Swiss Made - Swiss Courts' Interpretations of "Swiss Made"

Swiss Courts' Interpretations of "Swiss Made"

The current legislation contains only very generally formulated conditions which must be met for using a ‘made in Switzerland’ designation. With the exception of watches, no concrete criteria exist regarding when and by whom a 'made in Switzerland’ designation can be affixed to a product and when it cannot. Appropriate criteria have only been developed by individual cantonal courts up until now.

Products are, however, sold which are not 100% Swiss-manufactured. In such cases, the actual legal practice is based on the rules laid down in Article 48 of the Trademark Law and a 1968 ruling issued by the trade court of St. Gallen, reiterated in 1992. These court rulings outline the conditions for the legal use of the designation “Swiss Made” and similar designations, especially for goods not manufactured in Switzerland in their entirety. In pertinent part the case law holds:

“Products are considered Swiss products if they are fundamentally local products or if they have been completely manufactured in Switzerland. In the case of products that have been only partly manufactured in Switzerland, the rule applies that the Swiss portion of the production cost (including basic materials, semi-finished products, accessories, wages and production overhead excluding distribution costs) must be at least 50%. However, this 50% portion is not the sole criterion for determining the Swiss origin of a product. The origin of the essential components and the manufacturing process through which a product obtains its characteristic features, and – in borderline or doubtful cases – the origin of the intellectual property embodied in the product and the special circumstances in the respective industry must also be taken into due consideration.”

Accordingly, there are two conditions that must be fulfilled for goods to be legally labeled as being of Swiss origin:

• The Swiss portion of the production cost must be at least 50%.
• The most important part of the manufacturing process must have taken

place in Switzerland. The “most important part of the manufacturing process” is that part of the process that results in a completely new product. The determining factor here is that the original characteristics of the goods are lost through the manufacturing process, and the possible application of the goods is different from that of the basic materials of foreign origin used in their manufacture. In addition, the origin of goods is determined by the place where they are produced, not by where the idea for producing these goods was conceived. A product manufactured in Switzerland under a foreign license will still be Swiss in origin, while a product manufactured abroad using Swiss recipes or Swiss methods will still be foreign in origin.