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In the past few years, Künzli SwissSchuh AG was embroiled
in several trademark disputes with the US shoe manufacturer
K-Swiss. K-Swiss was established in the 1960s by two Swiss who
emigrated to Los Angeles (the original founders are no longer
involved in the company). K-Swiss initially imported Künzli
shoes to the US (while Künzli imported American sneakers to
Switzerland), then started producing its own shoes and eventually
became one of the leaders in the casual shoe sector.
Künzli shoes featured special shoe laces
and five decorative stripes (Künzli sold the US patent for the
shoe laces to K-Swiss in the 1970s). K-Swiss registered the five
stripes in the US in 1974 and in Germany in 1990 as a shoe
trademark, while Künzli itself neglected to register the five
stripes as a trademark until 2011.
In 2012, the Düsseldorf appellate court
confirmed K-Swiss's right to use the five stripes for shoes in
Germany. This judgement forced Künzli to remove the five
stripes from its shoes and led to its decision to use five squares
in a row in future.
In Germany, a trademark owner can prohibit a
previous user of an unregistered mark from continuing to use this
mark as soon as it has registered the mark. In Switzerland, this
principle of first registration is weakened by the right of
continued use under Art. 14 of the Trademark Protection Act. This
right of continued use gives the previous user the right to
continue to use a mark that was in use before the registration to
the same extent as before (i.e. product diversification is
excluded), even if the mark in question has since been registered
as a trademark by someone else. This granting of legal privileges
to the first user rather than the first applicant is unique to
Switzerland and is not applied by other countries.
If there is no right of continued use, things
can become difficult – like in the Künzli case
– if a long-standing competitor is prohibited from
continuing to use a well-established mark just because a third
party registered the trademark many years later. The only defence
against such an annexation of one's own mark is to prove that
the third party registered the trademark in bad faith, but it is
relatively difficult to provide this proof. In the Lindt golden
bunny case, the EU Court of Justice decided that bad faith should
be dependent on whether the party registering the mark knew or
should have known that the same or a similar mark is already being
used as a trademark, whether the applicant was mainly interested in
preventing third parties from continuing to use the mark, and what
kind of protection the newly registered trademark enjoyed
previously. Simply the fact that a company knew that someone else
was already using the registered trademark does not automatically
mean that the newly registered trademark is invalid because it was
registered in bad faith.
The lesson to be learned from the Künzli
case is that the early international registration of a trademark is
essential. Swiss companies cannot rely on Art. 14 of the Trademark
Protection Act, because it does not apply beyond the borders of
Switzerland. Künzli seems to have also learnt its lesson, as
the five squares were registered as a trademark for shoes in
Germany.
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