SWEDEN Law and Practice Contributed by: Helena Rönqvist, Magnus Jonson, Vilma Slättegård and Anna Karlsson, Magnusson Law
6. Know-How 6.1 Definition and Legal Basis of Know-How Information and/or know-how that is secret or confi- dential in nature may be afforded protection through confidentiality obligations arising by operation of law or by virtue of contractual provisions, such as those contained in employment contracts and non-disclo- sure agreements. 6.2 Protectability Requirements and Scope Know-how may be protected as a trade secret if it meets the criteria set out in the Swedish Trade Secrets Act, namely that it is a business-related secret (eg, business practices and customer lists), has commer- cial value by virtue of its secrecy, and that reasonable measures have been taken to keep it confidential. Know-how does not need to be novel in the sense required for patent protection, but it must not be gen- erally known or readily accessible to persons with- in the relevant circles. Its economic value typically derives from the competitive advantage associated with its confidentiality. Protection does not extend to information that is generally known, readily accessible, or forms part of the general skills and experience of employees. Fur- thermore, trade secret protection does not confer an exclusive right to the information as such; independent creation and reverse engineering of lawfully acquired products are generally permitted under applicable law. 6.3 Ownership, Creation and Employee Know-How As a general rule, the employer is deemed to own the know-how created by an employee in the course of their employment, provided that the know-how is considered a trade secret, was created during work- ing hours or using the employer’s resources, and that its creation falls within the scope of the employee’s regular duties or the field for which the employee was hired. Unlike in the case of employees, there is no automatic transfer of ownership of know-how creat- ed by contractors, consultants, or joint development partners. Instead, the creator of the know-how also owns it, unless otherwise agreed.
access, breach of confidentiality obligations or other improper conduct. The use or disclosure of a trade secret is unlawful if the person knew or ought to have known that the information had been obtained through such conduct. Employees are subject to a duty of loyalty during their employment and may not exploit or disclose trade secrets. Following termination of employment, liabil- ity is more limited and generally requires exceptional circumstances. In commercial relationships, including joint ventures, the handling of trade secrets if often governed by agreements, although the statutory rules apply in parallel. 5.4 Duration and Loss of Protection The Swedish Trade Secrets Act does not provide for any fixed period of protection. Instead, protection is conditional upon the information meeting the statu- ary criteria of a trade secret: it must be secret, have commercial value by virtue of its secrecy, and have been subject to reasonable measures to keep it con- fidential. 5.5 Enforcement and Remedies Trade secrets are not considered to be intellectual property rights per se under Swedish law. Neverthe- less, the Trade Secrets Act provides for criminal sanc- tions for corporate espionage or unlawful dealing in a trade secret. The sentences for such crimes are, depending on the severity, fines or imprisonment. Under the Trade Secrets Act, it is also, inter alia, pos- sible to claim damages as well as interim and final injunctions (under penalty of fine) and security meas- ures to stop an infringement. In order to preserve confidentiality during litigation, it is possible to request that certain parts of the case file and proceedings shall be kept confidential on the grounds that it contains sensitive information related to business and operational matters (ie, trade secrets). Only these specific parts are kept confidential; the remainder of the proceedings is generally public.
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