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NEW SWEDISH ACT ON THE PROTECTION OF TRADE SECRETS

2018-06-21

On 1 July 2018, the new Swedish Act on the Protection of Trade Secrets enters into force. It is based on an EU directive and follows the principles in the previous law, with some adjustments and adaptions. The government underlines that an overall purpose with the new law is the importance of securing competitiveness and improve the conditions for innovation and knowledge transfer.

The new law strengthens the protection of trade secrets, while at the same time placing higher demands for active actions by companies to inform employees with access to sensitive information regarding what information is considered trade secrets.

Now is a good opportunity for companies to review their procedures, for example:

  • Make sure that non-disclosure agreements are in place and review agreements with consultants and employees who have access to sensitive information.
  • If possible, limit the number of individuals who have access to sensitive information.
  • Conduct trainings for employees about what is considered as trade secrets and why it is important to keep the information secret.

In general, the new law provides the following:

  • More requirements are set on companies to inform employees with access to sensitive information regarding what information that is considered as trade secrets. This is mainly done through the obligation to take reasonable steps to keep the information secret. In general, it is not sufficient that the employees themselves understand or presume that the person lawfully in control of the information has had the intention to keep it secret.
  • Research institutions are now explicitly mentioned, alongside business operators.
  • Just as before, the definition of information covers both information that has been documented in any form, including drawings, models and other similar technical prototypes, and an individual person’s knowledge of a specific circumstance, notwithstanding that it has not been documented in any specific manner. Thus, the definition is technology-neutral and applies to all forms of information regardless if the information is simple and non-complex, or unique, complex or otherwise qualified. Source codes and computer programs are also covered by the definition.
  • Use of a trade secret shall also include situations where someone produces goods, whose design, characteristics, functioning, production process or marketing significantly benefits from the misappropriated trade secret. The same applies to when someone offers such goods for sale, brings it onto the market or when it is imported, exported or stored for these purposes.
  • More actions regarding trade secrets shall be unlawful and prohibited.
  • Damages can be relevant in more cases than before.
  • The confidentiality protection in proceedings is further strengthened.
  • The penalty scale for industrial espionage is extended.
  • It is clarified that competences that an employee has acquired in the employee’s ordinary profession, and information regarding something that constitutes a crime or other serious irregularity, is not considered as trade secrets. The purpose is to facilitate for employees that transfer between jobs.

For more information you are welcome to contact:

helena.ronqvist@magnussonlaw.com

The content of this newsletter is not intended to provide a comprehensive picture of the legislation. It is generally held and should not be considered as advice.

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