“There was a flood of registrations for service marks”

Magda Streuli-Youssef: I can only vaguely remember the political discussions at that time. The first push for a revision came from interest groups – the Swiss Trade and Industry Association ‘Vorort’ (now economiesuisse) and the Swiss Association for the Protection of Intellectual Property (now the Swiss Association for Intellectual Property Law). These two organisations asked the FOIP (now the IPI) to review the act.

The new TmPA was a quantum leap from a traditional law to an effective modern law in Switzerland. This can be seen in the amendments that were made. The new act:

• replaces priority of use with priority of registration
• introduces service marks and 3D marks
• recognises trade marks for export
• doesn’t require any examination of the applicant’s filing capacity in the application procedure
• redefines use of a trade mark by the proprietor and rights infringements
• specifies free transferability of the trade mark
• introduces opposition proceedings
• strengthens the position and the defensive rights of the trade mark proprietor
• extends the grace period for use from 3 to 5 years
• shortens the period of protection from 20 to 10 years
• allows the trade mark to be renewed after 10 years without any further examination
• discontinues the company mark

This reform brought the law into line with the law of other European countries, including the EU.

In general, I’d say that the law has considerably affected trade mark practice.

• Priority of registration has significantly improved legal certainty and made it much easier to predict legal decisions when advising clients. The harsh impact of the new registration principle was mitigated by the right to continued use set out in Art. 14 TmPA. This allows a third party to continue using a sign that it had used prior to the filing of the application to the same extent as before. However, the third party has no defensive right against the proprietor of the registered trade mark.

• In the first two years after the TmPA came into force, there was a flood of applications for service marks. This was due in particular to the transitional provision in Art. 78 TmPA on ‘priority of use’. What’s more, trade marks filed based on the priority of use were not opposable.

• Disputes about the likelihood of confusion shifted from the ordinary courts to opposition proceedings: Today we can sum up that the likelihood of confusion in trade mark law is largely decided by the IPI and the Federal Administrative Court. At the same time, the number of civil proceedings before the ordinary courts about the likelihood of confusion under trade mark law has fallen sharply. This has advantages and disadvantages. A definite plus point is that the Federal Administrative Court has since been able to develop a rich and well-founded body of practice in opposition cases. Additionally, the revised law was intended to make opposition proceedings quick and inexpensive. Unfortunately, they’re still not quick. Experience has shown that opposition proceedings take too long, often even longer than ordinary proceedings. This needs to be remedied. One disadvantage of opposition proceedings is that they are governed solely by registry law. This means that some arguments that can be presented in civil proceedings (such as considerations of fairness) can’t be used in opposition proceedings.

I found the changes very positive because the new law removed some of the uncertainties in the previous law. It also improved the position of trade mark proprietors and made it easier for them to enforce their rights. For example:

- Under the previous law, the priority of use could lead to unpleasant surprises for plaintiffs during proceedings. The proprietor of the more recent trade mark would sometimes claim that they had used it before the proprietor of the earlier trade mark had registered it (priority of use). This always led to the case being dismissed (see BGE 120 II 111 E.2, available in German only).                                                        

• No more pleas of prior third party rights: Under the previous TmPA, the proprietor of a contested trade mark (the defendant in the lawsuit) could use the plea of prior rights to object that the plaintiff’s trade mark was not sufficiently different from the earlier trade mark of a third party. If this plea was accepted, the plaintiff’s trade mark was declared invalid and the case was dismissed (see BGE 120 II 111, 90 II 43, available in German only).

• Infringement of a trade mark: Any use of a trade mark as a distinctive sign, including use in advertising, in business documents, as a company name, as a label or otherwise as a business designation is now seen to be infringing the trade mark. Under the previous law, the only use considered to be trade mark infringement was affixing the trade mark to packaging. The only way to tackle use in advertising etc. was to take action under the Federal Act on Unfair Competition (UCA).

• The filing procedure: This is simpler because the applicant’s filing capacity no longer needs to be examined. Advising clients is easier because there is more legal certainty. Legal decisions are more predictable. Trade mark proprietors can enforce their rights better and more easily.

• Opposition proceedings: Disputes about the likelihood of confusion are now mainly decided by one authority and one court for the entire territory of Switzerland. This has led to an extensive body of case law, which has also tended to lead to more transparency and coherence in practice. This development has also made it possible to draw up decision-making principles to assess opposition proceedings (IPI examination guidelines).

• Concentration of trade mark conflict cases in opposition proceedings:

• Ever since opposition proceedings were introduced, I’ve noticed that more and more conflict cases are being settled outside of courts and administrative bodies.

• Ordinary proceedings before the civil courts are now mainly used for special cases. For example, disputes about identical names, disputes based on coexistence agreements and atypical conflicts, such as conflicts regarding dissimilar signs or circumstances in which aspects of competition or contractual law also play a role. This has had the positive effect that the Federal Supreme Court has thoroughly examined topics such as the coexistence agreement, agent marks and conflicts in the case of identical names.

I think the key milestones are:

• assistance by customs
• the presumption of the exclusive licensee’s right of action
• the Swissness bill
• cancellation proceedings before the IPI

I’d mainly like to see changes that can help provide greater legal certainty and improve predictability in consultations and in opposition proceedings. That would help to avoid extremely drawn-out cases.

• Clearer provisions on agent marks stating that if the contractual relationship no longer exists, it will be presumed that the agreement of the proprietor of the registered trade mark has lapsed.

• Regulation of the question whether the exclusive licensee is also entitled to bring an action to have a trade mark declared invalid. The exclusive licensee’s right of action is regulated by law only for actions for performance (infringement actions) in Art. 55 TmPA.

• A legal regulation of forfeiture with a fixed period of five years (as in the EU) or a time frame. That would increase legal certainty. 

• To accelerate opposition proceedings, the IPI could be given the authority to announce the applicable time limits for the parties at the beginning of the opposition proceedings, as is the case in the EU and in arbitration proceedings. This needs to be examined. In the case of suspensions, a fixed period could be introduced, similar to the ‘cooling-off period’ in the EU.