Litigation and eligibility: Sweden

Q: What options are open to a patent owner seeking to enforce its rights in your jurisdiction?

The normal first step is to send a cease and desist letter, including compensation claims for the infringement. In fact, most infringements are stopped and solved this way. However, if this is insufficient, the next step is to bring the case to the Patent and Market Court.

Border measures are also available. It is highly recommended to inform Customs of your IP rights and details on what is protected, as well as from where and how infringing goods may cross the border.

Q: Are parties obliged to undertake mediation/arbitration before bringing a case before the courts? Is this a realistic alternative to litigation?

There are no obligations to undertake mediation or arbitration before bringing a case to court. However, arbitration is the normal dispute resolution procedure in commercial contracts. Sweden, as a well-known neutral country, is commonly identified in international arbitration clauses.

Mediation remains uncommon in Sweden when it comes to IP disputes, but it is the initial route to resolving a dispute if the parties have an international or cross-border agreement.

As long as the parties are established companies, and the dispute does not involve a simple infringement, mediation is the best way to resolve disputes and is a realistic alternative to litigation.

Q: Are there specialist patent or IP courts in your jurisdiction? If not, what level of expertise can litigants expect from the courts?

The Patent and Market Court and the Patent and Market Court of Appeal are specialised courts that came into being on 1 September 2016. Essentially, the two courts hear all cases and matters in Sweden relating to IP law, competition law and marketing law, including:

• patent nullification;
• information injunctions and infringement investigations under the Copyright Act and other enactments;
• trademark registration and the granting of patents;
• criminal cases relating to intellectual property;
• unfair or misleading marketing practices; and
• anti-competition (antitrust) fines and merger restriction.

When deciding cases and matters in these courts, judges with specialist legal expertise and technical and financial experts (specially appointed members of the court) are required. In certain instances only judges are involved, while in other cases and matters the court comprises both judges and specially appointed members. In the majority of criminal cases, both legally trained judges and lay judges are involved in the adjudication process.

Q: Are validity and infringement dealt with together or does your country have a bifurcated system?

The Patent and Market Court normally deals with validity and infringement together, even if the cases are initially formally separated. They are handled separately only if there are particular reasons attached to a certain case.

Q: Who may represent parties engaged in a dispute?

There are no formal requirements that apply to persons representing parties before the court, and no bar on monopoly. However, a court can reject a counsel who does not have the required skills or is otherwise considered unsuited, although this is rare in IP disputes. The normal representatives in a patent dispute are an IP attorney, advokat and/or a certified patent attorney.

Q: To what extent is pre-trial discovery permitted?

Traditional pre-trial discovery, as such, is not available in Sweden; however, Chapter 38, Section 2 of the Code of Justice Procedure provides that anybody in possession of a written document that can be assumed to be of importance to a case is obliged to produce it. The documents requested must be clearly identified and cannot be personal notes. There may also be limitations if the documents identify physical persons not involved in the dispute.

Q: Is cross-examination of witnesses allowed? If so, what form does this take?

Cross-examination of witnesses is allowed and expected.

The examination starts with questions from the attorney that has called the witness, turning then to the other party’s attorney. Swedish practice involves friendly questioning, keeping the witness’s contractual obligations and personal security in mind. Cross-examination normally takes from 15 to 90 minutes, depending on the case.

Q: What use of expert witnesses is permitted?

Expert witnesses are normally appointed by the parties, but may also be appointed by the court (although this is rare). In patent disputes, such witnesses provide statements on the technical matter, but may also be used to present references to international legislation, agreements or market issues. The hearing can be face to face, online or over the telephone (if the expert is in another country), or – if both parties agree – through a written statement only.

Q: Is the doctrine of equivalents applied by courts in your jurisdiction? If so, what form does it take?

Although the doctrine of equivalents is recognised under Swedish patent law and will be considered by the court, a patent owner relying on this will not normally succeed.

Q: Are there problems in enforcing certain types of patent relating to, for example, biotechnology, business methods or software?

Swedish patent law and practice is harmonised with European Patent Office (EPO) practice, meaning that all granted European patents are enforceable in Sweden.

The 1998 EU Biotechnology Directive was implemented into Swedish law on 1 May 2004. This means that most biotechnical inventions are patentable, except:

• pure discoveries;
• plant varieties and animal breeds; and
• inventions contrary to public order or morality, which society regards as unethical and unacceptable (eg, methods for reproductive human cloning).

Business methods are hard to protect.

Software is patentable if the claims are directed to a computer program product.

Q: To what extent are courts obliged to consider previous cases that have covered issues similar to those pertaining to a dispute?

Lower courts follow the decisions of the Supreme Court, but are not formally bound by previous decisions. However, parties’ references to previous decisions may be used as evidence to support legal conclusions and will occasionally be considered by the court.

Q: To what extent are courts willing to consider the way in which the same or similar cases have been dealt with in other jurisdictions? Are decisions from some jurisdictions more persuasive than those from others?

Swedish courts are not bound by the opinions expressed by other courts, or any national or international bodies – with one important exception: the courts frequently refer to EPO Board of Appeal decisions and the EPO Guidelines for Examination. The reason is that Swedish patent law is harmonised with the European Patent Convention.

Q: What realistic options are available to defendants seeking to delay a case? How might a plaintiff counter these?

It is not advisable to seek a delay, especially as the judges of the Patent and Market Court communicate with the parties regarding decent timelines in order to avoid requests for time extensions.

However, if still required, typical delay tactics include holding the case in order to collect new evidence (eg, an expert witness), referring to holidays or – if an international dispute – citing problems in obtaining timely instructions from the client.

The plaintiff can usually get the same time extension if required.

However, the court is free to reject requests for extensions. Requests may also result in a loss of credibility and have negative impact on costs.

Q: Under what circumstances, if any, will a court consider granting a preliminary injunction? How often does this happen?

The court can issue a preliminary injunction, claimed for by the patent owner or licensee, under the penalty of a fine if the claimant shows:

• probable cause that the defendant has infringed the patent; and
• that it can be reasonably feared that the value of the exclusive right to the patent will be diminished by the defendant’s continued infringement.

A preliminary injunction can be issued only if the claimant deposits security with the court, normally in the form of a bank guarantee, to cover compensation for the damage that may be caused to the defendant as a result of the injunction.

Requests for preliminary injunctions are common in infringing cases and are generally accepted by the court.

As the court always makes a general overview of the dispute before accepting a request for a preliminary injunction, this provides an initial indication of the possible final outcome of the case. In other words, a granted preliminary injunction may also be a way to encourage the parties to settle the case out of court.

Q: How much should a litigant budget for in order to take a case through to a decision at first instance?

Somewhere between Skr150,000 and Skr2 million (plus interest), depending on the complexity of the case, the level of evidence needed and how active the counterparty is regarding documentation and arguments. The normal budget is around Skr1 million.

It is also important when calculating legal costs to have in mind that the losing party must pay the winning party’s costs. It is not always easy in practice to collect in full following a win, but it is definitely something to add to your own costs if you lose.

Q: How long should parties expect to wait for a decision to be handed down at first instance?

With the new Patent and Market Court, the normal timeframe from filing a lawsuit to a judgment is about 18 months. However, it also depends on the investigation and evidence provided, as well as the range and complication of the case. Some cases may take up to four years.

Q: To what extent are the winning party’s costs recoverable from the losing party?

The losing party must reimburse the winning party for the latter’s litigation costs. Compensation may be adjusted if a party succeeds partially or if the court finds the claimed expenses to be too high or unnecessary. If the conclusive circumstance in the case was unknown to the unsuccessful party, the court may decide that each party must bear its own costs. The compensation ordered corresponds to reasonable costs of the counsel, the party’s own work, loss of time and production of evidence, including (some) expert witnesses.

Q: What remedies are available to a successful plaintiff?

The typical remedies are injunctions and damages, which are calculated as a reasonable royalty and compensation for further loss. The minimum level is reasonable compensation for the use of the invention. If the infringement is made either wilfully or as a result of negligence, the patentee is also entitled to compensation for further losses caused by the infringement, which normally consist of loss of sales.

Other possible remedies include:

• delivery up or destruction of infringing goods;
• publication of the decision (if so claimed by the claimant);
• recalling the product from the market; and
• fines and imprisonment for up to two years (in criminal cases).

Q: How are damages awards calculated? Are punitive damages available?

Damages awards are calculated in two steps:

• a reasonable royalty, as though the parties had made a normal licence agreement; and
• compensation for further loss, based on the patent owner’s loss of profit (which must be demonstrated in reality), the infringer’s profit and the harm done to the reputation of the invention due to the infringement.

Compensation is the most important part of the award calculation, as it clearly indicates that infringement costs much more than signing a normal licence agreement.

Punitive damages are not allowed under Swedish law.

Q: Under what circumstances might a court grant a permanent injunction? How often does this happen?

A permanent injunction normally follows a successful finding of infringement, if requested by the claimant.

The injunction must reflect the infringing act or the attempted infringing act and refer to the items alleged to infringe the patent. It often includes representatives of a legal entity as co-defendants, so that the injunction can also be effective against them personally.

Q: Does the losing party at first instance have an automatic right of appeal? If not, under what circumstances might leave to appeal be granted?

The losing party has the right to appeal both judgments issued after main proceedings and decisions related to preliminary injunctions. Appeals are filed with the Patent and Market Court of Appeal. All appeals require leave to appeal from the Patent and Market Court of Appeal and are normally granted in patent cases.

Q: How long does it typically take for the appellate decision to be handed down?

Depending on the complexity of the case, the decision is rendered within two to six months from submission. In complex cases, the duration of the appeal proceeding can range from 12 months to more than two years.

Q: Is it possible to take cases beyond the second instance?

Patent cases can be appealed to the Supreme Court; however, for a case to be tried by the Supreme Court, the Patent and Market Court of Appeal must consider the case to involve an issue for which a precedent is needed, then the Supreme Court must grant leave to appeal.

The Supreme Court rarely grants leave to appeal in patent cases, if not considered to be generally important as a case to form or re-form practice in a specific topic.

Q: To what extent do the courts in your jurisdiction have a reputation for being pro-patentee?

The fact that there is now a special Patent and Market Court in Sweden, where the judges have good general knowledge of IP rights and their importance for industry development, as well as the fact that the government has for several years been active in advertising intellectual property and the need for its protection, offers decent grounds for each patent owner to expect a well-considered court decision.

Q: Have courts in your jurisdiction handled cases relating to standard-essential patents and fair, reasonable and non-discriminatory licensing since the ECJ’s Huawei v ZTE decision? If so, what have they decided?

Since Huawei there have been no specific and final cases in Sweden on this topic regarding patent disputes. In general, there are no grounds on which an otherwise valid patent can be deemed unenforceable under Swedish patent legislation.

Q: If they have not handled such cases, how would you expect them to approach the issue?

The Competition Authority is constantly following praxis in other countries, but has so far pointed only to the importance for the industry in general, and that licensing may be an easier path to entry in technology markets than business models based on innovation and manufacturing and may thus stimulate competition. The ‘F’ of FRAND (fair, reasonable and non-discriminatory licensing agreements) is important.

Q: Has your jurisdiction signed the Agreement on the Unified Patent Court? If so, when do you expect it to be ratified?

Following Parliament’s approval of the legislation authorising ratification of the Unified Patent Court Agreement, Sweden’s instrument of ratification was deposited in Brussels on 5 June 2014 with the General Secretariat of the Council of the European Union. Sweden was the third member state (after Austria and France) to take the final step required for ratification to take effect under Article 89(1) of the agreement.

Q: Will your country play host to one or more divisions of the Unified Patent Court?

Sweden, Lithuania, Latvia and Estonia have signed an agreement establishing the Nordic-Baltic Regional Division of the Unified Patent Court. The seat and sub-registry will be in Stockholm, Sweden, and located in the same building as the Stockholm District Court. The intention is for cases to be heard in multiple locations to the greatest extent possible (with each country designating facilities in their country for hearings).

The language of the proceedings will be English.