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A unique company name can be crucial to the success of a business. It not only helps to stand out from the competition, but also remains in the memory of customers in the long term. In Switzerland, you have a lot of freedom when choosing a company name, but compliance with legal requirements and protection through the registration of the corresponding trademark are crucial to avoid later disputes with third parties.
Choice of company name
In Switzerland, you enjoy a great deal of freedom when choosing a name for your own company. Take advantage of this opportunity and use creative fantasy names. Factual names such as “IT Service GmbH” have no distinctive character, are usually not registrable and are unsuitable for standing out from the competition or remaining in the memory of your customers. Fantasy names or companies that do not directly describe the products or offered services are much better suited. A good example is “Google LLC – a name that sounds pleasant and has no direct reference to the services offered (“Googol” is the English name for the number 10¹⁰⁰).
When choosing an AG (corporation) or GmbH (limited liability company), it is important to ensure that:
- The company name does not convey a deceptive impression, for example by using (i) a deceptive geographical name or (ii) a term that refers to an activity or —product that is not consistent with the purpose of the business;
- The company name is clearly distinguishable from all companies already registered in Switzerland; and
- The company name does not run counter to the public interest.
The latter is intended to prevent private companies from using designations in their company name that give the impression that they are public, state or municipal institutions.
Protection of the company through entry in the commercial register
Once registered in the commercial register, third parties cannot register an identical company name, which is checked by the commercial register office.
In the case of confusingly similar company names, the owners of an older company have the option of taking legal action against the registration and use of such company name. It has to be considered that in company law – unlike in trademark law – no “industry principle” applies and an older company can assert itself against a younger company even if the company of the older company is active in completely different areas.
It is therefore advisable to carry out a company name research before setting up a company, to avoid unpleasant surprises such as a forced change of the company name.
Best protection through trademark registration
There are similar consequences for failing to conduct a trademark search. As a distinctive sign, the trademark distinguishes the goods and services of one company from those of others. The goods and services identified with the trademark can be clearly assigned to a company through the so-called function of origin. Although an older trademark cannot be held against the company entry in the commercial register, it can be held against the use of the company name in the course of business. As many companies also use their company name synonymously to identify their products, older trademarks are often a reason for a forced rebranding if there is a risk of confusion. The longer a product has been successful on the market, the more painful is a rebranding. In order to recognize and exclude this risk, a trademark search is recommended before introducing a product name.
Registering your company and the product names as a trademark also protects you from other companies using your trademark for their own products. Trademarks that are similar in their overall appearance, spelling or pronunciation to an existing trademark, may constitute a trademark infringement against which you can take action. By this way you can also protect your company logo, which is not protected by registration in the commercial register. Trademark protection is valid for ten years from registration in the trademark register and can be renewed as often as you like.
In addition, a trademark registration offers defensive protection and prevents third parties from registering your product name as a trademark and then holding it against you after registration.
With additional trademark protection for your registered company, you can enjoy comprehensive protection right from the beginning and avoid trouble later on.
When is the right time to file a trademark?
As a trademark registration also protects investments in the product and brand. It is not surprising that there is a demonstrable correlation between corporate success and the level of trademark protection. This is one of the reasons why investors and potential corporate buyers also pay close attention to the protection of their targets’ intellectual property rights.
It is advisable to register the trademark before starting to use it and before investing in marketing. The need for rights-preserving use is taken into account by the fact that a five-year grace period for use is granted in Switzerland and the EU, during which any non-use of the trademark has no negative consequences for the trademark owner.
The costs of a company name search and trademark search are just as manageable as the costs of a trademark application and are all the more acceptable when you consider them in relation to a potential trademark conflict.
