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International Intellectual Property – Sweden

posted 2 weeks ago

Author

Thomas G. Lindqvist

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+46708*****

LINQ Advokat AB’s work is strictly orientated around giving advice and acting as a legal attorney in business-related issues for companies and individuals. As regards IP-related cases, the firm’s expertise is primarily centred on business secrets, as well as trademark and copyright issues, including acting as legal attorney in the courts.

Our current workflow pertains to trademark matters: objection against trademark applications, as well as acting against trademark infringements. In several cases recently, we have acted against various attempts from a competitor to take advantage of our clients’ well-known and registered trademarks in the food business by using similar marks, which is detrimental to these marks’ distinctiveness. In several cases, it has been obvious that the use of similar marks, or combinations of parts of them, have been constructed in order to make use of the strong establishment and awareness among the consumers of names deriving from and directly related to the client.

The marketing/use has been made both in competitive businesses (restaurants) and on the web, and has led to our clients taking action through LINQ Advokat in order to stop the trademark infringements by demanding the competitor to immediately terminate the marketing (by way of cease-and-desist letters). In 90% of such cases, the infringing party has immediately complied, whereas in other cases, the competitor has voluntarily stopped the marketing as a result of more protracted correspondence.

Furthermore, in one of these cases, the infringing party had also applied for and received registration of a mark that was clearly devised to make use of one of our client’s marks. However, having opposed the registration by arguing – with evidence, that the application had been made in bad faith and was confusingly similar – that the registration should be cancelled. This was indeed the outcome, although the decision was not based on a view that the applicant had been in bad faith – an incorrect assessment by the Swedish Patent & Registration Office, in my view – but with the following statement: “The marks share the letter M in yellow, which is the dominant element in the holder’s mark and the only element in the opponent’s mark. In spite of that, the marks visually and phonetically have a low degree of similarity […] in particular with regard to the fact that the opponent’s mark has an enhanced characteristic power and identical goods.”

Brand protection, copyright protection, trade secrets and unfair competition, as well as IP commercialisation/licensing agreements, are on the same level. Trade secrets are always of interest, and are relevant in all sectors of business law – from clauses in licensing and distribution agreements, to competition clauses in employment agreements and shareholder agreements.

I always declare to my clients that the fundamental value for their company is that its business secrets shall be protected. This does not necessarily mean, in the first instance, by protecting its IP through registration activity. It is a matter of thinking outside the box, from using secrecy agreements when dealing with business parties to protect the business environment through use of policies – and, for example, competition/secrecy clauses in employment agreements, as well as in agreements with consulting partners. It is also a matter of who your client is – for instance, if it is a small company, a startup or a mature company – while also taking into account which business sector it inhabits.

Even if a company has created a patentable invention, it is not a foregone conclusion that my recommendation would be to apply for patent protection, as this route takes a lot of time, while it is also costly to defend a patent application. There is also a degree of risk. One of the first registered protections I usually recommend is trademark registration, which is often the first directly relevant IP protection to consider, especially for a startup company.

In a recent copyright case, I was contacted by a large trading society (the world´s largest) to give advice on how to handle a claimed copyright infringement case. This organisation received a claim from a copyright association whose business idea was to conduct Internet searches for possible copyright infringements, and on a mass scale, send out sometimes dubious claims for licence payments.

The case in question concerned a screenshot taken from the Swedish National Agency image base, with an article regarding a reference to a report in a newspaper called Dagens Juridik directed towards the Trading Society´s members, which would be of little to no interest for the general public. The screenshot contained a photo of the general manager of the Trading Society, with a reference to the report and a sign annexed hereto. Annexed to the photo was a sign that claimed to be the logo of Dagens Juridik – an image that was also claimed to be copyright protected. When taking the screenshot, it was impossible to delete the image from the photo of the general manager, and the reference was only made in order to inform the readers that a certain article existed that was only of interest to the society´s members. The copyright association claimed immediate payment of SEK 3968. However, the claim was refused, referring to section 23.3 of the Swedish Copyright Act, based on the argument that it concerned a reference to an article in a newspaper or a periodical publication containing an account of the day´s event (even though the article in question was well over a year old).

Further, the society claimed that it was obvious that the screenshot at hand, together with the reference in the text with a direct link to the original article, falls within the criteria for this exception. In addition, the society claimed that, technically, there was no way to avoid using the copyright-protected photo when sharing the report. This was, in the current case, apparent, since the copyright-protected photo also appeared when sharing the article on social media, which was another function that the newspaper in question – i.e., the copyright holder – itself provided. On another note, the society claimed that the damages claimed totalled SEK 3968, regardless of whether the incursion amounted to infringement, as well as disregarding the limited distribution to the society´s members for informative purposes as a yearly activity report presented as a subpage on the society´s homepage.

Following lengthy communications in which the copyright association successively lowered its claim (to SEK 2000) – while withholding the right to compensation using various arguments as to why the exception was not applicable – the society offered a token sum of SEK 400 in order to dismiss the time-consuming communications, together with a final remark stating that ICC agrees with and recognises the importance of robust copyright enforcement and the notion that all players act within the frame of the principle of proportionality. They stated: “We consider that the resources taken into account in this case far exceed the proportionality we deem should exist in a matter of this kind.” So far, the copyright society has not responded in this matter.

This case study provides an interesting view of the border between the right holders’ protection for its creation and freedom of speech. The extremely important right to be protected should, however, be used by the right holder on a discretionary basis.

There are several challenges that occur in cross-border IP cases. One should always keep in mind that IP legislation, in essence, is based on geographically exclusive rights, which differ from country to country. Swedish IP legislation, as an example, does not ensure protection when a third-party copies a Swedish protected work and economically make use of it abroad. This situation has, of course, been altered significantly by EU legislation, with the aim to create a common market using legislation in the form of EU directives (rather than legally binding rules), with EU legislation being directly binding in each member state.

On a more global scale, there are two essential conventions: the Paris convention (copyright) and the Bern convention (industrial property protection and unfair competition), as well as the so-called TRIPS agreement, which covers around 150 member states and provides a coherent order of global protection containing rules and demands of each countries’ IP legislation. Even though these conventions – and the TRIPS agreement – are not directly binding, Swedish IP courts and administrative bodies should apply such laws with conformity against the background context of these international conventions/treaties.

Besides the aforementioned rules, there are several other aspects to consider, mainly related to international procedural law and international private law. The court must, for example, decide whether it is competent to bring up a matter for decision, and should decide which countries’ laws should apply. Matters like whether a trademark has been established and its legal meaning, etc., must be considered. Similarly, questions surrounding Swedish IP rights origin, legal content and standing are, in Sweden, considered to fall under Swedish law, while the opposite normally applies to foreign rights according to the principles set forth in the so-called Rome Convention. In the EU, the Brussels I convention is of particular importance when regulating the courts’ competence and execution of court decisions.

To sum up, there are numerous national and international legislations to consider in more global IP matters, such as when taking action against counterfeit goods, as well as cross-border licensing, which in turn entails multiple challenges requiring prudent consideration.

In every case, careful due diligence is of the essence before taking any action whatsoever.

In one particular case (copying the aesthetic of a set of watches) wherein I represented the claimed infringer, the counterpart’s attorney did not do his homework when setting up the lawsuit, particularly regarding which law he based his claim on. In Sweden, an instance of copying can be attacked using either the Marketing Act – stating that “an employer may not, in marketing, use imitations which are misleading by being easily confused with another businessman´s distinctive and known products” (Section 14 of the Marketing Act) – or the Copyright Act, according to which an individual’s copyright-protected work may not be replicated.

Instead of claiming that the marketing was unjustified under the Marketing Act, the counterpart’s attorney began the case by claiming that his client’s products were copyright protected based on some drawings made by his client a couple of years back, which were used as evidence, combined with a marketing survey based on the how well known the product was.

However, when digging into the historic details of the product’s design, it became clear that all details of the watches that the counterpart claimed to be unique could be proven to have existed on the market much earlier than being created by the counterpart, and could be purchased as components to be assembled, while the bracelet – in the form of a Velco wristband – had been used for a long time by surfers in Hawaii.
The counterpart lost the case, as he, in the first instance, based his case on copyright instead of the Marketing Act, and when trying to change it to be based merely on the Marketing Act, the marketing survey was devised in a manner that was too focused on how well known the product was – without making a thorough distinction between the name of the product and its design.

This case reveals the importance in IP-related disputes to base the case on the appropriate legal grounds. In this example, the counterpart should have avoided basing their case on copyright on the grounds that the client had created a unique design, rather than highlighting the fact that the watch design was already well known on the market. According to the Marketing Act:

“Section 14: A trader may not, in the course of marketing, use copies that are misleading in that they can easily be confused with another trader’s known and distinctive products. This does not, however, apply to copies [of a design that] is primarily intended to render the product functional.”

It is, of course, important to look into differences in legislation between jurisdictions. It is therefore crucial to cooperate with experts in other jurisdictions, which in turn necessitates having a network – for example, good contacts within the IP field in the respective jurisdiction. Legislation across the IP field may not be directly valid in each jurisdiction, but there are shared basic principles that consistently apply when determining how to handle a specific matter. This extends to specific cross-border procedural and international private law, which requires a general and genuine interest in following IP law and its international development.

Yes, definitely. The most important issue is, of course, the AI field, which has opened up a lot of questions concerning the border between human creations and those generated by machine learning. This is a substantial challenge and has already affected the legislative landscape and the overall situation regarding how we protect inventions and new creative works.

Another issue is the question around prior arts / traditional arts. This issue entails several difficult internationally debated questions surrounding the scope of protection, and how protection might be achieved, including: What types of knowledge should be protected? What rights should be afforded protection? What specific conditions should apply? Who shall own the rights – states or other international bodies? What should be the duration of the protection?

IP discussions as they relate to business are a cornerstone of companies’ efforts to safeguard their creations and inventions, as well as – in a wider scope – their business secrets, of which IP legislation is just one component. The existing legislative system, consisting of a variety of national and international conventions – although complicated and sometimes questioned – is the only existing international regime to handle protection and disputes in the IP field.

To work as a lawyer in the IP field in today’s world is demanding and requires not only genuine qualification, but also an authentic interest in questions related to specific clients’ needs concerning protection against unfair practice by competitors. I believe I have these qualifications.

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