Only identical or quasi-identical marks can be subject of action for transfer

Switzerland

The Swiss Supreme Court has clarified that only identical or quasi-identical trademarks can be the subject of an action for transfer. It also held that a court can oblige a respondent to make a declaration of intent to transfer a domain name to the holder of the corresponding trademark under the Unfair Competition Act.

The claimant, Go Fast Sports & Beverage Company, sells clothing under the trademark GO FAST and an energy drink under the trademark GO FAST SPORTS. It alleged that respondents - former distributors of the claimant’s products in Switzerland - were not allowed to use the marks GO FAST and GO FAST SPORTS, as well as domain names containing the marks (eg, 'gofastsports.ch') after the termination of the distribution agreement between the parties. The claimant filed, among other things, an action for the transfer of the marks and the domain names.

The Court of Appeals of the Canton of Solothurn declared that the respondents' trademark registrations were void and should be cancelled, and also ordered the cancellation of the domain names. However, the court held that the claimant was not entitled to a transfer of the marks and domain names. It did not base its decision on the Federal Trademark Act because it found that the claimant’s trademarks belonged to the public domain. However, it decided that the respondents’ use of the GO FAST mark after the termination of the distribution agreement violated the Federal Unfair Competition Act because it created a risk of confusion with the claimant’s products.

The Swiss Supreme Court affirmed the cancellation of the  respondents’ trademarks and the refusal to transfer the marks (Decisions 4A_39/2011 and 4A_47/2011). The issue of whether the claimant’s marks belonged to the public domain was explicitly left open, because the lower court’s decision was based on a violation of the Unfair Competition Act.

The Supreme Court stated that, pursuant to Article 53 of the Federal Trademark Act, a claimant may file an action for the transfer of a trademark where the respondent has usurped the trademark through bad-faith registration or through the continuing use of a trademark that had been transferred with the trademark holder’s consent, even though consent was later withdrawn. Under Article 53, only trademarks that have been declared void or cancelled can be the subject of an action for transfer if the declaration was based on the fact that the claimant had better rights to the marks (Article 3). The court clarified that only marks to which the claimant would be entitled if it had registered them itself could be subject to a transfer. This applied only to identical or quasi-identical marks; trademarks that are merely similar to the claimant’s marks cannot be the subject of an action for transfer. The issue of whether the mark belonged to the public domain was left open, because the claimant had failed to show that it had a legitimate interest in the transfer.

The court also asserted that Article 53 cannot serve as a legal basis for the transfer of domain names. However, it confirmed previous case law that, under the Federal Unfair Competition Act, the court can order a respondent to make a declaration of intent to transfer a domain name to the holder of a trademark, even though, in the case at hand, the cancellation of the domain name was sufficient to eliminate unfair competition.

Eva Kaelin, Walder Wyss AG, Zurich

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