Federer’s Made-in-Asia On Sneakers Win Right to Display Swiss Cross

(Bloomberg) — Roger Federer has flown the flag for Switzerland on and off the tennis court for decades. Now the shoes that bear his name can also legally do the same.

Swiss shoemaker On Holding AG, which makes a model called “The Roger” that the tennis legend helped design, has just been authorized to use the Swiss cross on the sneakers it sells in Switzerland, despite them being manufactured over seven thousand miles away in Asia.

Until now, under “Swissness” rules, the white Swiss cross on a red background was reserved exclusively for products made in the country, guaranteeing their origin and serving as a symbol of Swiss manufacturing quality. To be able to use it, companies had to allocate at least 60% of production costs to Switzerland and have an essential production step made in the country.

But the Swiss Federal Institute of Intellectual Property in mid-March decided to change this practice. Effective immediately, companies that develop their products in Switzerland will also be allowed to add the Swiss cross to them.

“The IPI is changing its previous practice so that specific operations, such as ‘Swiss Engineering,’ may be marked with the Swiss cross,” the institute said in an emailed statement to Bloomberg.

The Swiss patent regulator insists it’s the application of the rule around the use of the Swiss cross that’s changing, not the law itself. The decision came after the institute found that Swiss companies have greater incentive to manufacture abroad due to “changes in the trade policy environment,” but want to keep their R&D local, it said.

The debate around “Swissness” in manufacturing has been going on for years. Ironically, it was Donald Trump’s surprise decision to slap Switzerland with a 39% tariff on its imports to the US, before later relenting, that likely helped push things forward, says lawyer Jürg Simon.

With the new practice, innovation and creativity “made in Switzerland” will now be treated the same way as production, said Simon, co-head of intellectual property law at Lenz & Staehelin.

On, whose footwear is popular with tech and finance bros in the US, its biggest market, is considered a success story of Swiss engineering.

Founded in 2010 by a trio of Swiss entrepreneurs, On initially took off in its home market before expanding in Europe and the US, standing apart from competitors with its distinctive tubular soles.

In 2019, tennis legend Federer invested a reported $50 million for a small stake in the company. The New York-listed company is now worth about $11 billion, helping Federer, whose stake is today worth hundreds of millions, to become a billionaire.

Zurich-based On welcomed the decision. It “reflects a modern understanding of ‘Swissness’ and acknowledges the reality of contemporary Swiss value creation: the strength of our economy lies not only in manufacturing but equally in innovation, research, development, and design,” the company said by email.

The debate around what “Made in Switzerland” really means has often centered on the country’s watchmaking industry, where some manufacturers flogging timepieces for thousands of dollars like to draw a distinction between some components made in Asia and the watches which are “assembled” in Switzerland.

Criteria for labeling a watch Swiss-made currently requires: the movement to be locally made, the timepiece to be put together in Switzerland and that final inspection of the watch takes place in the country. This is on top of the minimum requirement of 60% of manufacturing costs being Swiss.

Breitling AG, known for its chunky, metal timepieces, doesn’t expect a “meaningful shift” of core watchmaking activities from Switzerland to other countries, CEO Georges Kern told Bloomberg by email.

“Design, engineering, assembly, and quality control will remain in Switzerland for any serious luxury brand,” he said.

As for the evolution of “Swissness,” Kern said it is a delicate balance. “Some flexibility can reflect global realities, but the industry must avoid diluting the label, he said.

“It remains one of the strongest assets our industry has.”

Legal challenge?

The new practice could still be challenged in court, according to Lenz & Staehelin’s Simon, and at least one manufacturer seems intent on doing so.

Swiss shoemaker Kuenzli SwissSchuh opposes the decision, despite potentially benefiting from it. The company produces in Albania and in Portugal, but CEO Roberto Martullo said the new rule will “severely devalue the ‘Swiss Made’ label,” he told Bloomberg.

The Kuenzli Icona, which looks a little like a more polished version of the Adidas Samba only with five stripes not three, retails for €299 ($345). Martullo’s pledged to “exhaust all legal avenues” to overturn the decision, he said in a post on LinkedIn.

–With assistance from Allegra Catelli and Tim Loh.

(Adds details on potential legal challenge from 19th paragraph)

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