Swiss Army to Get Slice of Knifemaker's Profit

(Bloomberg) -- The fight on whether the Swiss army or the company that makes the country’s famous pocket knives gets to profit from selling goods branded as “Swiss Military” has been settled. The answer is both of them.

The two parties reached a settlement for an undisclosed sum, according to a joint statement. Under the agreement, Victorinox AG is allowed to exclusively use the term “Swiss Military” to brand its perfumes in the North American market while the Swiss government pockets licensing fees.

The trial started Thursday before a commercial court in Bern and instead of going into its scheduled second day, the parties started private discussions, according to a court clerk.

Armasuisse, the procurement agency, has the mandate to protect the Swiss Army, Swiss Military, and Swiss Air Force brands and to market them via licensing agreements. The body won a case in front of the same court two and a half years ago when it sued the chocolate maker Star Trade for branding its bars as “Swiss military chocolate.” They are now sold as “Royal Army” candy.

In 2017, licensing fees generated revenues of 1.1 million francs ($1.1 million) for the Swiss government, Armasuisse spokeswoman Jacqueline Stampfli said in an email.

The origins of the Swiss Army knife date back to the late 1880s, when the Swiss military needed a tool that could serve both as cutlery as well as help dismantling a rifle. While the first batch of knives was produced in Germany, Karl Elsener in the Swiss town of Ibach later became the producer, starting the company that would later be named Victorinox.

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