Fireball backfires - Gowling WLG successfully defends trademark of Swiss producer of orange liqueur

07 December 2016

Studer had registered the brand "Fireball" as an IR-mark, comprising Germany. It is distributing certain quantities of the liqueur in Germany, too. The Americans claimed that the brand wasn't used at all in Germany and sued Studer, aiming at a deletion of the trademark. Studer, however, argued that the brand had been used for decades in Switzerland. And this is where the bilateral contract between Germany and Switzerland comes into effect, dating back to 1892. As per this contract, the usage of the trademark in Switzerland is sufficient to provide the cause for its validity in Germany. In other words: if the trademark is being used in Switzerland, it counts as being used in Germany, too. Sazerac, in contrast, argued that the EU law would annihilate the bilateral contract, which consequently would mean it couldn't be applied.

The Munich district court did not follow this argumentation. Despite the fact that the provisions for use requirements are fully harmonised within the EU, Switzerland could not be deprived of its rights which result from bilateral contracts with EU member states. The other objections of the plaintiff were also rejected as unfounded. Finally, the court fully dismissed the action.

The crux, however, is that the spirits heavyweight Sazerac is still selling its own whiskey-liqueur, equally called "Fireball", in Germany. Whether Sazerac will be able to continue selling the product - given the fact that the validity of the trademark has been confirmed for Germany - is a question the company will be facing soon. In Switzerland, where Studer has also priority rights for the brand, at least Sazerac's distributor has already undertaken a cease-and-desist declaration and paid damages.

"The Fireball lawsuit backfired", is most likely what the Americans from Sazerac might now think. The first-instance judgement of the Munich district court is not yet legally binding.

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