Switzerland: Swiss Federal Supreme Court Issues Two Landmark Decisions Concerning the Issue of Likelihood of Confusion With Respect to Domain Names Incorporating Names of Cities or Municipalities Without Their Consent

In July of this year, the Swiss Federal Supreme Court handed down the "luzern.ch" and the "montana.ch" decisions. Both decisions involve public corporations, a city in the former and a municipality in the latter case. The highest Swiss court decided – for the first time – the following controversial issues: a) the relevance of the content of a website for the likelihood of confusion caused by a domain name, and b) the question whether the plaintiff in a domain name action is entitled to a court order transferring the domain name to him based on his better rights.

Both decisions were decided by the same panel. The new decisions of the Swiss Supreme Court bring some stability to domain name disputes involving cities and municipalities having evolved only recently with public corporations launching their Internet presence.

The defendant in the "luzern.ch" decision, a private company, registered the domain name "luzern.ch" with the Swiss registry for the country-code top-level domain (ccTLD) "ch". When the city of Lucerne ("Luzern" in German) prepared its Internet presence it realized that the domain name "luzern.ch" was already in use by defendant. The city of Lucerne filed a lawsuit successfully requesting the transfer of the domain name in the first two instances (district and appellate court). Defendant then brought the issue before the Supreme Court.

The public corporation involved in the "montana.ch" decision was a municipality in the western part of Switzerland. The defendant was a private school with "Montana" as part of its name. The court had to decide the same issues as in "luzern.ch" with the difference that defendant did have a legitimate interest in its registered domain name. An additional issue here was the identity of the names of the parties in dispute about the domain name "montana.ch".

The Court held in both cases that the name of a city or municipality is not – as opposed to the designation of a region like "Bernese Oberland" – a geographic term in the public domain. The name of a public corporation is subject to name protection pursuant to article 29 of the Swiss Civil Code.

The scope of protection of the name of a public corporation is determined by the degree of notoriety. The better known the city the higher is the likelihood of confusion caused by the use of such name by an unauthorized third party. Chances are that the use of the name of a city or municipality as domain name will cause misleading associations in the public mind.

In the "montana.ch" decision the Court differentiated the likelihood of confusion issue due to the identity of the names of plaintiff and defendant. The Court undertook an overall weighing of the interests of the parties. Hence, the prior registration of the domain name was not decisive. The Court observed that the municipality Montana was better known to the public than the private school. As a result, the Court found that the municipality had better rights to the domain name "montana.ch".

To determine the likelihood of confusion caused by a domain name the Court solely relied on the domain name itself. The Court did not consider the content of the web site and thus voiced its opinion on an existing debate. Likelihood of confusion already arises when the domain name causes associations in the public mind to the protected name.

The Court held in "luzern.ch" that the private company infringed the rights to the name of the city of Lucerne. Hence, it ordered defendant to provide the domain name registry SWITCH for the ccTLD "ch" with the necessary declarations to enable the transfer of the domain name to the plaintiff. In other words, the Court decided in favour of the possibility to order the transfer of the domain name instead of just ordering cancellation of the registration of the defendant. This holding contrasts with the recent "shell.de" decision of the German Supreme Court where the court held that only cancellation of the domain name could be ordered by the court.

Today, – as opposed to the practice at the time of the discussed decisions – the practice of the Swiss registry for the ccTLD "ch" is that only authorized entities may register a domain name incorporating the name of a city or municipality. Furthermore, the Federal Office of Communications issued a draft of an ordinance regulating the requirements for the allocation of the second-level domains for the ccTLD "ch". The ordinance draft provides that names of cities and municipalities will only be registered upon proof of a legitimate interest in the name.

The Supreme Court decided that the domain names "luzern.ch" and "montana.ch" belong to the city of Lucerne and the municipality Montana and ordered the transfer of the domain names from the unauthorized third parties. The Court took the opportunity and decided some controversial issues in connection with domain disputes in general. In Switzerland, the likelihood of confusion of a domain name is based solely on the domain name itself. The content of the respective website is not taken into consideration for that purpose. Furthermore, the plaintiff can request the transfer of the domain name. This is a significant difference from Germany where pursuant to a recent Supreme Court decision only cancellation of the domain name can be obtained.