The Swiss Federal Supreme Court, in a decision of 23 February 2012, has given welcome guidance on the requirements of proof in a trademark matter where one party claimed the other party's lack of any intention to use its registered trademarks in Switzerland and so the nullity of the marks in question.
Yello Strom GmbH, a major German energy distribution company (Yello), held several Swiss and international trademark registrations designating Switzerland, all containing the element "YELLO". Applications were filed in 1994, 1999 and 2002 claiming protection for a very wide range of goods and services. In May 2005, Sunrise Communication AG, a Swiss provider of telecommunication services (Sunrise), launched a telecommunication service under the name "Yallo" and in this regard registered several trademarks containing the element "YALLO". In response to Yello's demand for cancellation of the YALLO trademarks due to conflict with its YELLO marks, Sunrise invoked Yello's non-use and lack of any intention to use the YELLOtrademarks in Switzerland.
According to Swiss trademark law, in common with other jurisdictions, the holder of a trademark loses the right to assert its rights in the trademark if it has not used the trademark in connection with the goods or services claimed for an uninterrupted period of five years (art. 12 para 1 Swiss Federal Trademark Act, FTA). Pursuant to Swiss case law, based on the doctrine preventing abuse of legal rights, trademark protection cannot be claimed at all if the trademark has been registered without any intention of use but rather with the intention to prevent a corresponding trademark registration by third parties, to enlarge the scope of protection of actually used trademarks or to extract financial or other benefits from a former user. A lack of intention to use a trademark leads to its nullity. The owner of the defensive mark cannot invoke the five year grace period under art. 12 FTA.
In the case at hand, the non-use of the YELLO trademarks was undisputed, other than in relation to the use of one particular trademark by Yello's licensee, a music band named "Yello", where Sunrise failed to convince the Court of its argument of non-use. For the rest, Yello opposed the previous instance's presumption of a lack of intention to use its trademarks and challenged the allocation of the burden of proof made by the previous instance. As the burden of proof of the existence of an alleged fact lies with the person that...