Victorinox has agreed to let the state-owned procurement organisation, Armasuisse, register the name ‘Swiss military’ in the United States in return for an exclusive licence to market perfumes using the same name.
Under the agreement reached on Thursday, Victorinox will continue to market products under the “Swiss army” name as it has done for several years now. The brand known for its red Swiss army knives had crossed swords with Armasuisse over the registration of the trade name "Swiss Military" in the US.
At a hearing at the Bern cantonal commercial court, Armasuisseexternal link asked Victorinoxexternal link to renounce its ‘Swiss Military’ trademark in the US that had been registered several years ago. Armasuisse also demanded compensation of CHF1 million ($1 million) but assured the court that it did not seek to damage the brand that it considered a “valued and long-standing partner".
Victorinox has been a government supplier since 1891. It produces the famous Swiss army knife and has popularised them internationally.
However, a 2013 law on protection of state symbols requires the government to provide better protection for military trademarks.
In January, Armasuisse won a case in the Federal Administrative Court against small watchmaking firm Montres Charmexexternal link that was selling watches bearing the name ‘Swiss Military’. The court ruled that the term ‘Swiss Military’ could only be used on watches licensed by the government.
In court, Victorinox's lawyer stated that the ‘Swiss Army’ brand already belonged to the company. He said that in a 2004 government contract, the latter recognised Victorinox's unconditional right to use the trademark. The lawyer added that Armasuisse has not contested the use of the name ‘Swiss Military’ in the US for many years. But a 2013 motion on state intellectual property - passed in parliament - has put pressure on Armasuisse to recover lost ground on trademarks. Victorinox has launched a counter-complaint against Armasuisse.
Despite the legal challenge, both parties were ready to take part in negotiations involving a possible compromise. These negotiations began on Thursday afternoon. However, according to Armasuisse's lawyer, the legal dispute could continue between the two parties in the US. The procedure there is suspended, he said, as both parties must first settle their dispute in Switzerland.
Swiss Army Knife
The history of the iconic red penknife from Switzerland goes back to 1884 when Karl Elsener opened a workshop in Ibach, canton Schwyz.
In 1891 he heard that the Swiss army had decided to buy a knife for all Swiss soldiers. He took the initiative to found the Swiss Master Cutlers Association, which delivered the first knives to servicemen.
Today Victorinox is the largest cutlery producer in Europe, but sales of army knives have slumped since the September 11 attacks in the United States when hijackers used knives and box cutters to overpower the aircraft crews.
Since then, airlines and aviation authorities have banned passengers from bringing pocketknives into aircraft cabins. Victorinox suffered a serious blow as a result since pocketknives make up about 70% of company revenues.