WORLD WATCH & JEWELLERY SHOW - 25 years of arbitration

The arbitration panel of Baselworld, widely referred to simply as the Panel, this year celebrated its 25th anniversary.

Revue FH - 30 April 2009 - # 8

Swatch Group pavilion, at Baselworld 2009 © Worldtempus

With the 2009 edition having just come to an end, we look here in detail at an original institution. The aim of Baselworld, like all events of its kind, is to establish links between manufacturers and clients within a particular economic sector on the same premises over a given period of time. In this hothouse of activity, the desire to do well can get out of control, leading in some instances to clear cases of unfair competition. It is easy to imagine that with 2,000 firms under one roof, disputes arise only too often.

Until 1983, exhibitors seeking to defend their interests had no choice but to file a complaint with Basel civil court. A judge would then open a case and immediately take a series of protective measures as required by the procedure. In particular, he would order the sequestration of litigious objects by the police. Thereafter he would summon the parties to appear in order to hear their case before delivering judgment. The 1983 edition, which saw the exhibition opened up to foreign countries, quite simply caused the system to implode. That year, Basel’s judges signed 24 warrants enabling police to search stands, including 12 on one day alone. It is not hard to imagine the disarray caused by the comings and goings of police officers in the aisles of what was still called «the fair». Judges meanwhile, completely overwhelmed by this avalanche of complaints, justifiably called «time out». Indeed, little could be achieved by pronouncing judgment several days or even weeks after the end of the event when all incriminated parties had returned to their respective countries. Alarmed by the fall-out from this unwarranted confusion, the exhibition’s organisers took a series of radical steps to prevent the same thing happening again. Indeed the very survival of the event depended on it. The best Swiss arbitration experts were mandated to set up a kind of internal court able to take the place of the civil court. This new authority had an ambitious brief: to register all complaints, examine their admissibility, hear both sides of the argument, deliver judgment and notify a decision, all within 24 hours. Sanctions, applicable in the building and for the duration of the exhibition, range from the withdrawal of litigious objects to closure of the stand, and in the case of repeat offences exclusion from the exhibition for a period of a year or more. The contract binding the exhibitor to the organiser was redrafted to give this arbitration process a legal basis. By signing the contract, every exhibitor agrees to be governed by the Panel and to accept its decisions.

Particular attention was paid to the composition of the Panel. The result of this reflection is a delicate compromise taking account of the country of origin of exhibitors, their cultural idiosyncrasies, languages spoken and the different fields of activity (watchmaking, jewellery, ancillary branches). All in the knowledge that the applicable law for all relevant purposes is Swiss law. As a result, the Panel is composed of six members and a president with voting rights, two experts and a secretary (without voting rights). Members are natives of Switzerland, Japan, Italy and Germany and are appointed according to their experience and extensive knowledge of intellectual property. They may be assisted in their decision-making by the two experts chosen for their longstanding activity in the fight against counterfeiting. As for the president and the secretary, the former is a lawyer based in Basel, the latter the legal officer of MCH Group, the company which organises the exhibition.

Today the Panel has reached maturity, basing its deliberations on 25 years of experience and nearly 800 complaints processed in the fields of design, trademarks, patents, unfair competition or marks of origin. Its decisions are also binding outside the walls of the exhibition and are regularly used by rights holders in civil courts to obtain judgments on the substance of a case either in Switzerland or abroad. The ultimate mark of its success is that if an exhibitor files a complaint with Basel civil court while the exhibition is in progress, he will be referred back to the Panel!

2009 overview

The Baselworld Panel ended its 25th session with a result comparable to previous editions. The exhibition’s arbitration panel opened 24 cases (32 in 2008), including 21 complaints and three certified statements. Three complaints were withdrawn as a result of settlements between the parties. The remaining 18 complaints were examined in detail by members of the Panel. After deliberation, 16 complaints were deemed to be well founded and were consequently accepted. Exhibitors caught red-handed in the act of copying were required to take the appropriate measures, namely immediate withdrawal of litigious objects, together with a ban on presenting the said objects either physically or in a catalogue and offering them for sale in any form whatsoever on the premises for the duration of the exhibition.

A satisfactory outcome therefore; however the members of the Panel are realistic. Copies remain present at Baselworld and a number of exhibitors continue to make them their stock in trade. However, their visibility is curtailed to a great extent because of the Panel’s real powers of prevention and dissuasion. It should be remembered that Basel accounts for up to 80% of the turnover of some companies. For these firms, a summons to appear before the Panel can have direct and lasting financial repercussions, to the extent that even a simple threat to file a complaint is often enough to cause certain pieces to disappear from display stands as if by magic.

If any doubts remain as to the usefulnessof the Panel, one need only visit exhibitions where no such facility is present to observe at first hand the abundance of copies.