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Advantages of IP Portfolio Management From Switzerland

By John Moetteli, Esq., US Patent and Trademark Attorney-at-law, Da Vinci Partners LLC, Switzerland. © 2009 - 2015

Take a company like IBM, Tyco International, or Semtech, global companies, leaders in their fields. Where do they choose to place and manage some or all of their most valuable intellectual property? New York? California? Delaware? Perhaps to some extent, but not exclusively. They have chosen Switzerland, what some would consider an unlikely base from which to manage a precious asset. Yes, there are legitimate, significant and even compelling reasons to choose Switzerland as a base from which to manage your intellectual property, whether you're a small enterprise or a large multinational. This article explores the most significant reasons for choosing attorneys based in Switzerland to manage your IP portfolio. 1

Probably the most common reason for basing a company’s IP management function in Switzerland is to operate an IP holding company, which licenses IP to a parent or members of a group for a royalty, which is taxed at local, often negotiated tax rates. read more

When a parent corporation creates a holding company to hold IP and other assets for the benefit of subsidiary operating companies of a group, the intellectual property is essentially quarantined from legal claims (e.g., product liability claims) filed by the clients and business partners of the operating companies which exploit the IP. read more

Switzerland has a developed legal system and a long and recognized experience with arbitration and mediation in resolving otherwise costly legal disputes. Many of the world’s best arbitrators are located in Switzerland. read more

Foreign judicial discovery orders are carefully scrutinized by the Swiss authorities before being executed by these Swiss officials (which unlike in the U.S., are not lawyers paid by the other side)9. Collection of evidence in Switzerland, by way of pretrial discovery or otherwise, for any kind of foreign proceedings without the participation and consent of Swiss officials is considered a violation of Swiss sovereignty and may lead to criminal sanctions being imposed on the party seeking the discovery. read more

Switzerland is a member of all major international treaties, in particular the IP treaties, including the Paris Convention, the Berne Convention, the Madrid Agreements, the Patent Cooperation Treaty, and the Hague Agreement. Through adherence to these treaties, Swiss entities are able to register IP rights in a large number of jurisdictions through a centralized registration system, thereby avoiding the need of hiring attorneys in the jurisdictions in which protection is sought. read more

Miscellaneous Reasons

Switzerland is a multilingual country, a microcosm of the world, and so, Swiss professionals are better trained to manage things international. Switzerland is the home of the World Intellectual Property Organization (i.e., the World patent office) and is two hours drive away from the European Patent Office, which makes dealing with these authorities less costly. Switzerland's people have a high level of education, making finding skilled employees easier than in other countries. Switzerland’s financial and legal system makes holding financial assets in Switzerland more secure and reduces the legal risks of performing research and development activities here. Switzerland's breathtaking scenery and higher education system makes for a pleasant work environment, helping companies attract key people, whether talented researchers or wealthy businessmen. 15 This also makes any reason for spending time in Switzerland more appealing, evidenced by the fact that Switzerland has already enticed many of the world’s billionaires and movie stars to make Switzerland their new home.


Because it offers significant advantages over holding IP in the home country of the IP owner, Switzerland warrants serious consideration as a base from which a company’s intellectual property portfolio is managed. Centralized management and flexible Swiss IP law, together with a business-friendly legal system, make managing IP from Switzerland efficient, secure and no-hassle. The country itself is a favorite destination of the world's wealthy, and so offers an attractive setting for such persons to conduct business. In sum, it is difficult to find a more strategic home for a company’s critical IP assets than Switzerland.


1 Do check the actual credentials of your attorneys before engaging them, should you use them to manage your IP portfolio. Most are very competent but when it comes to managing your offshore IP portfolio, an attorney(at-law) with formal legal training is probably best for handling confidential advice and other sensitive matters, as well as for giving you unbiased advice on issues that in the client's best interest.

2 On the other hand, unless the license to a group member is exclusive and includes the right to sue to collect for lost profits, by placing the IP in a passive holding company that does not promote products protected by the IP, the group may lose the ability to recover lost profits from infringers—rather, recovery of damages from infringers will likely be limited to a reasonable royalty, under the Poly-America doctrine. Poly- America, L.P. v. GSE Lining Technology, Inc., 383 F.3d 1303, 1310-12 (Fed. Cir. 2004). Whether this is an issue in creating an IP holding company depends on the goals of the group. If the goal of the group is to maximize possible revenue form enforcing intellectual property beyond all other goals (like providing a safe haven for the group’s IP and minimizing litigation risk), then perhaps forming an IP holding company should be reconsidered. Nevertheless, even under these circumstances, the IP holding company can argue that the value of the patents held was in excluding competitors for the group members, not in licensing the rights to them, and that that the operating company received the benefit of its wholly owned subsidiary’s profits, there would be a strong argument that the IP holding company that also enforces IP rights on behalf of its group operating companies is entitled to recover lost profits on behalf of the group. Case of the US Court of Appeals of the Federal Circuit recognize the guiding principle of the patent statute to award an amount sufficient to compensate the plaintiff for all the harm caused by the infringement. See, e.g., King Industries Corp. v. Perego, 65 f.3D 941, 947 (Fed. Cir. 1995); Rite-Hite Corp. v. Kelly Co.

3 These issues are described in Lawrence Collins, Essays in International Litigation and the Conflict of Laws—The Hague Evidence Convention and Discovery: A Serious Misunderstanding (1994); Bundesamt für Justiz, Rechtshilfeführer— Praktischer, Führer Zur Internationalen Rechtshilfe in Zivil—Und Strafsachen [Federal Office of Justice, Guide to Legal Assistance—Practical Guide on International Legal Assistance in Civil, and Criminal Matters] (7th ed. 2002)(amended Feb. 2004), available at http://www.ofj.admin.ch/rhf/d/services/allgemein/rechthil.pdf

4 See Code of Civil Procedure of the Canton of Zürich (ZH-CCP) §§ 115, 183, 148.

5 See Code of Civil Procedure of the Canton of Zürich (ZH-CCP) §§ 163(2).

6 See Art 332, Swiss Code of Obligations.

7 US patent firms can offer direct services only through separate offices and so cannot benefit from the efficiency and synergy that managing such cases under the same roof provides.

8 Da Vinci Partners LLC is one of the few, but not the only such firm. Consequently, a client who is aware of the advantages of using such a firm and so seeks such a firm out, is likely to receive the band-width of attention they need from these service providers to properly manage their intellectual property.

9 Evidence is taken by the judge. If a party fails to give evidence in a civil case, the court may draw inferences adverse to the non-disclosing party, but cannot impose criminal sanctions. See Code of Civil Procedure of the Canton of Zürich (ZH-CCP) §§ 115, 183, 148.

10 Punitive damages are considered contrary to the Swiss ordre public. Dörig, supra note 1, at 356, 360; Felix Dasser, Punitive Damages: Vom "Fremden Fötzel" zum "Miteidgenoss" [Punitive Damages: From Stranger to Co-Confederate], 96 Schweizerische Juristenzeitung [Swiss Law Review] 108 (2000); Decision of the civil court of Basle of February 1, 1989 in the matter of S.F. Inc. v. T.C.S. AG, Basler Juristische Mitteilungen, 31 (1991). See Christian Lenz, Amerikanische Punitive Damages vor dem Schweizer Richter [American Punitive Damages before

11 Such actions are more likely to be considered administrative or criminal in nature. Beweisaufnahme [International Legal Assistance in Civil Matters: Service and Evidentiary Assistance], in Paolo Bernesconi et al, , Assistenza Giudiziaria Internazionale in Materia Civile, Penale, Amministrative ed Esecutiva [International Legal Assistance in Civil, Criminal, Administrative and Execution Matters] 25 (1999); BB1 1993 III 1265.

12 Richard Frank et al., Kommentar Zur Züricherischen Zivilprozessordnung [Commentary to the Code of Civil Prodedure of the Canton of Zürich], preliminary remarks to § 133 ss., at 16 (3d. ed. 1997) at ZH-CCP § 159.

13 See Article L. 612-9 of the Code de la Propriété Intellectuelle français--however, this requirement is considered by many invalid under GATT TRIPS. In addition, German law forbids filing German state secrets abroad. German state secrets are defined as facts and knowledge accessible to a limited number of people whose relevation would damage the external security of the German nation §93 Nr. 1 Strafgesetzbuch (StGB)(Ger.), translated in Joseph J. Darby, The Penal Code of the Federal Republic of Germany 118 (1987). Therefore, this covers almost all militaryrelated inventions the details of which are known by only a few. As for the UK, filing applications abroad on military technology, or technologies that could harm national security or public safety is prohibited under Section 23 of the UK Patents Act.

14 Handbook on European Intellectual Property Management, Why File in the United States First, Chapter 7.7, Kogan Page and the European Patent Office (July 2009).

15 IBM Rüschlikon has attracted several Nobel Price winning researchers for its European headquarters near Zürich.

About The Author

John Moetteli is an International patent attorney and managing attorney of Da Vinci Partners LLC (www.davincipartners.com), an IP firm in Switzerland specializing in preparing and filing U.S. and European patent applications for global clients. He has advised clients as adjunct faculty. Besides his almost 20 years total IP experience, Mr. Moetteli has more than 15 years experience filing U.S. patent applications directly from Europe. Readers interested in setting up an IP holding company in Switzerland or to discuss managing their IP portfolio from Switzerland are invited to request further information via contact form. Note that although this article is subject to copyright, the author does not object to reproduction of this article provided it is copied and distributed in its entirety including footnotes.

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