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Sweeden: Legislative Amendments Proposed to Strengthen Protection of Trade Secrets

Contributed by Advokatfirman Vinge On June 10 2008 a Swedish governmental committee assigned with the task of reviewing and potentially proposing amendments to the Act on Trade Secrets submitted its report entitled "Strengthened Protection for Trade Secrets". As further detailed below, the main proposed changes would introduce: * criminal liability for employees and consultants; * infringement investigations; and * liability for use or disclosure of trade secrets obtained in court proceedings. The committee concluded that it is sometimes difficult to assess whether an attack on a trade secret made by a person with lawful access to the secret is punishable under the Penal Code. To clarify the situation, it is proposed that the act be amended explicitly to provide for liability for this group of people (ie, those who have gained access to a business operation's trade secrets as a result of having participated in its operation). This category would include, among others, employees, temporary agency personnel, certain consultants, directors and auditors. It is suggested that if such a person intentionally and unlawfully discloses or uses in business operations a trade secret, he or she may be fined or sentenced to up to two years' imprisonment. For severe offences, imprisonment of a minimum of six months and a maximum of six years should be imposed. Furthermore, in instances where the basis for participation in the business operation in question has ceased, liability shall be imposed only if the perpetrator acted in a particularly disloyal way or if the act is considered to constitute a severe offence. The committee also proposed to introduce a new means for securing evidence. The suggested measure is called an 'infringement investigation' and is similar in character to measures already available to plaintiffs in cases of suspected infringement of intellectual property. It would allow a court to grant on request permission for a search to be made for evidence at the premises of a person who reasonably may be assumed to have used trade secrets in violation of the act. However, permission may be granted only if the reasons for the measure outweigh the inconvenience to the person adversely affected by it. Furthermore, it is suggested that the party requesting the investigation should be required to provide adequate security (eg, a bank guarantee) for the damage that may potentially be incurred by the subject of the investigation. Finally, it is proposed that protection should be introduced for trade secrets that have been obtained in conjunction with court proceedings. It is suggested that anyone who intentionally or by negligence, without reasonable cause, discloses or uses a trade secret in business operations where such trade secret was obtained in the capacity of a party to a court decision shall be liable to compensate for the damage incurred as a result. The report has been submitted to interest groups and governmental agencies for consideration, which have until November 2008 to provide their comments. Thereafter, a revised bill for enactment of the amendments may be presented during Spring 2009 and, if so, adoption of the legislation is likely to occur not earlier than Autumn 2009. For further information on this topic please contact Claes Henriksson at Advokatfirman Vinge by telephone (+46 8 614 30 00) or by fax (+46 8 614 31 90) or by email (claes.henriksson@vinge.se).

Full post as published by The Trade Secrets Vault on July 29, 2008 (boomark / email).