Exhibit (10)-3
TRADEMARK AGREEMENT
Trademark Agreement executed as of this 18th day of December, 1996 by
and between the Swiss Confederation represented by the Federal Military
Department represented by the Federal Defence Production Group ("BRBT") and
Swiss Army Brands, Inc. ("SABI") a corporation existing under the laws of the
state of Delaware, U.S.A.
WHEREAS, it is in the mutual interest of the parties, and of Swiss
manufacturers and other citizens of the Swiss Confederation that the trademark
SWISS ARMY be confined to a select number of high quality products manufactured
in Switzerland; and
WHEREAS, in the past certain persons have attempted to utilize the
trademark "SWISS ARMY" on products manufactured in Asia and on other
unauthorized goods, thereby misleading purchasers into believing that such
products represent the high quality of workmanship and materials present in
goods of Swiss manufacture; and
WHEREAS, SABI has sold over $650,000,000 of Swiss made products, the
vast majority of which was sold under the trademark SWISS ARMY; and
WHEREAS, SABI has expended over $25,000,000 in the development,
protection and promotion of the SWISS ARMY trademark and has developed a high
level of expertise in such protection; and
WHEREAS, the parties are desirous of protecting consumers and Swiss
manufacturers from misrepresentation as to the source of products bearing the
trademark SWISS ARMY; and
WHEREAS, the parties wish to further the mutual interests set forth
above while respecting existing rights; and
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained the parties hereto hereby agree as follows:
SECTION 1. INITIAL PAYMENT.
In order to facilitate the purposes of this Agreement and in
consideration of the matters set forth in Section 5 of this Agreement and
elsewhere, SABI will, upon the execution of this Agreement, commit to the
furtherance of its purposes the amount of * . Of this amount * will be paid to
BRBT at the time of the signing to be used for such purposes as BRBT shall
determine. The remaining * will be utilized during the first year of this
Agreement by SABI to assist BRBT in the registration of the BRBT Trademarks in
various jurisdictions as well as to assist BRBT in the policing of the BRBT
Trademarks. In the event * is not utilized in such manner during the
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* Information redacted. Omitted material has been filed with the
Commission in a separate filing pursuant to a request for
confidential treatment.
first year of this Agreement, SABI shall pay to BRBT the difference between *
and the amount so utilized.
SECTION 2. DEFINITIONS. For purposes of this Agreement the
following definitions shall apply.
(a) ADDED AMERICAN CATEGORIES shall have the definition
ascribed to that term in Section 5(d)(i) hereof.
(b) AMERICAN TERRITORIES shall mean the United States, its
territories and possessions, Canada and the Caribbean. The Caribbean shall
include Bermuda and all islands, countries and territories within the area
bounded by 55 degrees west longitude, 85 degrees west longitude, 12 degrees
north latitude and 28 degrees north latitude provided that the Caribbean shall
not be deemed to include any portion of Mexico or the Countries located in
Central or South America.
(c) BRBT TRADEMARKS shall mean the following: (i) Trademark
No. 411 840 consisting of the words "Swiss Army" and the Swiss National Emblem
registered in Switzerland by BRBT and depicted on Schedule A hereto, (ii) if
assigned to BRBT pursuant to Section 4(a) hereof, the Wreath Trademark, (iii)
the trademark consisting solely of the words "Swiss Army," (iv) the Subsequent
Registrations, if any, and (v) any and all other trademarks at any time owned by
BRBT which include the words "Swiss Army" or words confusingly similar thereto.
(d) COMMERCIAL QUANTITIES shall mean products in a particular
Designated Category having been sold by a single manufacturer or importer in
normal channels of commerce and not solely for test marketing purposes.
(e) WREATH TRADEMARK shall mean the trademark consisting of
the words "Swiss Army" and the wreath logo for which SABI, through a
wholly-owned subsidiary, has applied with the Swiss Federal Office for
Intellectual Property for registration which application is known as application
no. 6250/1994.0, date of request 9/8/94 as depicted in Schedule A-1.
(f) THE DESIGNATED CATEGORIES shall mean the following
products which SABI intends to market under the SABI Trademarks:
(i) Luggage;
(ii) small leather goods;
(iii) boots and footwear;
(iv) camping equipment;
(v) pens and pencils;
(vi) flashlights;
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* Information redacted. Omitted material has been filed with
the Commission in a separate filing pursuant to a request for
confidential treatment.
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(vii) water purification products;
(viii) cosmetics and fragrances; and
(ix) apparel.
Each of the designations separately listed above shall be considered a separate
"Designated Category".
(g) FIRST QUALITY shall mean products at least equal in
workmanship and materials to either the Watch Products or Knives currently sold
by SABI, Victorinox or Wenger.
(h) SABI shall mean Swiss Army Brands, Inc. and shall also
include Swiss Army Brand Ltd., a Delaware Corporation and a wholly-owned
subsidiary of Swiss Army Brands, Inc.
(i) SABI TRADEMARKS shall mean the Registered SABI American
Trademark and the trademarks, including applications, held by SABI listed in
Schedule B hereto.
(j) KNIVES shall mean multi-blade pocket knives (including
so-called "multitools") manufactured or licensed by Victorinox or Wenger.
(k) NET SALES shall mean the gross selling price of licensed
products less V.A.T. and similar taxes or imposts, insurance, freight, discounts
and allowances actually given and returns actually received.
(l) PRECISE shall mean Precise Imports Corporation, a New
York Corporation which is Wenger's United States Distributor.
(m) REGISTERED SABI AMERICAN TRADEMARK shall mean the
trademarks listed on Schedule C hereto.
(n) RESERVED PRODUCTS shall mean Watch Products, Knives,
products in the Added American Categories, and products in the Designated
Categories provided, in the case of products in the Designated Categories the
right of SABI to cause such product categories to become Added American
Categories has not expired (without giving effect to the operation of Subsection
5(d)(v)(B)).
(o) STANDARD ROYALTIES shall mean an amount equal to 3% of
the "Net Sales".
(p) SUBSEQUENT REGISTRATIONS shall have the meaning ascribed
to that term in Section 4(c) hereof.
(q) SWISS MANUFACTURERS shall mean Victorinox and Wenger.
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(r) SWISS PRODUCT shall mean any product which, under the laws
of Switzerland as presently constituted or as enacted in the future, or
according to normal Swiss standards, may be denominated "Swiss Made" or "Made in
Switzerland".
(s) SWISS MARTIAL TRADEMARK shall mean any words, trademarks
or trade names, other than "Swiss Army", consisting of two or more words or
syllables, one of which is "Swiss", "Switzerland" or a derivation thereof and
another of which is a word or phrase with a military connotation, e.g. "Swiss
Sailor", "Swisstrooper".
(t) VICTORINOX shall mean Victorinox A.G. of Ibach,
Switzerland.
(u) WATCH AND SUNGLASS PRODUCTS shall mean watches and other
timepieces as well as sunglasses which, in each case, are Swiss Products.
(v) WENGER shall mean Xxxxxx X.X. of Delemont, Switzerland.
SECTION 3. ACKNOWLEDGEMENT BY SABI AND BRBT.
(a) SABI acknowledges BRBT's ownership of the BRBT Trademarks
in the country of their registration or application and acknowledges that in the
country of their registration or application, BRBT has the exclusive right to
use the BRBT Trademarks and that any goodwill pertaining thereto belongs
exclusively to BRBT. SABI will not in any way directly or indirectly do or cause
to be done any act or thing contesting, challenging or in any way impairing or
intending to impair any right, title or interest of BRBT in connection with any
of the BRBT Trademarks in the country of its registration or application. It is
the declared intention of SABI to use all reasonable efforts to assist BRBT in
enforcing such rights.
(b) BRBT acknowledges SABI's ownership of the SABI Trademarks
in the countries of registration or application and acknowledges that SABI has
the exclusive right to use the SABI Trademarks in such countries and that the
goodwill pertaining thereto belongs exclusively to SABI. BRBT will not in any
way directly or indirectly do or cause to be done any act or thing contesting,
challenging or in any way impairing or intending to impair any right, title or
interest of SABI in connection with the SABI Trademarks in the countries of
their registration or application. It is the declared intention of BRBT to use
all reasonable efforts to assist SABI in enforcing such rights provided that
BRBT shall not be required to support SABI in enforcing exclusive rights to the
Swiss National Emblem, as distinguished from the words "Swiss Army" (whether or
not such words are used in conjunction with such emblem).
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(c) BRBT and SABI recognize that the use of Swiss Martial
Trademarks represents an effort to capitalise upon the success of the trademark
SWISS ARMY and that such use can dilute the value of the trademark SWISS ARMY to
the detriment of the Swiss Confederation as well as of SABI and agree to
cooperate in preventing such use.
SECTION 4. ADDITIONAL REGISTRATIONS.
(a) WREATH TRADEMARK. SABI shall assign to BRBT the Wreath
Trademark application, if required for the registration of such trademark, and
BRBT agrees to use its best efforts to obtain a registration pursuant thereto.
(b) REGISTRATION OF "SWISS ARMY". BRBT agrees to promptly
apply for a trademark registration in Switzerland for the trademark consisting
solely of the words "Swiss Army" and use its best efforts to obtain a
registration of that xxxx.
(c) SUBSEQUENT REGISTRATIONS. BRBT agrees to promptly apply
for up to three additional trademark registrations ("Subsequent Registrations")
in Switzerland for such trademarks requested by SABI consisting of the words
"Swiss Army" and such logo or depiction specified by SABI; provided that such
trademark is not violative of applicable law.
(d) EXPANSION OF COVERAGE. BRBT will expand the products and
services covered by the BRBT Trademarks as set forth in Section 7 hereof.
SECTION 5. THE AMERICAN TERRITORIES.
(a) KNIVES. The parties acknowledge that Victorinox and Wenger
have applied for the registration of the trademark "Swiss Army" as applied to
Knives in the United States and hold common law rights to that trademark in the
United States. The parties are aware that the Swiss Manufacturers have licensed
SABI and Precise to use that trademark. Subject to the provisions of Section 12
hereof, relating to costs, the parties declare their intention to assist the
Swiss Manufacturers, SABI and Precise in safeguarding those rights and in
preventing the use of "Swiss Army" on multi-blade pocketknives, multitools and
other products which are not Swiss Products.
(b) WATCH AND SUNGLASS PRODUCTS. As previously herein stated,
BRBT recognizes the rights of SABI in the Registered SABI American Trademark,
including, without limitation, its rights in respect of the Registered SABI
American Trademark as applied to Watch and Sunglass Products. BRBT will use all
reasonable efforts to assist SABI and its licensees in strengthening and
protecting those rights in the American Territories and assist SABI in
preventing the unauthorized use of SWISS ARMY.
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(c) BRBT COOPERATION. In furtherance of the general purposes
of this Agreement to strengthen the trademarks and to prevent the unauthorized
use of SWISS ARMY on products that are not Swiss Products, BRBT agrees:
(i) It will not apply for registration, license or
otherwise facilitate the use of any of the BRBT Trademarks in the American
Territories except as provided herein; and
(ii) At SABI's request and expense, it will register
any BRBT Trademark requested to be registered in the American Territories. Upon
such registration, and without further documentation, SABI shall hold a
perpetual royalty free (subject to the requirement to make the payments
otherwise required by Section 1) exclusive license applied to Watch and Sunglass
Products.
(d) DESIGNATED CATEGORIES AND OTHER PRODUCTS.
(i) If within three years of the date of this
Agreement SABI and/or its licensees shall sell in the American Territories,
Commercial Quantities of Swiss Products in any one or more of the Designated
Categories SABI shall so notify the BRBT and upon such notification such
category or categories shall become "Added American Categories".
(ii) If requested by SABI (and only if so requested)
BRBT will, at SABI's expense, register any BRBT Trademark requested to be
registered in the American Territories in respect of any Added American Category
and will grant to SABI a perpetual royalty free exclusive license to use the
BRBT Trademarks in the American Territories and the rights and obligations of
the parties with respect thereto shall be the same as those applying to Watch
and Sunglass Products.
(iii) In the event that within 24 months of any
Designated Category becoming an Added American Category, SABI and/or its
licensees shall sell in the American Territories in Commercial Quantities Swiss
Products in another of the Designated Categories and shall so notify BRBT, such
additional Designated Category shall become an Added American Category.
(iv) In recognition of SABI's legally established
trademark rights in the American Territories and in part consideration for the
payment referred to in Section 1 hereof BRBT agrees that it will not grant any
rights to any of the BRBT Trademarks in the American Territories to any person
other than SABI or permit any person other than SABI to use SWISS ARMY on any
products in the Designated Categories except as set forth in the immediately
following subsection.
(v) BRBT may grant licenses to use the BRBT
Trademarks in the American Territories on products other than Reserved Products
provided that:
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(A) BRBT has determined that the grant of rights to such
person or entity will (x) enhance and not reduce the value of SWISS ARMY as
applied to Swiss Products already being sold under that trademark, (y) not
detract from the purpose of this Agreement to prevent the use of SWISS ARMY on
non-Swiss products, and (z) increase, over the long term, the amount of Swiss
Products sold in the American Territories and elsewhere. In making such
determination BRBT shall give priority to upholding the image of SWISS ARMY as
being associated with prestige, quality and wholesomeness and shall also
consider the market at which the product sought to be licensed is aimed. In
making such determination the objections made by SABI or any other person
authorized to use SWISS ARMY pursuant to this Agreement shall be given great
weight, and
(B) such rights are granted after SABI has received
notification of BRBT's intention to license that category to another party and
been granted the right for an additional period of 18 months to cause that
category to become an Added American Category by making sales in Commercial
Quantities.
(vi) In the event BRBT grants any rights to a party
other than SABI pursuant to Section 5(d)(v) above, SABI shall offer such party a
license of the appropriate Registered SABI American Trademark upon mutually
agreeable terms and conditions. Any royalties received by SABI under this
subsection, net of enforcement and other expenses, shall be paid to BRBT.
SECTION 6. GEOGRAPHICAL AREAS OUTSIDE OF THE AMERICAN
TERRITORIES.
(a) KNIVES. Except as set forth in Section 5(a) above, this
Agreement shall not apply in any way to the use of "SWISS ARMY" on knives
outside of the American Territories.
(b) WATCH AND SUNGLASS PRODUCTS. Subject to any now existing
legal rights of others, BRBT hereby agrees that at SABI's request it will grant
to SABI an exclusive perpetual license for Watch and Sunglass Products at the
Standard Royalty in such jurisdictions as SABI shall request and will, at SABI's
request (and only at SABI's request) and expense, register any BRBT Trademark
requested to be registered in such jurisdictions where it is not already
registered. Upon such request and without further documentation, SABI shall hold
a perpetual exclusive license applied to Watch and Sunglass Products. The
parties will also cooperate in preventing the unauthorized use of SWISS ARMY on
Watch and Sunglass Products.
(c) DESIGNATED CATEGORIES AND ADDED AMERICAN CATEGORIES. As to
each jurisdiction outside of the American Territories BRBT will, at SABI's
request, grant to SABI an exclusive license at the Standard Royalty to use the
BRBT Trademarks in such territory on products in the Designated Categories or
Added American Categories and will register any BRBT Trademark requested to be
registered, at SABI's request (and only at SABI's request) and expense, in
respect of such products. Upon such
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request and without further documentation SABI shall hold a perpetual exclusive
license applied to such products, provided that SABI and/or its licensees sell
goods in that category in such jurisdiction in Commercial Quantities within 18
months after such registration. In the event SABI and/or its licensees do not
make sales in Commercial Quantities within 18 months after such registration,
BRBT may consider granting a license of the BRBT Trademarks to another party
pursuant to Section 6(d)(ii) below.
(d) OTHER PRODUCTS.
(i) If BRBT wishes to grant to any person other than
SABI a license to use any BRBT Trademark on any product other than a Reserved
Product, it shall first offer to SABI an exclusive license to the BRBT
Trademarks on such product in such territory at the Standard Royalty. Such
license shall be perpetual provided that SABI and/or its licensees sells goods
in that category in Commercial Quantities in such jurisdiction within 18 months
after receiving such notification.
(ii) If SABI does not accept that offer or fails to
make such sales, BRBT may consider granting a license to the other applicant.
In deciding whether to grant such license to such other applicant BRBT shall
first determine that the grant of rights to such person or entity will
(A) enhance and not reduce the value of SWISS ARMY as applied to Swiss Products
already being sold under that trademark, (B) not detract from the purpose of
this Agreement to prevent the use of SWISS ARMY on non-Swiss products, and
(C) increase, over the long term, the amount of Swiss Products sold worldwide.
In making such determination BRBT shall give priority to upholding the image
of SWISS ARMY as being associated with prestige, quality and wholesomeness
and shall also consider the market at which the product sought to be licensed
is aimed. In making such determination the objections made by SABI or any
other person authorized to use SWISS ARMY pursuant to this Agreement shall
be given great weight.
SECTION 7. EXPANSION OF CLASSES.
At the request of SABI, BRBT will expand the products and
services covered by the BRBT Trademarks through additional registrations.
SECTION 8. TERMS OF LICENSE.
(a) In the event of any grant of a license in respect of any
BRBT Trademark whether to SABI or to any other party, the following provisions
shall apply:
(i) Such products including products sold by
licensees of SABI's rights hereunder, shall be Swiss Products of First Quality.
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(ii) The licensee shall, upon request, submit a
reasonable number of samples to BRBT to determine whether such products are of
First Quality. In the event that BRBT determines that such products are not of
First Quality, BRBT shall so notify the licensee, giving full particulars so
that the licensee may cause such products to be of First Quality.
(iii) In respect of any license for which Standard
Royalties must be paid, such royalties shall be paid no later than the end of
the calendar quarter following the calendar quarter in which the relevant sales
were made. Each such payment shall be accompanied by a report setting forth in
reasonable detail the amount of Net Sales and the method by which the standard
royalty was computed.
(iv) Notwithstanding anything herein to the
contrary, the license of any BRBT Trademark shall not be deemed to include,
and expressly excludes, the Swiss National Emblem.
(b) In the event of any grant of a license in respect of any
BRBT trademark to SABI, SABI may take such action as it deems appropriate under
all the circumstances to cause any infringement found to exist to be terminated.
Any suits on account thereof shall be controlled by SABI and shall be prosecuted
wherever possible in the name of SABI and by its counsel; and the expenses of
such suit shall be borne by SABI.
SECTION 9. DISPUTES.
Any dispute arising in connection with this Agreement shall
be resolved by arbitration, the seat of arbitration being Bern, Switzerland. The
arbitral tribunal shall consist of three arbitrators and the arbitration shall
be governed by the rules of the Intercantonal Arbitration Convention, March
27/August 29, 1969, excluding the rules of chapter 12 (International
Arbitration) of the Swiss Private International Law Act, December 18, 1987.
SECTION 10. NOTICES.
Any notices or other communications required or permitted to
be sent under this Agreement shall be duly given if sent by registered mail
return receipt requested or by facsimile transmission confirmed by mail within
three (3) business days of such transmission and addressed as follows:
(a) If to BRBT:
Defence Procurement Agency
Xxxxx Xxxxxxxxxx
Xxxxxxxxxxxxxxx 00
XX-0000 Xxxx, Xxxxxxxxxxx
Attention: Xxxxxx Xxxx, Esq.
Corporate Legal Counsel
FAX: 0000-000-000-00-00
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(b) If to SABI:
Swiss Army Brands, Inc.
Xxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxxx 00000-0000
Attention: The President
SECTION 11. USE ON MUNITIONS AND WEAPONS.
SABI will not utilize any BRBT Trademark or the words "Swiss
Army" in connection with munitions or weapons.
SECTION 12. COSTS.
Elsewhere in this Agreement it is provided that certain
registrations requested by SABI shall be made at the expenses of SABI and not at
the expense of BRBT. Without lessening the authority of such statements but for
greater clarity it is further provided nothing in this Agreement shall require
BRBT to expend in connection with the BRBT Trademarks or otherwise in respect of
this Agreement any sums, for registration or otherwise, other than out of
royalties actually received hereunder. The cost of any registrations effectuated
at the request of SABI shall be borne entirely by SABI.
SECTION 13. SWISS MARTIAL TRADEMARKS.
(a) Xx. Xxxxx Xxxxxxxxx Manigley and/or L.D.M. Engineering,
Ltd. (collectively and including their respective affiliates, "Mr. Manigley")
claims certain rights to use the trademark "Swiss Air Force" in connection with
the sale of watches. Some or all of the rights so claimed are disputed by SABI,
which is currently engaged in litigation in the United States with Mr. Manigley.
BRBT takes no position concerning that dispute and, anything herein to the
contrary notwithstanding, BRBT shall have no obligation to assist SABI in any
way concerning such dispute.
(b) Except for this Agreement and for a prior agreement
between Mr. Manigley and the Air Force branch of the Swiss Military Department
relating to the trademark "Swiss Air Force", which is not affected by this
Agreement: Neither the Swiss Military Department nor any other branch of the
Swiss Government has granted any rights to use or register, nor approved the use
or registration by any person of any Swiss Martial Trademark and no such Swiss
Governmental body will do so during the term of this Agreement. SABI and BRBT
will use their best efforts to prevent the use of Swiss Martial Trademarks. The
immediately preceding sentence shall not apply to "Patrouille Suisse" in the
French language.
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SECTION 13A. TERMINATION OF LINES OF PRODUCT.
If: (a) SABI or its affiliates, assignees or licensees has
sold under a license granted pursuant to this Agreement in Commercial Quantities
goods in any "General Product Category" (as defined below) and thereafter,
(b) such sales cease so that such goods are not sold in
Commercial Quantities by any such persons for a consecutive period of three
years then BRBT may terminate this license as to that General Product Category
as follows:
(i) BRBT may notify SABI in writing of its intent to terminate
and this Agreement shall terminate for that General Product Category unless
during the 180 day period after receipt of such notice, sales in Commercial
Quantities are resumed.
(ii) For purposes of this section, the term "General Product
Category" shall refer to a general group of products such as "timepieces" or
"leather goods" (rather than to specific product designations such as "ladies
wristwatches" or "attache cases").
(c) Nothing in this Section 13A shall operate directly or
indirectly to require SABI to grant any licenses of any SABI Trademark.
SECTION 14. COOPERATION CONCERNING TRADEMARK INFRINGEMENT.
Each of the parties shall inform the other promptly in writing
of (a) any infringement of any BRBT Trademark or the Registered SABI American
Trademark of which they shall become aware, (b) any challenge by any party to
either party's use of
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SWISS ARMY, and (c) any proceeding instituted or threatened by or any claim by
any third party of any rights in SWISS ARMY. Subject to Section 12 above
relating to cost, the parties hereto shall cooperate and take such action as
reasonably requested by the other party to protect the BRBT Trademarks and the
Registered SABI American Trademark from infringement.
SECTION 15. MISCELLANEOUS.
(a) This Agreement shall be covered by and interpreted by the
laws of Switzerland provided that matters related to trademark rights in a
particular country shall be covered by and interpreted in accordance with the
trademark laws of such country. In the event of a conflict between versions of
this Agreement, the English version shall govern.
(b) This Agreement is the sole agreement between and among the
parties relating to the subject matter hereof and merges and supersedes any and
all agreements between them relating thereto. This Agreement may not be altered
or amended except by a writing duly executed on behalf of the party against whom
such alteration or amendment is sought to be applied.
(c) In the event of the sublicensing of the Agreement by SABI,
the sublicensee must, as a condition of executing any rights hereunder, agree in
writing to abide by the provisions hereof relating to quality, origin and
royalties.
(d) Nothing in this Agreement shall prevent SABI from
sublicensing or otherwise permitting Precise or others to exercise rights herein
granted to SABI nor prevent the use by SABI of trademarks now being used by it
nor require either party hereto to prevent the use by Precise of trademarks now
being used by it provided that SABI has agreed in writing to such use.
Notwithstanding anything herein to the contrary, SABI shall not be required to
do anything pursuant to this Agreement which would constitute a breach or
violation of that certain license agreement dated June 30, 1992 between SABI and
Precise.
(e) The Federal Military Department may change the identity of
its representative under this Agreement, in which case the benefits and
obligations of BRBT shall devolve upon that designee.
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THE SWISS CONFEDERATION Represented by
The Federal Military Department
Represented by:
FEDERAL DEFENCE PRODUCTION GROUP
Represented by:
/s/ Xxxx X. Xxxxx
Xxxx X. Xxxxx
Chief of Armament
/s/ Xxxx Xxxxx
Xxxx Xxxxx
General Manager Central Administration
SWISS ARMY BRANDS, INC.
By: /s/ Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Authorized Signatory
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