Swiss regime on corporate names revised

The Swiss regulations regarding corporate names shall be harmonized for all legal forms of companies and partnerships by a new act passed by the Swiss Parliament, which is expected to come into force in 2016.

Goals of the new regime

With the new act the following goals shall be achieved: (1) harmonization of the criteria on corporate names; (2) harmonization with respect to the protection of the corporate name; (3) recognizability of the legal form of the entity; and (4) continuity with respect to corporate names.

The new regime offers new possibilities with respect to the corporate names of general partnerships, limited partnerships and partnerships limited by shares.

But owing to the liberal transitional provisions of the new regime, no immediate action is required to adapt the corporate names of existing companies and partnerships.

New freedom and protection

The new regime has dropped the requirement that the family name of the partner(s) with unlimited liability must be part of the corporate name of the relevant general partnership, limited partnership and partnership limited by shares, but they can still legitimately include their family names.

As with all other forms of companies, the corporate name of general partnerships, limited partnerships and partnerships limited by shares may consist of technical or fanciful components, trademarks or any other kind of description – as long as the corporate name is not misleading and does not infringe any rights of third parties. The only exception is for individual enterprises, which will be required to continue to include the family name of their owners in their corporate name.

As a consequence of the harmonization of the criteria on corporate names, the corporate names of general partnerships, limited partnerships and partnerships limited by shares will henceforth enjoy exclusivity throughout Switzerland. In the past this protection was limited to all other forms of companies.

The new regime requires that the corporate name includes the legal form of the relevant entity, as has already been the case with respect to some legal forms of companies. The relevant indication may be in the form of an official abbreviation.

Transactions simplified

As a result of this harmonization and the new requirements, the transformation of the legal form of a company or partnership will no longer have an impact on the core part of the corporate name. The only required amendment will be to the indicator of the legal form.

General partnerships, limited partnerships and partnerships limited by shares will no longer be required to remove or replace the family name of their partner(s) with unlimited liability in the case of any sale of the entity or any form of succession.

Corporate name v trademark

Although both corporate names and trademarks are used in commercial trade, there are numerous differences between them.

A corporate name is the name under which a legal entity “does business”. It is deemed to individualize a particular entity and confers on its holder the exclusive right to use the name for the entity’s identification. Whereas under the new regime on corporate names most entities now enjoy exclusivity throughout Switzerland, protection of an individual enterprise’s name is still limited to the place of its registered office. The core part of a corporate name is generally arbitrary, but may not contain graphic elements.

A trademark, on the other hand, is used to designate particular goods and/or services. It confers on its holder the exclusive right to use the mark in connection with said goods and/or services throughout Switzerland.

A trademark may consist of words, graphic elements or of a combination of both. It must neither belong to the public domain (i.e. be descriptive for the claimed goods and/or services) nor be deceptive or contrary to public policy, morality or applicable law.

Once the trademark has been published in the Swiss Trademark Register, a three-month period begins during which owners of prior trademark registrations may oppose the registration. Whereas the holder of a trademark may limit the list of claimed goods and/or services at any time after the trademark’s registration, the trademark itself may not be amended.

Conflict

Corporate names may conflict with other corporate names or trademarks that are similar or even identical. Such conflicts and their consequences have to be assessed on an individual basis, taking into account the signs in question as well as the likelihood of confusion in the commercial trade.

As a rule, corporate names/trademarks which are registered first prevail over respective signs registered later. If there is a conflict between a prior trademark and a corporate name registered later, the holder of the trademark in question may, as a rule, prohibit the holder of the corporate name from using it in connection with the claimed goods and/or services.

If, on the other hand, the corporate name has been registered first, the holder of the conflicting trademark may, as a rule, not prohibit the holder of the corporate name from using said name to the same extent as he has done prior to the trademark’s registration.

Research marks

In order to identify potential conflicts with other signs, conducting careful research for identical and confusingly similar signs before registering a trademark or corporate name is highly recommended.