Intellectual property issues

Paris Convention

Is your jurisdiction party to the Paris Convention for the Protection of Industrial Property? The Patent Cooperation Treaty (PCT)? The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs)?

Finland is party to all of these conventions.

Contesting validity

Can the licensee be contractually prohibited from contesting the validity of a foreign licensor’s intellectual property rights or registrations in your jurisdiction?

Generally speaking, yes. A no-challenge clause imposing on the licensee an obligation not to contest the validity of his or her licensor’s IPRs is not prima facie prohibited and is likely to be held effective.

Accordingly, the licensee’s action to the contrary is likely to be considered a breach to be sanctioned against pursuant to the agreement, and failing any provisions in that respect, as a breach, which, depending on circumstances, may entitle the licensor to terminate the agreement.

Invalidity or expiry

What is the effect of the invalidity or expiry of registration of an intellectual property right on a related licence agreement in your jurisdiction? If the licence remains in effect, can royalties continue to be levied? If the licence does not remain in effect, can the licensee freely compete?

Given that the IPR was registered and then expired or proved invalid, unless the licence entitles the licensee to enjoy further rights the licence agreement must be regarded as elapsed. Accordingly, unless otherwise provided for in the licence agreement, if the IPR is invalidated or the registration has expired, the licensee may be well advised to claim the agreement null and the resultant relief as to royalties at least insofar as the value of the IPR can be considered lost. Alternatively, the licensee may claim that he or she is entitled to terminate the agreement owing to a breach severe enough for repudiation.

However, unless the licensor, at the time of entering into the agreement, knew of the invalidity or had a well-founded reason to fear such contingency and failed to make a mention of it to the licensee, it does not seem likely that he or she would be held liable in damages. It seems unlikely that a licensee challenging the validity of the registration could recover any royalty paid prior to the adjudication of invalidity and at least not prior to the challenge. Therefore, the licensor may wish additionally to include in his or her agreement:

  • payment for maintenance of a licensed rights clause for covering costs for maintaining both the registration (where required) and the validity of IPRs;
  • a royalty after contract expiry clause should know-how continue to benefit the licensee’s operations after contract expiry; and
  • a momentum clause entitling the licensor to be paid fees for, for example, technical information and assistance already provided or, at the risk of subsequent licensee-incited contract adjustment, simply a disclaimer of liability for maintenance of IPRs, or a force majeure or relief clause to the same effect.

The licensee may wish to contain in the agreement an express warranty of title and a non-infringement clause.

If the licence does not remain in effect, unless bound by a post-contract undertaking not to compete, the licensee can freely compete.

Requirements specific to foreigners

Is an original registration or evidence of use in the jurisdiction of origin, or any other requirements unique to foreigners, necessary prior to the registration of intellectual property in your jurisdiction?

Generally, no. Owing to widely reciprocal relaxation of requirements as to original registration and evidence of use, only rarely does a foreign national not carrying on business in Finland have to demonstrate that his or her trademark is registered in his or her jurisdiction or made use of. Nevertheless, a foreign applicant with neither domicile nor registered office in Finland must appoint a local agent to represent the applicant in all matters concerning the application.

Unregistered rights

Can unregistered trademarks, or other intellectual property rights that are not registered, be licensed in your jurisdiction?

Yes. Know-how and trade secrets, whether alone or in connection with other IPRs, say inventions, know-how or business concepts such as schemes, rules and methods for doing business, are frequently the subject of licences. Exclusive rights for a trademark may be acquired, even without registration, after the mark has become established. A trade symbol is considered established if it has become generally known in the appropriate business or consumer circles in Finland as a symbol specific to the goods or services of its proprietor.

Security interests

Are there particular requirements in your jurisdiction to take a security interest in intellectual property?

A security interest by means of pledge can generally be instituted by the recorded owner of the IPR. This is true as to registered trademarks as well as to patents, utility models, registered designs, layout designs and plant varieties. However, unregistered trademarks, trade names and copyrights cannot be used as security. A valid pledge of a right to a registered trademark requires a writ of pledge and entry into the register of trademarks. Execution can be levied on a trademark only if the pledge is entered into the register. Although as to the pledge of a patent right there are no formal requirements inter partes for being regarded as binding in relation to third parties, the pledge needs to be entered into the register of patents. In these respects, it should be noted that there are some slight differences as to other pledgeable IPRs.

Proceedings against third parties

Can a foreign owner or licensor of intellectual property institute proceedings against a third party for infringement in your jurisdiction without joining the licensee from your jurisdiction as a party to the proceedings? Can an intellectual property licensee in your jurisdiction institute proceedings against an infringer of the licensed intellectual property without the consent of the owner or licensor? Can the licensee be contractually prohibited from doing so?

There are no obstacles for the foreign owner or licensor of an IPR, whether one with exclusive, sole or non-exclusive rights, to institute proceedings for infringement without joining the licensee as party to the proceedings.

Instituting proceedings by an IPR licensee always requires that the licensee demonstrates that he or she has informed the owner of the IPR of his or her claim against the infringer. Generally, the person last recorded as owner is deemed as lawful proprietor for the purposes of lawsuits and other matters concerning the IPR.

Always subject to the statutory test of reasonableness, the licensee can agree not to institute proceedings against an infringer.

Sub-licensing

Can a trademark or service mark licensee in your jurisdiction sub-license use of the mark to a third party? If so, does the right to sub-license exist statutorily or must it be granted contractually? If it exists statutorily, can the licensee validly waive its right to sub-license?

Unless otherwise agreed, the trademark or service mark licensee must not sub-license the use of the mark to a third party. Accordingly, the right to sub-license does not exist statutorily and, therefore, it must be granted contractually.

Jointly owned intellectual property

If intellectual property in your jurisdiction is jointly owned, is each co-owner free to deal with that intellectual property as it wishes without the consent of the other co-owners? Are co-owners of intellectual property rights able to change this position in a contract?

It is by no means rare that two or more persons have jointly made an invention or created an artistic or literary work. And it is even less uncommon for there to be two writers of some software, internet game, or the like. The general rule is that the co-owners are only in control of the IPR jointly. This is true with respect to licensing or assignment to a third party of the IPR, and the use of it as security. However, as to copyright solely, there is, on one hand, the statutorily exception that each one co-owner is permitted to bring an action against infringement, and on the other hand the one regarding orphan works pursuant to Directive 2012/28/EU. Lacking statutorily rules, in any other respect the co-owners are reduced to contractually arrange the utilisation of the IPR. Owing to the nature of trademarks conferring the sole right of use, co-ownership of trademarks is out of the question.

First to file

Is your jurisdiction a ‘first to file’ or ‘first to invent’ jurisdiction? Can a foreign licensor license the use of an invention subject to a patent application but in respect of which the patent has not been issued in your jurisdiction?

Finland is, primarily, a ‘first to invent’ jurisdiction. The right to the patent arises from the act of inventing. Any one individual having made an invention susceptible to industrial application, or his or her successor in title, is entitled, on application, to a patent. Accordingly, if two or more persons have made an invention as a result of action in concert, the patent is granted jointly to them. However, if two or more persons have independently of each other made an invention, the right to the patent belongs to the person who is first to file for patent.

There should be no obstacle for a foreign licensor to license the use of an invention subject to a patent application but in respect of which the patent has not been issued in our jurisdiction.

Scope of patent protection

Can the following be protected by patents in your jurisdiction: software; business processes or methods; living organisms?

Statutorily, software ‘as such’ is not considered an invention. This is deemed not to foreclose registration provided the computer program solves a technical problem or merely contains some technical aspect.

Business processes are, generally, not patentable. Statutorily, schemes, rules and methods for doing business are not considered inventions.

The patentability of living organisms is extremely circumscribed. With respect to patenting elements of the human body and animal varieties, Finland adheres strictly to the same principles as the rest of the European Union. As to plant varieties, there is a special regime contained in the Act on Plant Varieties Rights.

Trade secrets and know-how

Is there specific legislation in your jurisdiction that governs trade secrets or know-how? If so, is there a legal definition of trade secrets or know-how? In either case, how are trade secrets and know-how treated by the courts?

Yes. The concepts of trade secrets and know-how are fairly well defined. There is specific legislation governing trade secrets. Apart from the consequences of divulging trade secrets as contained in the Penal Code and in the Employment Contracts Act, the latter regarding the duty of an employee not to divulge any business or professional secrets of his or her employer, there is the Trade Secrets Act 2018 that renders a clear-cut definition for trade secrets. The definition of a trade secret resembles that of article 39 of the TRIPS Agreement and article 2 of Directive (EU) 2016/943 (Trade Secrets Directive) as follows:

Information which, as a body or in the precise configuration and assembly of its components, is not, in general, known among or readily accessible to such persons who generally deal with the kind of information in question; which has economic value in business activities owing to the characteristic referred to above; and which has been subject to reasonable measures by its lawful possessor for the purpose of protecting it.

As to know-how, there is no other statutory legal definition than the one contained in article 1(i) of Regulation (EU) No. 316/2014 on block exemptions for technology transfer agreements. The result is that, since know-how generally is part of trade secrets it, accordingly, enjoys the legal protection of the latter. One is well advised to consider thoroughly defining both trade secrets and know-how.

Trade secrets and know-how are, generally, treated by the courts.

Does the law allow a licensor to restrict disclosure or use of trade secrets and know-how by the licensee or third parties in your jurisdiction, both during and after the term of the licence agreement? Is there any distinction to be made with respect to improvements to which the licensee may have contributed?

Yes. Where information qualifies as trade secrets or know-how (ie, neither generally known nor easily accessible information) one can impose on the licensee a reasonable restriction on the exploitation.

Statutorily no distinction is made with respect to improvements to which the licensee may have contributed, nor can a distinction in court practice be found. A distinction must be made between, on the one hand, the situation where the parties have collaborated or acted in concert to make an improvement, and on the other, the situation where each of them has separately contributed to the achievement.

Copyright

What constitutes copyright in your jurisdiction and how can it be protected?

Any artistic or literary work, independently originated by a human being, and of original character, expressed in any manner or form qualifies for copyright. However, this excludes, for example, inventions from the sphere of copyright. Also excluded are all but the tangible work itself, which means that one cannot claim copyright for the basic idea, theme or motif. The requirement fulfilled, copyright arises by virtue of itself. In respect of software and databases, sheer originality is enough. In Finland, copyright is not registered.

Copyright can be asserted, pursuant to the Copyright Act, over works of literary and artistic character, for example, fictional or descriptive representations in writing or speech, computer programs, databases and musical, dramatic, photographic, cinematographic or other works of art. Moreover, certain neighbouring rights are protected, such as performing artists, the producers of recordings of sounds and of images, the use of sound recordings for public performances and producers of catalogues.