the Swiss Federal Appellate Commission of Intellectual Property (the so called “REKO” which later became the Swiss Federal Administrative Court, “SFAC”) seems to demand a higher degree of market cultivation for the distinction between genuine and token use, although these decisions refer to administrative opposition proceedings where already prima facie evidence of use is sufficient. In recent years genuine use was denied in the following cases:

• – sale of 115 bottles of white wine within one year (REKO of 15 May 2000, sic! 2001, 427, “Heidi/Heidi-Wii”);

• – delivery of 14 low-ranged clothes on the basis of five orders (REKO of 26 October 2001, sic! 2002, 53, “Express/Express Clothing”);

• – sale of two or eventually four middle-ranged watches within three years (REKO of 17 September 2003, sic! 2004, 106, “Seiko Rivoli/R Rivoli”);

• – presentation of three relevant accounts of EUR 202.95, 145.49 and 103.67 (REKO of 20 June 2005, sic! 2005, 759, “Proline/Profiline Berufsbekleidung”);

• – insurance of 13 or 8 external employees by pension fund (REKO of 14 December 2005, sic! 2006, 180, “Integra/Ökk Integra”);

• – three deliveries of bread and flour to a single employee within 5 years (REKO of 2 November 2005, sic!, 2006, 183, “Banette/Panetta”);

• – single use of a trademark for the first issue of a socker magazine of 800 copies (REKO of 24 May 2006, sic! 2007, 41, “Okay/Okay”).

However, genuine use was accepted in the following cases:

• – a quarterly periodical of 5000 copies within two years (REKO of 24 May 2004, sic! 2004, 783, “IP/IP Services”);

• – sale of 3260 middle ranged ties within five years (SFAC of 19 December 2007, sic! 2008, 366 ff., consid. 5.4, “Diva Cravatte/DD DIVO DIVA”);

• – sale of 2000 postcards per year; however, question not decided whether 145 postcards per year are already sufficient (SFAC of 10 February 2011).

In ordinary proceedings genuine use was denied by the Commercial Court of the Canton of Berne with regard to the sale of 800 cans of energy drinks within 4 years in various shops (Commercial Court of the Canton of Berne of 10 July 2009, “Formula One Licensing B.V/Infra Metal Establishment“). In this decision the Commercial Court of the Canton of Berne confirmed that a minimal degree of use is sufficient, whereby the market cultivation has to be strong enough to gain (additional) market share for a new product or to maintain a certain market presence for established products. The mere possibility of ordering a product online and the will to supply Switzerland is not sufficient to prove genuine use. Furthermore, the market cultivation must be continuous; sporadic sales of products which typically are on stock do not constitute genuine use. Preparatory acts as such are considered genuine use provided that sales activities follow; preparatory acts are the production of identification tags, commercial materials, packaging, market analysis, test sales and the distribution of samples.

However, even the simplest of measures which can be expected of the weakest market participants shall be considered genuine use. As a general rule the Commercial Court of the Canton of Berne referred to the customary practise within an industry of commercially reasonable dealing.

In summary, according to Swiss case law the competent authority shall consider information submitted to it with respect to all factors from which it may be inferred that the trademark is, or is not, genuinely used, including, but not limited to, information concerning the following:

• – the duration, extent and geographical area of use of the trademark;

• – the kind and time of use of the trademark (preparatory acts followed by sales activities);

• – the kind of the goods and/or services (consumer goods/mass products or luxury goods/customized products);

• –  the actual and/or potential consumers of the type of goods and/or services to which the trademark applies;

• – the structure and the size of a company;

• – the scope (the field and area of activity) of the company and/or the goods and/or services.

Yes, use in the course of trade is required. However, course of trade is understood in a very broad sense and does also include activities that are not directed to achieve a commercial profit. Thus, use by non profit-organisations may constitute genuine use. The same applies for use of free promotional goods (i.e. “give-aways”) provided to purchasers of other goods of the trademark owner (the discussion of genuine use of a mark via use of the mark on ancillary goods as such is not discussed here). It is, however, essential that the mark is used outside the sphere of the owner of the trademark. Mere intracompany or -group use does therefore not constitute genuine use.

To which extent use in the framework of activities in preparation of the market introduction of the related product qualifies as genuine use is not entirely clear under Swiss law. However, according to the majority of Swiss doctrine, preparatory use on the market, such as use in form of test marketing (test sales, distribution of samples), constitutes genuine use, at least in those cases in which ordinary sales follow such activities. Use in the framework of clinical trials does presumably not qualify as genuine, but as mere internal, preparatory use.

According to the literature (Willi, MSchG 11 N 31; David, MSchG 11 N 18; M. Noth/G. Bühler/F. Thouvenin (Hg.), Markenschutzgesetz, Bern 2009, MSchG 11 N 50 ff.) and a Federal Supreme Court decision (BGE 102 II 111 ff.) use of a trademark in only one town can be sufficient. The Federal Supreme Court stated in this decision that use of the mark in question in Berne only was to be considered sufficient. Deducted from this decision, it can clearly be said that use of the mark in only a part of the country (be it a state of a confederation or only in one place) is definitively sufficient for the mark to remain legally valid.

In Switzerland, there is one exception to the principle of territoriality of trademark use: the “German-Swiss treaty regarding the reciprocal Patent, Design and Trademark Protection of 13 April 1892” (SR 0.232.149.136) which states in its article 5 that trademark owners originating from or having an effective commercial establishment in one of the two countries who own registrations in both territories may use the trademark in only one of the two territories and thus can rely on such use in the other country.

Is use only in relation to goods to be exported sufficient?

Art. 11 Paragraph 2 TMA states that use of a trademark on goods which are exported constitutes use sufficient to maintain the mark in question in Switzerland (BVGer, sic! 2008, 638 ff. “K. Swiss vs. K Swiss” and BVGer B-4540/2007, “Streifen vs. Streifen”).

Is use in duty free zones considered to be genuine use?

Duty free zones enjoy a special treatment regarding custom duties. Apart from that, these zones are under Swiss territorial sovereignty, thus, use of mark in the territory of Switzerland is given if use takes place in a duty free zone.

According to the TMA, use in a “nonessentially deviating” form is sufficient (Art. 11 para. 2 TMA). The Federal Supreme Court stated, based on this as well as on international and EU regulations, that a deviation of use is essential if the relevant circles of consumers do not recognize the same sign anymore because its “distinctive core”, considered in an overall impression of the used form, has lost its identity (BGE 130 III 267, 272 consid. 2.4, “Tripp Trapp”).

Swiss case law to that question can be divided into four groups:

(1) The first group encompasses problems of concretizing trademarks which are registered in a merely abstract form. No essential change was found, e.g., when a word mark was concretized in black and red lower standard characters, when a black trademark registration was used in multiple colours or written inversely with a white writing on black background, when a registered laminar pattern was used in parts around another logo or when graphic drawings were used in slightly different proportions and angles (SFAC, sic! 2008, 37, consid. 4.1, “Kinder/Kinder Party”; SFAC, sic! 2009, 524, consid. 2, “Hirsch/Hirsch”; SFAC of 27 November 2007, B-4536/2007, consid. 3.3, “Salamander”; Tribunal of Commerce of Berne, sic! 2007, 633, consid. 4.c/bb, “Vichy-Karomuster”; SFAC of 15 July 2010, B-5830/2009, consid. 3.2.3, 5 “stripes”; SFAC of 31 March 2010, B-5732/2009, consid. 7.2.1–3, “Longines/Aviator”). The distinctive core of the trademark was altered, on the other hand, when different words of the trademark were used separately on the same good, but arranged in a way that does not make them appear as one sign any longer (BGE 130 III 267, 274, consid. 2.4, “Tripp Trapp”; REKO, sic! 2004, 107, consid. 5, “Seiko Rivoli/R Rivoli”).

(2) The second group is formed by problems of concretely registered but later modernized trademarks (“redesign”). No essential deviation from the registration is made, according to Swiss authorities, by a slightly modernized graphic and writing instead of an outdated one, even if words have been registered in crisscross sequence and are used in line, as long as the general impression remains the same (Commercial Court of Zurich, sic! 2004, 872, consid. 2.2.b, “Johanniter”; SFAC of 27 November 2007, B-4536/2007, consid. 3.3, “Salamander”). However, the graphic impression essentially changes, e.g., if a squiggled old writing is replaced by differently arranged words in modern characters, if important word parts are reformulated or if parts of a describing, originally weak graphic are used in colour while others remain black and the mark is placed above three words so that the overall impression has changed (SFAC of 22 April 2010, B-580/2010, consid. 5.1.2, “Jean Marie Farina”; SFAC, sic! 2008, 222, “Rudolph Rotnase”; Civil Court of Basel, sic! 2008, 359, “A.Braun/Braunpat”; SFAC of 25 June 2009, B-576/2009, consid. 8.2.3-4, “Doppelhelix”).

(3) Omitted parts of registered trademarks are considered essential, especially if figurative trademarks are used only as a word without the included picture (BGE 130 III 267 ff., consid. 2.4, “Tripp Trapp”; SFAC, sic! 2008, 221, consid. 7.2, “Exit/Exit One”; Commercial Court of Berne of 18 March 2008, HG 0734, consid. 17–18, “Rob Electronic”). To suppress a registered word is, in general, detrimental (SFAC of 14 February 2008, B-1755/2007, consid. 7.2.2) but can be accepted for describing parts in exceptional cases (SFAC of 19 December 2007, B-7500/2006, consid. 5.3.2, “Diva Cravatte”).

(4) Contrariwise, an element which was added to a trademark was tolerated in most cases (SFAC, sic! 2003, 908, consid. 2, “Kiss/Soft-Kiss”; SFAC, sic! 2006, 274, consid. 8, “Dona/Donafor”; SFAC, sic! 2004, 421, consid. 3.2, “Sopinae/Sobranie”; SFAC, sic! 2009, 528, consid. 6.2, “Hirsch/Hirsch”; SFAC, B-4536/2007, consid. 3.2, “Salamander”; SFAR of 31 March 2010, B-5732/2009, consid. 7.2.1, “Longines/Aviator”; SFAC of 19 July 2010, B-892/2009, consid. 5.2, “Heidiland/Heidi-Alpen”; SFAC of 10 February 2011, B-3686/2010, consid. 5.2.2, “Heidiland/Heidi Best of Switzerland”; SFAC of 30 May 2008, B-2683/2007, consid. 4.5, “Solvay/Solvexx”). It only qualified as an essential change if the registered trademark was found to be weak (Federal Supreme Court, SMI 1990/1, 109, consid. 2b “Aroma”; Civil Court of Basel, sic! 2008, 359, consid. 3.2.3, “A. Braun/Braunpat”; SFAC of 18 October 2007, B-7508/2006, consid. 9, “Ice/Ice Cream”; SFAC of 25 June 2009, B-576/2009, consid. 8.2.3, “Doppelhelix”) or if the combined use led to an altered sense of the sign because the new wording was understood, e.g., as distinguishing an enterprise from other enterprises instead of distinguishing goods or services (SFAC, sic! 2005, 755, consid. 5, “Gabel/Kabel 1”; SFAC, sic! 2001, 428, consid. 3.3 “Heidi/Heidi-Wii”; SFAC, sic! 2004, 870, consid. 7, “Globex/Globix”; SFAC, sic! 2004, 930, consid. 5, “Marconi/Marconi”; SFAC B-3686/2010 of 10 February 2011, consid. 6.4, “Heidiland/Heidi Best of Switzerland”) or as forming part of a content description like as a book title (Federal Supreme Court of14October2008, 4A_253/2008, consid. 2.2, “Gallup”). No essential deviation was found, in general, in the common practice to split up multipart combined brands and to have registered each element separately, even if a trademark is only used in combination with a more conspicuous element, e.g. a separately registered word mark (SFAC, sic! 2009, 527, consid. 5.4 f., “Hirsch/Hirsch”).

To sum up, genuine use allows a certain degree of changes like modernizing and added elements as long as the trademark as such is recognized. However, a substantive difference between the sign actually used and mark originally registered is not any longer genuine use.

The effect of maintaining rights is always limited to the goods and services actually offered and sold on the market, so that partial use does not automatically have the effect of maintaining rights for all the other products listed in a specific list of goods and services (BGE 91 II 4 consid. 2; M. Wang, Handkommentar MSchG 11 N 27; Willi, MSchG 11 N 41). A comparable rule applies to similar goods: the use of a mark for cheese is also genuine use for dairy products but not eggs or milk, although listed in the same class (Commercial Court Berne, sic! 2007, 632 ff.; Wang, MSchG 11 N 29).

As regarding the headings of the Nice Classification, the use of a specific product of a certain class does not automatically qualify as genuine use of all goods that may fall under the relevant class heading. Rather, a case-bycase assessment must be made of the extent to which the relevant consumer group attributes products falling under a certain class heading to the owner of the mark in the sense of a logical range of products (Commercial Court Bern, sic! 2007, 632 ff.; Marbach, SIWR III/1, N 1387; Willi, MSchG 11 N 42; Wang, MSchG 11 N 33 ff.; for a different view, see David, MSchG 11 N 7; differing opinion: Meier, 89 ff.; for a different view, see Bürgi Locatelli, 27 ff.). This requirement is not met in particular where several types of products – that are by their nature different – are allocated under the relevant class heading (e.g. prams, pushchairs and automotive cars under the class heading of “vehicles” in class 12).

What if the mark is used in respect of ingredients and spare parts or after sales services and repairs, rather than registered goods and services?

The extent to which a trademark must be noticed and taken into account by a consumer before the decision to buy is not entirely clear in practice and is disputed in doctrine. It is argued for example that a trademark must be noticed before the conclusion of a transaction in order to qualify as genuine use (David, MSchG 11 N 6; Willi, MSchG 11 N 19). This argument is countered by the assertion that even trademarks that are noticed after the purchase can have an effect on future purchases or when making a recommendation to others and are therefore genuinely used (Marbach, N 1323; Wang, MSchG 11 N 16, with additional references). The Federal Supreme Court appears to have accepted the latter argument, although the relevant judgment does not relate to the use of a trademark, but to product packaging subsequently provided that carried misleading designations of origin (so-called post sale confusion: BGer of 22 February 2006, 4C.361/2005, consid. 3.9.2).

A trademark must always be used in a functional relationship with the claimed goods or services. This also applies to spare parts and ingredients. In order for use within the overall product to have the effect of maintaining rights, a spare part or ingredient with its own mark within the overall product must therefore have a recognizable self-contained function (e.g. the processor within a PC, “Intel inside”) in the mind of the relevant consumer group (BGE 83 II 467 consid. 4b). In addition the mark for the spare part or ingredient must be used in such a way that the relevant consumer group can attribute the mark to the spare part or ingredient in question (Wang, MSchG 11 N 16; Willi, MSchG 11 N 45).

Conversely, the use of the mark applicable to the overall product for spare parts and ingredients can also have the effect of maintaining rights. By analogy, however, this requires the spare part or ingredient to be an independent economic asset and the mark for the overall product to be used in such a way that that the relevant consumer group regards it as an identification mark for the spare part or ingredient in question (BGE 60 II 161 consid. 2; Willi, MSchG 11 N 45; Wang, MSchG 11 N 45).

The standard of evidence to prove genuine use of a trademark and the allocation of the burden of such proof are subject to different regulation depending on whether the issue arises in an opposition proceeding or an ordinary court proceeding. According to the TMA, the party being confronted with the claim of non-use of a trademark in an opposition proceeding must provide prima facie evidence, but not prove, either as regarding the use of the trademark or in regards to the good cause for the non-use of it (art. 32 TMA). In contrast, in an ordinary proceeding, the party claiming non-use of a trademark must only assert its claim on a prima facie basis while the trademark owner has the burden of proof to establish all necessary elements of owner genuine use of the mark in question (art. 12 para. 3 TMA). Due to the milder standard of evidence in the opposition proceedings, the opposing party must only argue with objective circumstances in order to make the use of the mark plausible.

The Swiss Administrative Procedure Act and the Swiss Civil Procedure Act determine the general range of admissible evidence: documents, inspection, expert opinion, written statements or interrogation and deposition of the parties (Art. 12 Swiss Administrative Procedure Act [VwVG]; art. 168 Swiss Civil Procedure Act). The hearing of witnesses is only possible before court, not with the Federal Institute of Intellectual Property (See art. 14 para. 1 lit. c VwVG; SFAC of 19 July 2010, decision B-892/2009). With respect to the proof of genuine use of trademarks, in practice the following items are considered as valid means of evidence by all courts as well as by the Institute: documentary evidence such as delivery notes or invoices, samples of the product itself or of product packaging, labels, sales brochures, catalogues or other advertising material (Bürgi Locatelli, 191; SFAC of 10 February 2011, decision B-3686/2010). The courts, however, require a certain benchmark to be met for the submitted evidence. Invoices, for example, must be of a certain amount in order to qualify as evidence (REKO of 20 June 2005, “Proline (fig.)/Profiline Berufsbekleidung [fig.]”) and with respect to packaging models, one single sample of such is not deemed to be sufficient to prove genuine use of a mark (REKO of 17 October 2006, “ReBalance/Balance [fig.]”). With regard to sales figures, they do not qualify as evidence for the proof of genuine use as long as they are solely company-internal figures, and not externally audited. They will thus be considered in the proceeding only as an argument of the party and not as evidence (REKO of 17 October 2006, “ReBalance/Balance [fig.]”). Survey evidence is not required and is not common practice.

The range of acceptable specimens for proving genuine use is naturally wider for goods than for services. When proving the use of a mark for services, the trademark owner is often reliant on implemental items as evidence. In a very recent case, for example, the SFAC allowed for license agreements to qualify as evidence for showing credibly the genuine use of the mark (SFAC of 10 February 2011, decision B-3686/2010).

For all of the evidence, it is essential that they derive from the relevant five-year-period. Therefore, the courts require the date of the evidence to be apparent either by virtue of a date on the evidence itself or according to the circumstances (E.g. SFAC of 20 August 2007, B-7449/2006).

According to Art. 12 para. 1 in combination with Art. 32 TMA, the registration may be cancelled for non-use only if no valid reasons for non-use can be shown. Such valid reasons must be based on the existence of obstacles to use of the trademark.

According to Art. 12 para.1 the grace period starts to run after the opposition period has expired without an opposition being filed, or an opposition procedure has ended in favour of the trademark registrant. Thus the running of the opposition period or an opposition procedure justify non-use by the trademark owner (or his/her licensee).

What constitutes a proper reason for non-use?

Circumstances arising independently of the will of the owner of the trademark which constitute an obstacle to the use of the trademark, such as import restrictions on or other government requirements for goods or services protected by the trademark, are recognized as valid reasons for non-use (cf. TRIPS Art. 19 para. 1). The reasons must be totally outside of the scope of control of the trademark owner, such as unexpected sudden events, events of force majeure and acts of god, such as the expropriation of a production facility abroad (BGE 83 II 312, “Koh-i-noor”), natural catastrophes, war, riots, boycott, import bans because of the outbreak of a disease, impossibility to distribute a product in Switzerland before completion of the public homologation and admission procedure, but not technical or economic difficulties that were predictable, which cannot be invoked. E.g., a state monopoly that limits the possibilities of private sales of a particular product in Switzerland, and prohibitive import duties, do not excuse a non-use, at least not if they could have been foreseen by the trademark owner (RKGE, sic! 1998, 406, “Anchor/Ancora”).

Also imminent or pending legal procedures between private parties may justify non-use. In particular a pending action against the validity or use of a trademark may justify non-use (Thouvenin, sic! 2003, 598).

Under the Madrid Agreement, the attack by a legal procedure against the foreign basis trademark (central attack) leads to a general postponement of the beginning of the grade period in Switzerland (if extension to Switzerland has been sought) until such procedure has been validly terminated. This is because, as long as the international registration with extension for Switzerland depends on the foreign basis mark (Art. 6 para. 3 MMA), whose cancellation in a pending procedure is possible totally independent of the will of the trademark owner, its owner cannot be expected to use it. Thus a foreign procedure for cancellation of the basis trademark is a valid reason for non-use of the Swiss trademark (BGE 130 III 371, “Color Focus/Focus”; BVGer B-3578/2007, consid. 3, “Focus/Pure Focus”). Whether the same legal consequences apply under the MMP has not been decided yet, but there are arguments that the situation would be different because of the possibility to convert an international extension into a national registration in case of a successful central attack (Art. 9^quinquies MMP).

It is open whether a procedure instituted by the trademark owner may justify non-use. There are good reasons for saying that a plaintiff, which starts a suit for infringement of its trademark rights during the grace period is not required to start use before the end of the grace period although the infringement period has not been terminated when the grace period ends (Thouvenin, sic! 2003, 593 ff.). In any case, delays in instituting or terminating a procedure against the trademark owner that were caused by the trademark owner do not lead to an extension of the period during which nonuse is justified (BGE 100 II 230 ff., “Mirocor/Micronor”).

If the non-use is excusable, is there a maximum time limit? If so, is the time limit dependant upon the nature of the excuse?

Generally speaking, there is no maximum time limit for excused non-use. Of course the valid reason justifies non-use only as long as it exists. After completion of the public homologation and admission procedure, the grace period starts immediately, even if the build-up of sales for practical reasons may take additional time.

Under the MMA, a Swiss trademark becomes independent of the basis trademark if this trademark has not lost protection during the 5 year period of Art. 6 para. 2 MMA (or loses protection after the end of that period on the basis of a court action pending before the expiry of that period, but not an opposition proceeding, which is mentioned in the parallel provision of the MMP but not in the MMA. Thus in case of an opposition procedure against the basis trademark (central attack) under the MMA, the postponement of the beginning of the grace period ends the latest when the 5 year period of Art. 6 para. 2 MMA expires, since under the MMA, an opposition then pending does no longer carry the risk of causing a loss of protection in all countries of extension of the international registration (sic! 2008, 896, “Focus II”) (differing opinion L. David, AJP 2004, 1269).

A cease-and-desist letter cannot excuse a lasting non-use, since the trademark owner can be expected to clear the situation (by way of a action for a negative declaratory judgment [negative Feststellungsklage].

Swiss law has a grace period of 5 years. If the owner of the trademark has failed to use the mark in connection with the goods or services for which it is claimed for an uninterrupted period of five years after the deadline for opposition has expired without opposition being filed or after conclusion of the opposition proceedings, he may no longer assert his trademark rights in accordance with Art. 12 para. 1 TMA.

The same rule applies per analogy as far as the mark was originally used but use is later temporarily given up. Under these circumstances, the “clock starts to tick again” – the owner has five years after to take up genuine use again in order to avoid that the mark is vulnerable to cancellation.

An exception to the general rule of Art. 12 para. 1 of the Trademark Protection Act applies if the there is good cause for non-use in accordance with Art. 5 lit. c para. 1 of the Paris Convention and Art. 19 para. 1 of TRIPS.

In order to raise the defense of non-use it is sufficient that the third party asserting non-use sends a formal letter to the trademark owner confirming that there is no use or no genuine use of the mark in question. This formal reservation puts the burden of proof on the trademark owner’s shoulders: it is now the question if genuine use can be proved by the owner for the period of five years before the formal reservation was received.

According to Art. 11 para. 3 Trademark Act, use of the trademark with the consent of the owner shall be deemed use by the owner. Basically, consent is given in particular in license or distribution agreements (BGE 107 II 356 ff.). In general opinion, even implicit consent (e.g. between affiliated companies) is sufficient (BVGer, sic! 2008, 638 f.; BVGer of 10 February 2011, B-3686/2010, consid. 3.2; David, MSchG 11 N 23; Wang, MSchG 11 N 104; Marbach, N 1398). In any event, consent has to be given prior to use (Marbach, N 1400; Wang, MSchG 11 N 103; Meier, 97; Bürgi Locatelli, 86).

However, there is genuine use of the trademark only, if it is used by the licensee or distributor as a trademark of the owner (“Fremdbenutzungswillen”; BVGer, sic! 2008, 638 f.; HG BE, sic! 2008, 901, 904; Wang, MSchG 11 N 107; Meier, 98; Bürgi-Locatelli, 92; Willi, MSchG 11 N 60).

If so, does the license have to be registered?

No, there is no need to record the license.

If so, are there any requirements to be met by the trademark holder (the licensor) to maintain the trademark (e.g. quality controls, inspections or retaining a contractual right to control or inspect)?

According to the Swiss Trademark Act previously in force, requirements of quality had to be met (BGE 116 II 463 ff.). The current TMA recognises, however, that trademarks can be assigned or licensed without corresponding business establishment. Consequently, it is in the owner’s discretion whether or not to give its consent only if quality requirements are met.

It must be noted that Swiss law has no ex officio cancellation process: Thus, any challenge of the validity of a mark based on use is always depending on a respective action or defence initiated by a third party plaintiff or defendant.

Therefore, Art. 12 para. 1. TMA sets forth: “If the owner of a trademark has not used the trademark in connection with goods or services claimed for an uninterrupted period of five years following the expiry of the opposition period or after termination of opposition proceedings, he may no longer assert his rights in the trademark, unless there are important reasons for nonuse.”

As long as the grace period has not lapsed, there are no consequences if the trademark has not been used. After that period (unless important reasons for non-use exist), the trademark owner may on one side no more proceed against third parties which are invoking non-use of his trademark. On the other side, the trademark owner bears the risk of his trademark being challenged and cancelled by third party.

Who may apply for a cancellation and in what circumstances?

According to Art. 52 TMA, anyone proving a legal interest may introduce a cancellation action and request to declare a trademark null and void. Such interest is already given if the plaintiff is concerned in his economic activity (BGE 103 II 342). However, more recent jurisprudence tends to accept any legally relevant interest in the broadest sense to challenge the validity of a mark under the aspects of use (BGE 130 III 267, “Tripp Trap”; BGer 4A_324/2009, “Gotthard”). In civil proceedings, a defendant may either put forward the defense of non-use or even counter-claim – with a cancellation action – non-use of the trademark in question (see BGer of 29 October 2010, 4A_371/2010). If successful, this leads to a cancellation of the trademark.

Is a defendant in opposition proceedings entitled to challenge the opponent and demand proof of genuine use of the earlier mark? If so, under what circumstances?

Yes. A defendant is entitled to challenge the trademark of the opponent if (a) he challenges the use in the first submission and (b) the five year period has lapsed. In such a case, the Trademarks Office requires the opponent to either submit prima facie evidence of use or bring forward important grounds of non-use. If he fails to do so, the opposition will be dismissed.

Art. 12 para. 2 TMA states that if the use of a trademark starts or is being resumed, the rights in the trademark are restored with effect from the original priority date, provided that no one challenged the use of the trademark before. Therefore, if the trademark is challenged after taking up use again, the trademark will be safe. Since the challenge of a trademark only affects the relation inter partes, the trademark rights may still be asserted against other parties.

There is no jurisprudence yet as to the question how to treat confusingly similar signs which are used or registered after the five years period, but before genuine use has taken up (so called “intermediary rights”). Although Art. 12 para. 2 TMA suggests that the priority of a later use of the senior trademark precedes these “intermediary rights”, a part of doctrine tends to protect such a sign under Art. 14 TMA. However, there appears to be an unanimous meaning that the owner of the intermediary rights cannot successfully attack the senior trademark in use (which has however only been used after the registration/use of the former).

Is it allowed to re-register a trademark that has not been genuinely used in the prescribed period of time?

A trademark owner is allowed to reregister a trademark which has not been used. However, according to jurisprudence and doctrine, such trademarks are generally considered null and void, if it is obvious that there was and is no relevant intention of use at all, i.e. that the mark was and is filed for mere defensive purposes (BGE 127 III 160 and also with regard to the prior Trademarks Act BGE 57 II 603, consid. 12; 62 II 60 consid. 2; 98 Ib 180, consid. 3).

The mere fact that a party owns different identical trademarks with overlapping goods does not yet automatically lead to the conclusion the trademarks are null and void. The Administrative Court held that an efficient licencing could justify such registrations (BVGer of 26 August 2008, B-3553/2007, consid. 2).

According to the Swiss group, the purpose of requiring genuine use in uniform rules should be to ensure that market participants are not blocked by registered trademarks that are not in use after a reasonable grace period (and for which monopoly rights are, consequentially, not justified). This is of particular importance in case of availability searches for new trademarks.

This primary purpose of requiring genuine use can be used as a standard when deciding in borderline cases whether a trademark is being genuinely used or not. Keeping the register uncluttered should, however, not be a main purpose of requiring genuine use as it is not helpful when deciding the abovementioned borderline cases (particularly when figurative marks or polysyllabic word marks are involved that do not really restrict the trademark availability for competitors).

Further, the Swiss group finds that each jurisdiction should offer an inexpensive administrative proceeding in the sense of a cancellation action similar to an opposition procedure. Such procedure should facilitate the cancellation of marks which are not used by the owner and non-use can be established on a prima facie basis (e.g. uncontested cases). In turn, there should be sufficient legal remedies for the owner of the alleged invalid mark or the option to bring the question of non-use before a civil court as part of a full-fledged civil procedure.

Finally, the Swiss group discussed a concept of reducing the first period of protection of every registered mark to five years with reduced filing fees. Thus, after five years the owner would have to make an (informed) decision if the mark in question is renewed, now for 10 years each renewal period. Renewal is usually only done if the mark is really used or about to be used. The renewal fees for the renewal periods could be higher than the original 5 years “test”-period. It is clear that such a concept would have to be explored in detail, in particular in view of the Madrid system currently in place.

In determining whether there is “genuine use” of a trademark, according to Swiss case law the competent authority shall take into account all relevant circumstances from which it may be inferred that the trademark is or has been genuinely used. Accordingly, consumer goods and mass products are assessed differently from luxury goods and customized products. Therefore no general threshold, such as a de minimis rule for a trademark, can be established for the number of items sold, the sales figures or the advertising budget.

In its decision of 2009 the Commercial Court of the Canton of Berne stated that also the structure and the size of a company must be considered (Commercial Court of the Canton of Berne of 10 July 2009, consid. III. E. 2, “Formula One Licensing B.V./Infra Metal Establishment”); accordingly, genuine use has to be established in comparison with the commercially reasonable dealing of a company of the same structure and size within the same industry.

Since the applicant’s intention to use is not proven or guaranteed when the trademark is registered (see BGer, sic! 2008, 733 f., “Gmail”), the condition of genuine use ensures only that, after the five year’s period, no trademark is protected without being worth to. As a rule, if a trademark owner uses a mark which essentially differs as pointed out to Question 7, he shall be obliged to apply for a new registration. However, the condition of genuine use has to be applied with regard to the fact that markets often need changes and that concretions of any registration must remain possible. A certain tolerance based on the recognition of the circles of consumers, the strength, the common use and concrete alterations of the trademark, applied from case to case as in Swiss law, seems adequate. On the other hand, deviations from a registered sign should not be accepted as genuine use if they give the owner a wider or other right than he got by the registration itself or by its own efforts to establish it as a well-known mark.

As a result, the working group would welcome new regulations which allow the trademark owners to better follow common lines of modernizing and of bringing up-to-date their registered trademarks. As a rule of thumb, if such redesign leads to an essentially different new mark, the owner can be expected to have registered it in addition to the former registration. Hence, it seems advantageous in course of a new AIPPI question to examine under what condition it is or should become possible to defend currently used trademarks using common elements of formerly used trademarks of the same owner so that such partial use of elements enjoys protection on a longtime perspective, even if the former trademarks have not been used for more than five years (legal problems of old marks in rebranding and/or modernisation exercises).

On the one hand a trademark owner should be able to rely on a certain flexibility within the claimed goods or services as a result of the dynamics of economic development. On the other hand, account must also be taken of the interests of competitors, who will be obstructed in their economic activities by monopolistic claims that are too broadly defined under trademark law.

As a rule of thumb, partial use by a trademark owner should serve to maintain rights under the entire class heading insofar as the relevant consumer group attributes the products under the entire class heading to the trademark owner in the sense of a logical range of products (Marbach, N 1384 ff.; in agreement: Wang, MSchG 11 N 38; Willi, MSchG 11 N 44).

In the view of the Swiss Group, the current grace period for genuine use of five years is an appropriate period given the long time it can take to bring a new product on the market(s). However, it is also true that this 5 years grace period exceeds the minimum standard in accordance with TRIPS Art. 19 para. 1 of by two years. This calls in our view – in the sense of a balancing of interests – for a rather strict standard as regarding the requirement of genuine use within these five years.

The criteria mentioned in TRIPS Art. 19 para. 1 should define what justifies nonuse. The same criteria should apply for all industry sectors, but the circumstances should be analysed in light of the usual practice and legal requirements in a specific sector. The longer the non-use lasts, the higher are the obligations on the trademark owner to find a way to distribute its products (and use its mark) in spite of and around such impediments.

Yes, provided that “entitled third party” means use with the owner’s consent and for the owner.

Should there be a difference between licensees and independent distributors and will registration of a license be necessary?

No. In respect of independent distributors, the question arises whether the trademark is used with the owner’s consent. It is disputed in particular, whether use of a trademark on parallel imports constitutes genuine use (affirming: BGE 83 II 467 ff.; David, MSchG 12 N 22; denying: Marbach, N 1410; Meier, 98; differentiating whether the owner of the trademark would approve distribution in Switzerland eventually (“billigend in Kauf nehmen”): Bürgi Locatelli, 99 f.; Wang, MSchG 11 N 106).

Registration of a license should not be necessary.

We do not see any reason for a special exception to the genuine use requirement. Either non-use is totally excused, or genuine use (as opposed to mere token use) shall be required. Certain market limitations, however, may limit the legally or factually possible use, so a limited use, which without regard to such impediments could be seen as mere token use, becomes genuine use.

A trademark may be protected in spite of lack of genuine use in Switzerland on the basis of unfair competition or as notoriously known trademark (Art. 3 para. 2 lit. b Trademark Protection Act, Art. 6^bis Paris Convention).

Anybody can assert lapse of trademark protection based on Art. 12 TMA because of lack of genuine use beyond the grace period in the absence of proper justification, but not a party that would be prevented from using itself the respective trademark for some reasons (BGE 136 III 104, “Sunrise/Yello Strom”; BGE 125 III 193, “Anheuser Busch/Budejovicky Budvar Narodni Podnik”). Some authors (and the Federal Supreme Court in an obiter dictum) say that a Swiss trademark for lack of genuine use in Switzerland (and absence of proper justification) should not be cancelled if the same mark for the same owner would be protected on the basis of unfair competition or as notoriously known mark (BGer of 29 October 2010, 4A_371/2010, “Guccio Gucci S.p.A./G”).

The issue of re-registration is highly complex and uniform rules appear therefore not adequate to decide each case the same way. It is therefore solely up to the parties whether they wish to re-register a trademark (possibly in bad faith) and risk another court proceeding or not.

Besides, any uniform rules could easily be bypassed by simply registering the mark in question in the name of a third party. Furthermore, such reregistered marks could be filed for certain goods or services only, or in a slightly amended design. All these cases would then likely not be covered by such a rule. Finally, and depending on the case, the Court possibly even orders a company or individual not to use/egister a sign anymore. This could then already be a prohibition. Further rules are therefore not necessarily required.

Should other parties’ interests than those of the new registrant be taken into account, e.g. consumers’ interests in avoiding confusion as to the nature and quality of goods and services that might be expected under a particular mark?

No. Absolute grounds of exclusion (signs contrary to public order, morality or applicable law) are already considered by the Trademarks Office in the registration process. As such, certain trademarks cannot be registered due to this provision. There are further provisions, food law, pharmaceutical law and, in a general way, unfair competition law, which all aim to protect consumers of misleading information. As such, there is no need for further regulation.

Summary

Under Swiss substantive trademark law, the term “genuine use” is not defined and has therefore no specific meaning. On the other hand it is a recognized concept under Swiss law that use of the trademark is a requirement for maintaining its protection. The Swiss Trademark Act (“TMA”) only provides for very few concrete parameters as regards the kind of use which is required and regarded as sufficient to maintain the rights that vest in a registered mark. The concrete parameters of quality or degree of use were developed by Swiss scholars and jurisprudence over the years and resulted in the doctrine of “rechtserhaltender Gebrauch” or “use maintaining the mark”. The requirement of “genuine use” (or rather “serious use” as referred to in Swiss jurisprudence) is only one element of this doctrine.

In this sense, according to the TMA, a trademark shall enjoy protection to the extent that it is used in commerce in connection with the goods and services for which it is claimed. This means that use maintaining the mark is, in fact, a requirement for maintaining protection in Switzerland. On the other hand, it is not a statutory duty in a strict sense, but only an incidental obligation: the nonfulfilment of this obligation makes the respective mark vulnerable to cancellation upon intervention of interested third parties, but will not expose the trademark owner to automatic legal consequences.

This legal concept creates a state of uncertainty for all parties concerned which is mostly to the advantage of the trademark owner unless the validity of the mark in question is challenged by an interested third party based on alleged non-use. This can be done in the course of an opposition procedure or in the framework of infringement proceedings as an efficient defense. In all other cases the party challenging the use of a mark must commence a full-fledged civil cancellation action which is generally quite expensive. Therefore, the Swiss legislator is currently discussing to introduce a new inexpensive and simplified administrative procedure for cases in which non-use is established at least on a prima facie basis. The procedure would offer the option to bring the matter before a civil court if the owner of the challenged mark does not accept the first instance cancellation award. However, it is still open whether and when such new remedy will enter into force.

With the exception of the rather daunting costs of a civil cancellation action, the Swiss group opines that the Swiss “use-system” governing registered trademarks is based on a sound concept with a generous five years grace period. However, new concepts in order to increase legal certainty (“Rechtssicherheit”) and reduce costs were discussed within the Swiss group. One such concept could be to generally reduce the first period of protection of every registered mark to a five years “test period” with reduced filing fees. In most cases it is clear after five years whether a mark is used at all (and therefore renewed) or of no commercial interest (and therefore abandoned). This selection-process by the trademark owners could be supported by increased fees for the first renewal period of 10 years.

It is clear that such concepts would have to be explored in detail, in particular in view of the Madrid system currently in place. However, any such concept should help cutting the administrative costs in systems with the formal requirement of in-use declarations and reduce legal uncertainty in systems which put the burden to challenge “genuine use” to interested third parties.