A thumbnail guide to IP rights for fintech businesses in Sweden

Intellectual property rights

Which intellectual property rights are available to protect software, and how do you obtain those rights?

Computer programs are protected as copyrighted works in accordance with the Swedish Copyright Act (1960:729 (CA)). The copyright protection arises automatically, and there is, thus, no registration procedure for obtaining copyright protection.

Software-implemented inventions and business methods can be registered and protected as patents if they meet all the necessary requirements. Program code or mere business methods, however, cannot be patented in Sweden, but a technical invention that includes a business method, or which is implemented or can be implemented by a computer program, can be patentable.

Who owns new intellectual property developed by an employee during the course of employment? Do the same rules apply to new intellectual property developed by contractors or consultants?

In general, intellectual property developed during the course of employment vests with the employee unless explicitly transferred to the employer. However, the employer has a more or less extensive right to acquire or utilise the intellectual property depending on the category of intellectual property and the category of invention (see below) as well as the provisions in the applicable employment or collective bargaining agreements. There are also specific statutory provisions concerning certain intellectual property. Below is a summary of the general principles regarding an employer’s rights to inventions developed by its employees.

According to the CA, copyright in a computer program created in the course of employment is automatically transferred to the employer unless otherwise agreed in, for example, the employment agreement. However, the scope of the concept of ‘computer program’ is not clear under Swedish law. Therefore, it is recommended that employers include an appropriate clause in the employment agreement that explicitly transfers all rights to the employer.

An employer has certain rights to patentable inventions developed by its employees. Those inventions are divided into three categories, and the employer’s rights differ between the categories:

• inventions developed by employees that are employed to conduct research and development work, and which are developed within the scope of employment, may be acquired or utilised by the employer;
• inventions developed within the employer’s line of business but developed by an employee that is not employed to conduct research and development work may be utilised by the employer, and the employer has priority over others in acquiring ownership of the invention; and
• inventions developed within the employer’s line of business but developed without any connection to the employment may be acquired by the employer, with priority over others, if agreed upon with the employee.

Collective bargaining agreements (if applicable) may also contain provisions on employers’ rights to intellectual property developed by employees similar to the three categories described above.

In relation to contractors and consultants, the main rule is that all rights in results vest in the originator. This means that a company must explicitly acquire the rights in those results through agreements with the originator. The inclusion of appropriate intellectual property clauses in the agreement with contractors and consultants are, thus, essential.

Are there any restrictions on a joint owner of intellectual property’s right to use, license, charge or assign its right in intellectual property?

The Swedish legislation does not fully regulate the matter of joint ownership of intellectual property. Only the CA regulates the matter explicitly, whereby the main rule is that co-authors have a joint right to the copyright-protected work. The same should reasonably also apply to the other categories of intellectual property.Unless agreed otherwise between the co-owners, the Swedish Act on Joint Ownership (1904:48 (AJO)) is applicable. The AJO states that consent from all co-owners is necessary for all decisions concerning the management of the jointly owned property. All co-owners are, however, entitled to sell their share in the jointly owned intellectual property without consent from the other owners.

In light of this, co-owners of intellectual property are restricted from utilising, licensing, charging or assigning the intellectual property in whole without the other co-owner’s consent. The co-owners must, thus, settle the joint ownership and agree on how to use and manage the intellectual property to avoid uncertainty.

How are trade secrets protected? Are trade secrets kept confidential during court proceedings?

Protection for trade secrets is granted through the Swedish Trade Secrets Act (2018:558 (TSA)). For the purposes of the TSA, trade secrets are defined as information concerning business or operational circumstances in a trader’s business, which is secret in the sense that it is not, as a body or in the precise configuration and assembly of its components, generally known among or readily accessible to persons within the circles that normally deal with the kind of information in question, which the trader has taken reasonable measures to keep confidential and the disclosure of which is likely to cause damage to the trader from a competition perspective. Trade secrets cannot be registered for protection, and the only statutory protection for such information is granted under the TSA.

Court proceedings, as well as all evidence and other information submitted to the court, are generally public in Sweden. However, for information concerning business or operational circumstances, the parties may request secrecy when submitting information or during the proceedings as well as afterwards. However, a Swedish court is not required to adhere to such request, and there is no way of knowing whether the court will grant a request of secrecy in advance.

What intellectual property rights are available to protect branding and how do you obtain those rights? How can fintech businesses ensure they do not infringe existing brands?

The general provisions for protection of trademarks and trade symbols are provided in the Swedish Trademark Act (2010:1877). A trade symbol can be registered for protection in Sweden if it is distinctive (ie, capable of distinguishing goods or services of one business activity from those of another). A trademark registered for protection in the European Union also grants protection in Sweden. Exclusive rights to a trade symbol may also be obtained, without registration, if the symbol is considered established on the market. A trade symbol is deemed established on the market if it is known by a significant part of the relevant public as an indication for the goods or services that are being offered under it.

New businesses can either perform searches themselves in relevant public databases for trademarks identical or similar to the trademarks they intend to use (eg, in the Swedish Patent and Registration Office’s database, which covers both Swedish and EU trademarks) or engage a trademark attorney to assist with such preliminary investigations.

General branding can be protected by the Marketing Practices Act. The Act protects unfair competition and can, thus, inter alia, protect a business against other business taking unfair advantage of the reputation associated with the first business, including its trademark, business name or other distinctive marks.

What remedies are available to individuals or companies whose intellectual property rights have been infringed?

There are numerous remedies available when suing an alleged infringer in court. For example, preliminary injunctions and prohibitions under penalty of fine as well as damages for infringement, loss of profit and impaired goodwill are available in all Swedish intellectual property laws. Infringements committed intentionally or through gross negligence can also result in fines or imprisonment.

Law stated date

Give the date on which the above content is accurate.

10 July 2020.