Swedish IP Cases from 2013 – an Overview

As the IP laws in Sweden and Finland are very similar, it is interesting to note what sort of IP cases actually reaches the Swedish courts. We therefore briefly describe some of the most interesting higher court judgments rendered in 2013 with regard to patents, trademarks, designs and copyright.

Patents – the public defined

The Court of Patent Appeals’ judgment in case 09-279 (27 February 2013), concerned if a patent should be revoked on the basis that the invention had been made publicly available and lacked novelty. It was not disputed that the patent owner had sold devices to the complainant, before the patent application was filed, containing technology consistent with one of the patent claims. There was also a considerable time lapse from the conception of the invention in 1992, to the patent filing in 2005.

In the judgment, the Court stated that a sale of a product containing the invention to another party, without reservations, usually makes the invention publicly available. Accordingly, the lack of a confidentiality undertaking normally means that the technology has been made publicly available.

However, in this case, the Court considered that prior to the sale of the product the parties had been involved in a joint development work, which was not disputed to have been done under an implied understanding of confidentiality. The patent owner had developed the product for the complainant and only delivered the product to the complainant. Hence, the Court concluded that the complainant was not to be regarded as “the public”.

Another reason why the invention was alleged to have been made publicly available was that the complainant showed the product during study visits without requiring any confidentiality undertakings. However, since it was not showed by the complainant that its visitors could examine the product’s structure and functions so closely and to such extent that they could use the invention, it was not considered by the Court to have been made publicly available in this manner either.

The complainant finally also claimed that the invention was known before the patent application, i.e. not new, because its employees and also one employee from one of the complainant’s partner firms knew about the invention. However, neither of these categories of people were considered to be “the public” by the Court. It was stated by the Court that former employees of the complainant could be seen as the public if they knew so much about the invention that they could have used it. However, it was not sufficient that they had the possibility to figure out how to use it. The Court concluded that there must be a de facto knowledge.

Since the complainant did not fulfill its burden of proof regarding public disclosure and novelty, the patent was found to be valid and not revoked. This judgment was not appealed and has gained legal force.

Trademarks – confirming genuine use

In Svea Court of Appeal’s judgment in case T 7141-12 (24 June 2013), it revoked Kraft Foods’ figurative mark “m” as well as Mars’ figurative mark “m&m” in Sweden. The case was initiated by Kraft Foods bringing an action against Mars, claiming that Mars’ national trademark registration for “m&m” should be revoked.

As ground for its claim, Kraft Foods invoked its national trademark registration for “m”, claiming that Mars’ figurative trademark “m&m” caused a risk of confusion with Kraft Foods’ “m” trademark. Mars counterclaimed that Kraft Foods “m” trademark should be revoked due to lack of genuine use.

The Court first examined the counterclaim and stated that the possibility to claim genuine use based on use of a mark deviating from the mark as registered is limited. The registered figurative trademark of Kraft Foods consisted of only three elements, being the letter “m” with an array of lines on each side. As the mark had been put to use without the arrays of lines, the Court held that there was such deviation that the use of the mark could not be held to constitute genuine use of the registered trademark. Therefore, the Court revoked Kraft Foods’ registration.

As the national trademark registration for “m” was revoked, the main claim was dependent on whether or not Kraft Foods still had an exclusive right by establishment on the market at the time when Mars filed its trademark application for “m&m” in 1996. In an overall assessment, based on sales numbers and a market survey, the Court held that this was the case.

The Court further held that there was a risk of confusion between the marks and, hence, that ground for refusal existed when Mars filed its trademark application. Mars’ argument that the “m&m” trademark registration was valid because of passivity by Kraft Food was not accepted by the Court since it concluded that Mars had not filed its trademark application in good faith. As there had previously been an agreement in force between the parties, Mars was well aware of Kraft Foods’ use of the “m” brand when Mars filed its application.

The Supreme Court refused to grant leave to appeal and the judgment has therefore gained legal force.

Allowing functional designs

Göta Court of Appeal’s judgment in case T 1519-12 (16 May 2013), concerned if a registered national design protection for a chimney hood should be revoked. The plaintiff based its claim on the argument that the design lacked novelty as well as individual character in that the design was solely dictated by its technical function.

The Court first concluded that the requirement of individual character means that a design cannot be registered if it is the only design that can perform the function. The Court thereafter stated that there are limitations to how chimney hoods can be designed because it needs to fulfill its functions, but that the designer has a “possibility of variation in the design which is not insignificant”. The Court also stated that since there are limited possibilities to design this kind of product, even minor differences in design should be seen as having originality. Hence, also functional designs may be registered.

Furthermore, the Court held that testimonies from professionals in the business about the originality have limited value since they are too experienced to be compared with an “informed user”, whose perception is the relevant one. The Court also pointed out that the informed user’s overall impression of the originality of the chimney hood should not only be determined from a distance or from ground level since the informed user is expected to also look at product sheets and talk to people in the business about the design.

Considering all of the above circumstances, the Court ruled that the plaintiff had not showed that the registration should be revoked and therefore dismissed the case. This judgment has been appealed to the Supreme Court, which has yet to decide on whether or not to grant leave to appeal. Noteworthy is that the Court of Appeal originally refused to grant leave to appeal of the District Court judgment, with the Supreme Court then ordering the Court of Appeal to accept to adjudicate the case.

Copyright – calculating compensation

In NJA 2013 s 966 (20 November 2013), the Swedish Supreme Court addressed the question of how reasonable compensation should be calculated according to Section 9 of the Swedish Act on Prohibition of Certain Kinds of Decoder Equipment (lag (2000:171) om förbud beträffande viss avkodningsutrustning). This judgment may provide guidance also for infringement cases under the Copyright Act (as well as other IP infringements), as the rules applied are based on the IP legislation applicable when the act was enacted.

The circumstances in this case were that two persons, unauthorized, had made encoded TV broadcasts available to others (so called card sharing). For this reason, they were charged and convicted of such crimes. The companies which held the rights in the TV broadcasts requested compensation for the unauthorized use of their services. Therefore, the main issue was how the amount that constitutes reasonable compensation shall be calculated.

The Court concluded that the assessment of what constitutes reasonable compensation shall be based on the fee that would have been paid if an agreement had been signed between the rights holders and the persons for whom the services were made available by the card sharing. The fact of how often the services had actually been used was considered irrelevant, i.e. it did not matter how many broadcasts had been watched. The Court based its judgment instead on the facts that the services were made available for certain persons and had been used to some extent.

Furthermore, the Court stated that the calculation shall be based on a time period during which the wrongful use in fact took place, meaning at the longest until the last day the service was available. The rights holders’ argument that since it only offered fixed term subscriptions with a minimum subscription period of 24 months, the compensation should be based on the cost of such agreements (even though the actual card sharing was limited to a shorter time period) was not accepted by the Court.

This would only be a factor for any additional compensation based on actual damage incurred by the rights holders, i.e. provided that it could be shown that the card sharing users would in fact have purchased such subscriptions if the card sharing had not been available. However, the reasonable compensation was still calculated based on the number of months the unlawful use took place multiplied with the fixed term subscription fee divided with 24 months as the monthly value. It was noted in the judgment that the issue of VAT had not been addressed by either party.

Concluding remarks

It is clear from all of the cases that the placing of the burden of proof and the evidence presented remain the decisive factors in IP cases. That said, the courts’ definitions of legal terms such as “the public” and “informed user” may completely change how the invoked evidence is assessed.

The Swedish Supreme Court has at the time of writing of this article decided and also granted leave to appeal in further IP cases. These cases will be reported in next year’s case overview.

Erik Ficks
Senior Associate,

Björn Johansson Heigis
Senior Associate

Roschier (Stockholm)