Legal framework

Swedish IP law is in line with EU law and international agreements, including the Paris Convention for the Protection of IP Rights and the Agreement on Trade-Related Aspects of IP Rights.

The enforcement of IP and other rights relevant to anti-counterfeiting actions in Sweden is governed by:

  • the Trademarks Act (2010:1877);
  • the Patents Act (1967:837);
  • the Protection of Designs Act (1970:485);
  • the Copyrights Act (1960:729);
  • the Marketing Act (1995:450);
  • the Customs Act (2000:1281);
  • the EU Customs Regulation (608/2013);
  • the EU Community Trademark Regulation (207/2009); and
  • the EU Community Designs Regulation (6/2002).

As an EU member state, Sweden’s border measures are largely set out by the Customs Regulation as implemented into national law. On January 1 2014 EU Regulation 608/2013 concerning the customs enforcement of IP rights replaced Regulation 1383/2003. The new regulation sets down procedural rules for customs authorities to enforce IP rights for goods liable to customs supervision or control.

The new regulation also:

  • expands the range of IP rights infringements covered;
  • ensures that high-quality information is provided to Customs in order to facilitate risk management;
  • modifies procedures in order to reduce costs and administrative burdens; and
  • includes ways of ensuring that the interests of rights holders are protected.

The European Commission has also developed guidelines to provide clarification on the application of the regulation with regard to goods in transit through the EU territory.

The Marketing Act complements various IP rights by providing that use of a misleading reproduction of a trademark also constitutes an unfair marketing practice. A rights holder can bring legal proceedings under the relevant IP act and under the Marketing Act at the same time. This leads to the possibility of double protection for a rights holder seeking to prevent unfair competition.

Border measures

The Swedish customs authority, Tullverket (www.tullverket.se), has established anti-counterfeiting powers, including the right to detain goods which are suspected of infringing IP rights. Customs works at borders as well as across the entire Swedish territory.

Under the EU Customs Regulation, a rights holder may file a national application for action covering Sweden only or an application for action throughout the European Union, calling on Customs to seize suspected counterfeit goods crossing the border into Sweden (or another member state, if an EU application has been filed). Because infringing products can be introduced to the EU market through any EU member state, rights holders should file a request for action covering all EU member states.

Customs applications are valid for one year.

When, acting on a valid application, Customs seizes suspected goods and temporarily suspends them from release, the rights holder and the importer are informed. Customs will act when it finds goods that are suspected of being counterfeit and/or bear a similar trademark to that included in a customs application.

Customs actions may involve taking samples of goods and, on request, handing them over to the rights holder for the purpose of analysis and to secure evidence. In order to save costs and speed up the procedure, customs officials usually photograph the goods and forward the photos to the rights holder for a confirmation of whether the goods are counterfeit.

The rights holder must initiate a criminal or civil action within 10 working days of notification (which may be extended for another 10 days) in order to prevent release of the goods.

If the importer consents to destruction of the goods within this timeframe, Customs will destroy the goods. Customs may also act ex officio without receiving an application. In such cases the rights holder must file an application within four days of notification if it wishes to take action.

Criminal prosecution

Infringement of a protected IP right is criminal if committed wilfully or with gross negligence. The penalties are fines or imprisonment for up to two years. Even an attempt to commit such a crime is considered a criminal act. In a criminal proceeding, the court can also ban the infringer from business operations for up to 10 years. The legislation also applies to the import of goods infringing a protected IP right.

The procedural regulation for bringing criminal charges against a suspected infringer varies depending on the type of IP right. In regard to copyright, prosecution can be initiated either at the request of a rights holder or by the authorities ex officio, provided that such action is necessary in the public interest.

However, in regard to industrial property rights such as patents, registered designs and trademarks, a prosecution against an alleged infringer presupposes that:

  • the rights holder has filed a report and specified the offence; and
  • prosecution is particularly justified by the public interest.

The regulations for prosecution are strict, which is why few criminal cases are brought before the courts. For example, only a major act of counterfeiting which seriously threatens a rights holder’s business will constitute an issue within the public interest.

At present, no specialist courts exist to deal with criminal IP cases. Therefore, in general, the competent court is the district court in the area where the offence was committed or, if that is uncertain, where the suspect resides. The district court’s verdict can be appealed to the court of appeal and later to the Supreme Court (for which leave to appeal is required).

In 2014 the Supreme Court heard an IP rights case in which it provided guidance on the imposition of criminal penalties. The Supreme Court ruled, among other things, that the court should consider not only factors such as the damage to the rights holder and the extent of the infringement, but also the risk of damage to third parties.

Civil enforcement

Swedish implementation of the EU IP Enforcement Directive took effect on April 1 2009, after considerable delay.

Jurisdiction and legal proceedings

The Stockholm District Court is the only court with jurisdiction over infringement proceedings for all patent-related matters. If leave to appeal is granted, the case moves to the Svea Court of Appeal and later to the Supreme Court.

For other IP rights cases, the competent court is the district court in the area where the alleged infringer resides. Decisions can be appealed to the relevant court of appeal. There are six appellate courts in Sweden, which hear cases within their catchment areas.

The Swedish courts aim to deal with civil cases within an average of seven months in the district court and five months in the appeal courts. However, in 2011 cases took on average 7.2 months in the district courts.

The parties may conduct their suits themselves (even before the Supreme Court), but are usually represented by a lawyer who is a member of the Swedish Bar Association, although this is not a requirement.

The general rule is that the losing party must reimburse the winning party for its litigation costs. However, if the win is only partial, the compensation may be adjusted accordingly. The court may also rule that each party shall bear its own costs if the conclusive facts in the case were unknown to the losing party.

The timeframe for enforcement of a civil action from initiation of legal proceedings is between two and three years. This applies to both registered and unregistered trademarks.

Cease and desist letters

The private civil enforcement of IP rights is commonly initiated through a cease and desist letter. Such a letter will usually:

  • claim the IP rights in question;
  • assert the rights holder’s rights;
  • request that the infringing activity cease immediately; and
  • ask the infringer to declare that it will refrain from infringing the rights in the future.

Further, the rights holder may also request supplier details in order to trace the supply chain.

If the infringer does not respond to a cease and desist letter, or if the rights holder needs to take immediate action to stop the infringement, it may apply to the district court for an interim injunction.

In order to prevent actual use or to obtain damages for infringement, the rights holder must take legal action before the district court. The court may grant an interim injunction prohibiting further use of the trademark if the claimant can show good reasons and pays a sufficient bond to cover any loss that the alleged infringer may suffer. The district court may also order that the goods– including equipment used in their manufacture – be destroyed or altered.

In Sweden, parties have a duty to investigate the market before putting potentially infringing products on the market.

Preliminary injunctions and precautionary measures

Preliminary injunctions: Until a final decision has been issued, the court can grant a preliminary injunction if the rights holder can prove probable cause of infringement and provides a sufficient bond to cover any loss that the alleged infringer may suffer.

Order to provide information: If the rights holder can prove probable cause for infringement, the court may order a party or parties which committed or contributed to the infringement, commercially exploited the goods in question or produced or distributed the goods to provide information relating to the infringement (eg, the origin of the infringing goods or services or their distribution networks).

Infringement investigation: In order to preserve evidence relating to an infringement, on petition from the rights holder the court may order the Enforcement Authority to undertake an investigation to search for objects or documents of importance in assessing the alleged infringement. Such an order may be delivered ex parte (ie, without notifying the suspected infringer). The rights holder must post a bond to cover any damage which the investigation may cause to the other party.

The court can order an infringement investigation before legal proceedings have been initiated. Such order will specify the aim of the investigation, the goods and documents to be investigated and their locations. It is often not possible to specify exactly the type of goods or documents that are of interest. However, a decision can, for example, specify “counterfeit goods carrying the trademark x”. Such enforcement decision can be granted within a few weeks.

If an application to execute an infringement investigation order is not filed with the Enforcement Authority within 30 days of the court order, the order becomes invalid.

Remedies

The rights holder may seek:

  • an injunction against the infringer;
  • compensation for the infringement based on lost profits, the profits made by the infringer due to the infringing act, moral damage and the non-infringement interest of the rights holder;
  • modification or destruction of the infringing goods;
  • compensation for costs for storage at Customs and destruction of the infringing goods; and
  • compensation for legal fees and other party costs.

The same general principles apply to the calculation of compensation for infringement of a patent or design.

For an application in a civil case, the applicant must pay a filing fee to the court. At present, the filing fee is Skr2,800 (approximately €300). If the subject of the dispute is of limited value (below approximately €2,400), the fee is approximately €100.

Anti-counterfeiting online

As in other countries, counterfeit products are widely sold online in Sweden. Most websites selling infringing products tend to be connected to businesses located outside Sweden, as indicated by often poor Swedish translations on the websites.

In addition to professional and commercial websites, private individuals advertise counterfeit goods on online auction websites. Rights holders should thus also monitor the sale of counterfeit goods by private retailers on Swedish online auction websites. Such private vendors usually market counterfeit goods and order products from other countries. Products are regularly purchased by the vendor in accordance with orders received and then shipped directly from the foreign country to the individual.

The same legislation and proceedings apply to online infringements as to other kinds of infringement. However, it is often more difficult to identify the offender and to stop the offence in online infringement. In order to identify the infringer, the rights holder may seek an order to obtain information from the internet provider on where the internet protocol address is registered.

A court may order that a domain name be forfeited. However, there are no standard proceedings for the treatment of an infringing domain name – the service provider must outline how the request should be fulfilled.

Preventive measures/strategies

Rights holders should have a long-term strategy to protect their IP rights and to spot infringing goods as early as possible in order to minimise damage. Because Customs plays a key role in tackling suspected counterfeit goods at an early stage, it is important to file a customs application and regularly pursue cases detected by Customs.

Securing evidence at an early stage is vital. Infringement investigations are effective only if the rights holder knows where the infringing goods are located and the infringer is unaware of the investigation. Therefore, it is important to be strategic before an investigation is sought in court. The need for an ex parte order and the importance of an exhaustive order should be detailed in court so that there is no room for misinterpretation by the Enforcement Agency.

In regard to anti-counterfeiting online, one key strategy is to obtain a preliminary injunction from the court directed at the service provider of a domain, in order to require it to act against the infringer.

Customs cooperates with anti-counterfeiting organisations in order to stop counterfeit goods crossing the Swedish border, as well as other national authorities such as the Patent and Registration Office, the Companies Registration Office, the Consumer Agency, the Medical Products Agency and the Prosecution Agency.

Mårten Stenström

Evelina Rosenborg

This article first appeared in World Trademark Review. For further information please visit www.worldtrademarkreview.com.