Secured interests in property are recognized and enforced, and mortgages are widely used. The legal system protects and facilitates the acquisition and disposition of all property rights. Switzerland is a member of the major international intellectual property rights conventions and was an active supporter of a strong IPR text in the GATT Uruguay round negotiations. Switzerland has one of the best regimes in Europe for the protection of intellectual property and protection is afforded equally to both foreign and domestic rights-holders.
Patent protection is broad, and Swiss law provides rights to inventors that are generally similar to those available in the United States. Switzerland is a member of both the European Patent Convention and the Patent Cooperation Treaty (PCT), making it possible for inventors to file a patent application in the United States (or other Patent Cooperation Treaty country, or any member of the European Patent Convention) followed by an application with either the PCT office or the Swiss patent office to receive harmonized protection in Switzerland. If filed in Switzerland, patent applications must be made in one of the country’s three official languages (German, French, Italian), and must be accompanied by detailed specifications and, if necessary, by technical drawings. The duration of a patent is 20 years. Patents are not renewable beyond the original 20-year term, but patent term restoration is possible for products, such as pharmaceuticals, that require an extensive testing period prior to marketing. According to the Swiss Patent Law of 1954, as amended, the following items cannot be covered by patent protection: surgical, therapeutic and diagnostic processes for application on humans and animals; inventions liable to disturb law and order and offend “good morals;” and biological processes for breeding species of plants and animals. In most other areas, coverage is similar to that in the United States. Should an American firm have concerns about possible patent infringement in Switzerland, access to the courts is readily available and there is a well-established and highly regarded patent bar. On June 22, 2007, the parliament adopted a revision of the Swiss patent law that provides for the protection of patents on bio-technologies and is EU compatible. This revision on biotechnical inventions entered into force on October 11, 2007.
While most “parallel imports” of products covered by copyright and trademark protection are subject to ‘international exhaustion’ treatment, patents until 2009 were subject to national protection, with exceptions for parallel imports of generic drugs under specific registration and safety guidelines and fertilizers and tractors from third countries.
In 2008, consumer and retail industry supporters in parliament pushed hard for regional exhaustion on patented products sold in the EU/EEA area, which are often cheaper since they bypass expensive Swiss distribution channels. This proposal met a lukewarm reception from the Federal Council and conservative political parties sympathetic to the Swiss pharmaceutical industry on the grounds regional exhaustion would weaken R&D investments in Switzerland. In December 2008, the parliament adopted the principle of regional exhaustion for patents, with an exception for pharmaceuticals, which are still subject to national exhaustion. Retail prices are expected to drop by 3.5-7.5% as a result of this measure.
The Swiss copyright law explicitly recognizes computer software as literary works and establishes a remuneration scheme for private copying of audio and video works, which distributes proceeds on the basis of national treatment. Owners of television programming enjoy significant protection and are remunerated for rebroadcast and satellite retransmission of their works, while rights holders have exclusive rental rights. Collecting societies are well established. Infringement is considered a criminal offense. The term of protection is life plus 70 years. In order to comply with the WCT and WPPT WIPO treaties Switzerland has already signed, the government proposed new amendments to the existing copyright law, which were adopted by parliament on October 5, 2007 and put into force on January 24, 2008. The audiovisual industry used this opportunity to express strong reservations against the scope of the exception for private copying, but later expressed satisfaction that the revised legislation still prohibits the circumvention of technological protection measures. However, the unauthorized downloading of multimedia content and the provision of that content to family members or friends for personal use is not prohibited. Public libraries and broadcast libraries are also allowed to sell the works they possess, which may contain multimedia content, to their patrons. These libraries have also been exempted from paying a copyright fee to the industry. The United States will continue to monitor the implementation of the legislation. The United States has also raised certain questions regarding potentially broad mandatory licensing provisions governing research tools, in the context of pending Swiss patent law amendments.
Under Swiss law, anyone found guilty of infringing the copyright laws can be fined up to several thousand francs and, in extreme cases, face imprisonment. Making an illegal copy with the aim of selling or sharing it without authorization is against the law. Internet providers or joint patent holders can also be considered as accomplices if they fail to carry out the required measures to prevent such illegal sales, but many experts believe it is not easy to trace offenders. In general, Swiss legislation applies to illegal acts committed within Switzerland’s national boundaries, which means that a Swiss user knowingly purchasing or downloading pirated audiovisual work from a foreign website cannot be prosecuted by the authorities. Downloading or copying a file from the internet for purely private purposes is allowed, and these files may be passed to friends and family members. The industry is particularly concerned that there is little willingness among consumer groups and the government to narrow the scope of personal use to avoid blatant abuse.
The primary concerns of the industry with regard to the changes are: 1) the revision widens the scope for exemptions, thus depriving the copyright owners of their rights; 2) the collection of royalties through the collecting societies is inadequate because it only provides 60% of the royalties to the producers who use these funds to subsidize Swiss artists; and 3) the revision offers little protection to the industry digital encryption programs (DRMs) as a result of the wide Swiss definition of “private copying”. Public broadcasters will also be allowed to keep industry performances in their archives and charge individual users for access, thus bypassing the industry’s online sales.
According to the Business Software Alliance (BSA), software piracy continues to be a significant problem. This appears to be due substantially to illegal copying by individuals and some small and medium-sized establishments. However, software piracy appears to have decreased in recent years, with the rate of software piracy in Switzerland falling from 26% of the market in 2007 to 25% in 2008 (a loss reduction equivalent to an estimated SFr 53 million). However, the industry estimates that CD/DVD piracy across Europe is on average even higher at 35%.
The Swiss audiovisual industry lobby (SAFE) started a campaign in 2005 entitled “stop-piracy” aimed at suing individual users in order to increase the awareness of the legal risks and potential lawsuits associated with piracy. The International Federation of the Phonographic Industry (IFPI) has sued 300 Swiss internet users over the past two years to enforce its rights. After the lawsuit is filed, if the Swiss investigating judge determines there is a copyright violation, a legal assistance request is forwarded to the Special Tasks Unit of the Swiss Federal Department of Justice and Police, which forces the internet access provider to provide the full details of the fraudulent customer. The procedure is costly and was recently criticized by the Federal Data Protection and Information Commissioner (FDPIC), who said that tracking IP addresses was illegal since it violated the principle of “telecommunication secrecy”. In June 2008, the FDPIC asked a Swiss company to stop tracking IP addressee because it contravened existing Federal Data Protection Law. When the company refused to do so, the FDPIC appealed the request to the Federal Administrative Court. A final ruling on this matter is still pending.
In May 2008, the European Commission reported that 2% of pirated goods entering the EU were transiting through Switzerland, a marked drop from the 5% reported in 2006. The EU estimates that Switzerland is the primary source of illegal medicines entering the EU (39.2% of the medicine seizures). However, Switzerland is not on the EU list of IPR priority countries.
Trademarks are protected. Switzerland recognizes well-known trademarks and has established simple procedures to register and renew all marks. The initial period of protection is 20 years. Service marks also enjoy protection. Trademark infringement is relatively rare in Switzerland, since there are few street vendors are few and those tend to avoid illegitimate or gray market products.
The government agreed on June 25, 2008 to propose an amendment of the Federal Law on Technical Barriers to Trade to permit implementation of the EU “Cassis-de-Dijon” principle. The proposed revision has not yet been debated in parliament. If adopted, all EU products could be imported into Switzerland without having to go through the burdensome Swiss certifications and Swiss languages requirement. Given that retail prices in Switzerland are 20-30% higher than in the EU, the government believes that domestic prices could drop by 10% through importation of EU products under streamlined Swiss regulations. Possible opt-outs to the Cassis-de-Dijon Principle have already been reduced from 129 to 40 products, but hurdles on the remaining products — such as the Swiss regulations on the labeling of alcohol contained in Alcopops and the Swiss ban of phosphates in washing machine powders — still remain.
Switzerland offers significant protection for layout designs of semiconductor integrated circuits, trade secrets, and industrial designs. Protection for integrated circuits and trade secrets is generally similar to that available in the United States, and protection for designs is somewhat broader. Because of the complexities involved in ensuring protection in each of these areas, individuals and corporations seeking protection are advised to engage the services of a lawyer specialized in these fields.
To bring Switzerland into conformity with its TRIPS commitment dating from the WTO Uruguay Round, Swiss authorities have established a 10-year protection period for test data submitted as part of the pharmaceutical approval process.
Protected Designation of Origin – Switzerland and the EU both recognize Protected Designation of Origin (PDO labels) as an “essential element” in the liberalization of agricultural products, and are currently negotiating a bilateral recognition agreement on designations of origin. Currently, labels awarded to wines and spirits are recognized under WTO rules. To date, 21 products already benefit from the PDO label.
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