The Swiss Federal Supreme Court affirms interest in bringing an action for annulment with respect to a Central Attack under the Madrid System


In its decision 4A_97/2020 of August 5, 2020, the Swiss Federal Supreme Court addressed the question of whether the interest in bringing an action for annulment concerning a basic trademark can be affirmed due to the legal consequences inherent to an approval of such claims under the institute of the so-called Central Attack.

National and international trademark application

On November 15, 2016, C. filed a trademark application for the signs „HMO“ and „HM-O“ with the Swiss Intellectual Property Institute (IPI). The IPI refused to register the first-mentioned trademark „HMO“, granted, however, protection for the sign „HM-O“.

Based on the Swiss trademark „HM-O“, C. applied for international trademark protection under the Madrid System (designated countries: Australia, Bahrain, Colombia, EU, Iran, Mexico, Oman, Philippines, Russia, Singapore and Vietnam). In 2017, the EU granted protection for the trademark „HM-O“.

Between 2016 and 2017, C. marketed food for infants that contained, among other substances, human milk oligosaccharides and referred to those products as „HMO“ on various websites.

Provisional refusal of registration and opposition against trademark „HM-O“

On August 2, 2017, A. sent a letter to C. threatening to object to the trademark application regarding the acronym „HM-O“ on the ground that the sign designated a class of compounds of „human milk oligosaccharides„, to which the industry usually refers to by the abbreviation „HMO„. A. mentioned that he had taken respective measures, inter alia, in the European Union and Switzerland to prevent and invalidate all applications and registrations of the sign „HM-O“.

Plaintiff’s action for annulment – Lack of interest?

On March 22, 2018, A. and B. (the plaintiffs) brought an action for annulment before the Cantonal Court of the Canton of Vaud against C. (the defendant). Defendant took the view that an action for annulment was inadmissible due to the lack of an interest in bringing proceedings since there was no competition between the parties in Switzerland.

With its judgment of November 1, 2019, the Cantonal Court agreed with the defendant and ruled that plaintiffs‘ action was inadmissible. Plaintiffs filed appeal against this decision with the Swiss Federal Supreme Court and sought admission of the action for annulment, declaration of invalidity of the Swiss trademark „HM-O“ and order for trademark cancellation by the IPI.

Central Attack under the Madrid System

The Federal Supreme Court held that, irrespective of any commercial activities within the Swiss territory, the plaintiffs had clear interest in bringing their action for annulment before a Swiss court. According to the Court, the plaintiffs‘ action for annulment constitutes a so-called „Central Attack“ under the Madrid System, which allows plaintiffs to invalidate trademark protection of the defendant’s trademark „HM-O“ in all countries designated by the defendant in its international registration, obtained based on the Swiss basic trademark application („HM-O“).

According to the trademark protection mechanism provided under the Madrid System, the international trademark registration always derives from a trademark registered at national level. This basic trademark allows trademark owners to designate additional countries in their international trademark registrations (i.e. members of the Madrid System), where respective owners intend to obtain additional trademark protection. Therefore, if a trademark owner has intention to expand protection for his trademark, such person has clear interest in applying the basic trademark in a country of origin under the Madrid Agreement and/or Madrid Protocol. The Madrid System, accordingly, serves to simplify the extension of the overall trademark protection. Therefore, Central Attacks serve as legal „counter-tool“ to plaintiffs‘ (facilitated) trademark application rights under the Madrid System.

The Federal Supreme Court concluded that even if plaintiffs would not market HMO-products in Switzerland, they would nevertheless have a factual interest in having the defendant’s Swiss basic trademark declared invalid before a Swiss court. This would be the only way such parties could benefit from the legal effects of a „Central Attack“ as envisaged by the Madrid System.

Conclusion

The Federal Supreme Court took the opportunity to elaborate on the (legal) interest in bringing an action for annulment in the context of the so-called Central Attack. With regard to the admissibility of the action for annulment, the Court essentially affirmed the possibility of the existence of a sufficient interest – despite the lack of a competitive relationship between the parties within Switzerland – due to the ratio legis, i.e. the legal effects and the importance of a Central Attack under the Madrid System. The Court therefore took the opposite view to the lower court.

We agree with the Federal Supreme Court’s view in this case. A divergent opinion would unnecessarily dilute the instrument of the Central Attack under the Madrid System in the Swiss territory and would severely impair the effectiveness of this legal instrument in general. Furthermore, this would adversely affect litigating parties on Swiss territory.