A miniature guide to IP rights for fintech companies in Sweden
Immaterial rights
IP protection for software
What intellectual property rights are available to protect software, and how do you obtain these rights?
Computer programs are protected as copyrighted works in accordance with the Copyright Act (1960:729) (CA). Copyright protection arises automatically, and thus there is no registration procedure to obtain copyright protection.
Software-implemented inventions and business methods can be registered and protected as patents if they meet all the necessary requirements. However, program code or business methods alone cannot be patented in Sweden, but a technical invention that includes a business method, or that is implemented or can be implemented by a computer program, can be patentable.
IP developed by employees and contractors
Who owns new intellectual property rights developed by an employee during the course of employment? Do the same rules apply to new intellectual property rights developed by contractors or consultants?
In general, intellectual property rights developed during employment will vest with the employee unless they are expressly transferred to the employer. However, the employer has a more or less extensive right to acquire or use the intellectual property depending on the category of intellectual property and the category of the invention as well as the provisions of the applicable employment or collective agreement. There are also special legal provisions on certain intellectual property rights. Below is a summary of the general principles governing an employer’s rights to inventions developed by its employees.
According to CA, copyright to a computer program created during employment is automatically transferred to the employer unless otherwise agreed in, for example, the employment contract. However, the scope of the concept of computer program is not clear according to Swedish law. Therefore, it is recommended that employers include an appropriate clause in the employment contract that expressly transfers all rights to the employer.
An employer has certain rights to patentable inventions developed by its employees. These inventions are divided into three categories, and the employer’s rights differ between the categories:
- inventions developed by employees who are employed to carry out research and development work and which are developed within the scope of employment may be acquired or used by the employer;
- inventions developed within the employer’s industry but developed by an employee who is not employed to conduct research and development work may be used by the employer and the employer has priority over others when acquiring ownership of the invention; and
- inventions developed within the employer’s industry but developed unrelated to employment may be acquired by the employer, with priority over others, if agreed with the employee.
Collective agreements (if applicable) may also contain provisions regarding employer 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 to results belong to the author. This means that a company must explicitly acquire the rights to these results through an agreement with the originator. The inclusion of appropriate clauses on intellectual property rights in the contract with contractors and consultants is therefore essential.
Shared ownership
Are there any restrictions on a co-owner of intellectual property rights to use, license, charge or transfer their intellectual property rights?
Swedish legislation does not fully regulate the issue of co-ownership of intellectual property rights. Only CA regulates the matter explicitly, whereby the main rule is that co-authors have a joint right to the copyrighted work. The same should reasonably also apply to the other categories of intellectual property rights.
Unless otherwise agreed between the co-owners, the Act (1904:48) on joint ownership (AJO) is applicable. AJO states that the consent of all co-owners is necessary for all decisions relating to the management of the co-owned property. However, all co-owners have the right to sell their share in the jointly owned intangible property without the consent of the other owners.
In light of this, co-owners of intellectual property rights are restricted from using, licensing, charging or transferring the intellectual property in its entirety without the consent of the other co-owner. The co-owners must therefore regulate the co-ownership and agree on how to use and manage the intangible property to avoid uncertainty.
Exchange secrets
How are trade secrets protected? Are trade secrets kept confidential during court proceedings?
Protection for business secrets is provided by the Act (2018:558) on business secrets (TSA). For the purposes of the TSA, trade secrets are defined as information about the business or operating conditions of a trader’s business that is secret in the sense that it is not, as a body or in the precise configuration and composition of its components, generally known among or readily available for people within the circles who normally deal with the type of information in question, which the trader has taken reasonable measures to keep confidential and whose disclosure is likely to harm the trader from a competitive point of view. Trade secrets cannot be registered for protection, and the only statutory protection for such information is granted under the TSA.
The trial, as well as all evidence and other information submitted to the court, is generally public in Sweden. However, for information relating to the business or operating conditions, the parties may request confidentiality when providing information or during processing and afterwards. However, a Swedish court is not obliged to grant such a request, and there is no way of knowing whether the court will grant a request for confidentiality in advance.
Branding
What intellectual property rights are available to protect the brand and how do you obtain these rights? How can fintech companies ensure they don’t infringe on existing trademarks?
The general provisions for the protection of brands and trademarks are found in the Trademarks Act (2010:1877). A trade symbol can be registered for protection in Sweden if it is distinctive (ie able to distinguish goods or services from one business activity from another). A trademark that is registered for protection in the European Union also provides protection in Sweden. Exclusive rights to a trading symbol can also be obtained, without registration, if the symbol is considered established on the market. A trade symbol is considered established in the market if it is known by a significant part of the relevant public as an indication of the goods or services offered under it.
New companies can either search relevant public databases themselves for trademarks that are identical to or similar to the trademarks they intend to use (e.g. in the Patent and Registration Office’s database that includes both Swedish and EU trademarks) or hire a trademark agent for to assist with such preliminary investigations.
General brand profiling may be protected by the Marketing Act (2008:486) (MPA). The law protects against unfair competition and can thus, among other things, protect a business against other companies unfairly exploiting the reputation associated with the first business, including its trademark, company name or other distinguishing features.
Measures for infringement of IP
What remedies are available to individuals or companies whose intellectual property rights have been infringed?
There are many remedies available when suing an alleged infringement in court. For example, there are preliminary injunctions and bans on fines as well as damages for infringement, loss of profit and impaired goodwill in all Swedish intellectual property laws. Violations committed intentionally or through gross negligence can also lead to fines or imprisonment.