Use of stars for hotel rankings cannot be monopolised

The Swiss Federal Supreme Court has ended a five-year dispute between Schweizer Hotelier-Verein (SHV) and Gastrosuisse over the right to use a star ranking system for hotels (4A_385/2010, January 12 2011).

SHV has been using stars to rank hotels since 1979. It sued Gastrosuisse and obtained a preliminary injunction from the Commercial Court of Zurich preventing Gastrosuisse from using stars to rank hotel quality. However, both the Commercial Court of Zurich in the proceedings on the merits and the Federal Supreme Court on appeal held that the use of stars to rank hotels could not be monopolised, as the public would not perceive the stars as an indication of origin but, rather, as a (generic) description of quality. There was no equivalent alternative to the use of stars for hotel rankings: the use of other signs - such as coins, circles and hats - was not equivalent because the star sign has a meaning of 'indication of quality' attached to it in the mind of the relevant public. Therefore, even if the star sign had acquired distinctiveness (this issue was left open, as it was not decisive), it could not be protected, as it was barred from trademark protection on absolute grounds.

The case is interesting because the marks on which SHV based its claim were so-called 'guarantee marks' under Article 21 of the Swiss Trademark Act, and these are rarely litigated.

Guarantee marks, which are not to be confused with collective marks (see the definition of a 'collective mark' in Article 66 of the Community Trademark Regulation (207/2009)), may be used by any third party that meets the criteria laid down in a regulation submitted by the trademark owner to the Trademark Office. The owner may not refuse permission to use the mark under 'fair, reasonable and non-discriminatory' terms; however, the owner may request the payment of a fee.

SHV argued that the marks were valid because, as guarantee marks, they could still be used by third parties as long as they met the required criteria. The Supreme Court's reasoning on this point was a bit muddy, but essentially boiled down to the fact that awarding stars to rank hotel quality had a subjective component, because the criteria could not be laid down with sufficient precision, thereby giving the trademark owner a right to veto the use of the guarantee mark by third parties. In this sense, SHV monopolised the use of stars, which was not permissible due to their meaning as an indication of quality. The Supreme Court also pointed out that SHV could only grant rights to use the mark as registered (see below left), but sought to enjoin all use of stars for hotels rankings (see below right).

Mark Schweizer, meyerlustenberger, Zurich 

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