8 Jan
2021

Sweden

Cirio Advokatbyrå AB

Legislative framework and causes of action

Swedish trademarks are governed by the Trademarks Act (2010:1877), which was updated on 1 January 2019 to implement EU Directive 2015/2436. EU trademarks are governed by EU Regulation 2017/1001.

Sweden is also a party to several international treaties relating to trademarks, including:

  • the Paris Convention for the Protection of Industrial Property;
  • the Agreement on Trade-Related Aspects of Intellectual Property Rights;
  • the Protocol Relating to the Madrid Agreement;
  • the Nice Agreement;
  • the Vienna Agreement; and
  • the Singapore Treaty.

Infringement actions

Infringement actions can be based on the following (collectively, ‘trade symbols’):

  • registered trademarks, which include Swedish trademark registrations, EU trademark registrations and international registrations designating Sweden or the European Union;
  • unregistered trademarks, which are established on the market (ie, where the mark is known as a designation of goods or services in Sweden by a significant part of the relevant consumers) – if the mark is established in only a part of Sweden, the protection is limited to that part;
  • company names, which can be used either through registration or establishment on the market; and
  • personal names, which are used as a sign to designate goods or services and are distinctive – if the personal name is used only in a part of the country, the protection is limited to that part.

Grounds for the infringement action can be that the infringer, in the course of trade, uses a sign that is:

  • identical to the trade symbol and is used in relation to goods or services that are identical to those for which the trade symbol is protected; or
  • identical or similar to the trade symbol and:
    • is used in relation to goods or services identical or similar to those for which the trade symbol is protected, and there exists a likelihood of confusion on the part of the public, which includes the likelihood of association with the trademark; or
    • is used in relation to any goods or services where the trade symbol has a reputation in Sweden and the use of the sign, without due cause, takes unfair advantage of, or is detrimental to, the distinctive character or repute of the trade symbol.

The following is considered ‘use of a trademark’:

  • labelling goods or packaging with the trademark;
  • offering for sale, storing for sale or offering services under the trademark;
  • importing or exporting goods under the trademark;
  • using the trademark as a company name or other trade names as part of a company name or other trademark; and
  • using the trademark in business and commercial activities.

The trademark owner is entitled to prevent all third parties from bringing goods into Sweden, during the course of trade, without being released for free circulation in the country, where such goods, including packaging, come from third countries and, without authorisation, bear a trademark that is identical to the trademark registered in respect of such goods, or which cannot be distinguished in its essential aspects from that trademark. This does not apply, however, if the trademark owner lacks the right under the law of the country of destination to prevent the goods being placed on the market there.

There are certain exceptions to these exclusive rights:

  • parts of a trademark that are not distinctive;
  • use, in accordance with honest business practices, of:
    • its own personal name or address;
    • information about the nature, quality, quantity, intended use, value, geographical origin or time and place of manufacture of the concerned goods or services; and
    • the prior trademark, if this is necessary to indicate the intended purpose of the goods or services, especially in cases concerning accessories and spare parts;
  • use of the mark or sign in advertising to directly or indirectly indicate the trademark owner’s goods or services (comparative advertising) in a manner that is compatible with the Swedish Marketing Act (2008: 486); and
  • use of marks or signs, in the case of collective or certification marks, that indicate the geographical origin, provided that this is done in accordance with honest business practices.

Cancellation actions

A cancellation action can be made as an administrative cancellation request at the Swedish Intellectual Property Office (IPO) or directly at the court. The administrative cancellation proceedings at the Swedish IPO are simplified, meaning that if the request is disputed by the trademark owner, the claimant is referred to the court.

A cancellation can be either in the form of an invalidity action (ex tunc) or a revocation action (ex nunc). Invalidity can be based on both absolute and relative grounds. A revocation action can be based on lack of genuine use for a five-year period or if:

  • the trademark has degenerated through the owner’s passivity;
  • the trademark has become contrary to applicable laws and regulations or public policy or morality; or
  • the trademark has become misleading.

In assessing whether a trademark should be invalidated due to lack of distinctive character, the matter can be resolved if acquired distinctiveness can be demonstrated. However, only such distinctiveness that has been acquired through use prior to the cancellation application can be considered.

Registration of a collective, guarantee or control mark can also be revoked if:

  • the first mark has been used in a manner that is not in accordance with the conditions of use and the owner has taken no reasonable steps to prevent that use;
  • the conditions for the use of the mark have been changed and the owner has not notified the Patent and Registration Office; and
  • the terms of use of the mark have been changed and entered into the trademark register in violation of this law and the conditions remain contrary to the law.

Alternative dispute resolution

Settlement of disputes is strongly encouraged by the courts. The judge will therefore always attempt to settle the dispute if possible. Mediation is available as an alternative in all court proceedings at district court or appeal court level. The court may, if both parties agree, decide that the dispute will be attempted to be resolved through mediation. It is up to the court to decide whether mediation or traditional settlement negotiations will be held.

Arbitration is another possible measure under Swedish law to settle a trademark dispute. Arbitration is, however, seldom used in infringement and invalidity cases, but is instead mostly used in contract disputes where dispute settlement is agreed to be arbitration rather than court proceedings. Arbitration proceedings can be held in accordance with the Swedish Arbitration Act (1999:116) or through other arbitration institutions, such as the Stockholm Chamber of Commerce.

Litigation venue and formats

The Swedish Patent and Market Court has exclusive jurisdiction over all trademark cases in Sweden (as well as almost all other areas of intellectual property and unfair competition law). The Patent and Market Court is also the appeal body for all decisions by the Swedish IPO.

Except for administrative cancellation cases, all trademark cases are initiated through an application for summons filed at the Patent and Market Court. After the Patent and Market Court has issued the summons, the defendant is ordered to submit a statement of defence. Further writs are thereafter generally exchanged before the court schedules a preliminary hearing. At the preliminary hearing, the parties’ respective positions are clarified, and the continued case management is decided on (eg, remaining submissions and scheduling of a court date). The time from application of summons to trial depends on the complexity of the case but is generally one year. In more simple cases, the judgment can be issued only on the submission of the case (ie, without trial), typically a simple invalidity case.

Damages and remedies

The Trademark Act provides for the following remedies in case of trademark infringement:

  • prohibition conditioned on penalty of a fine (injunctive relief);
  • damages;
  • recall and destruction of infringing goods; and
  • spreading of information of the judgment.

In relation to the calculation of damages, where the infringement is made intentionally or through negligence, the infringer should pay reasonable compensation for the use of the trademark, as well as compensation for the additional damages that the infringement has caused. When calculating compensation for additional damages, the following will be considered:

  • lost profit;
  • profit that has been made by the party that committed the infringement;
  • damage caused to the reputation of the trade symbol;
  • moral damage; and
  • the interest of the rights holder in that infringements are not committed.

Anyone who without intent or negligence commits trademark infringement must pay compensation for the exploitation of the trade symbol if and to the extent that this is reasonable. Therefore, the trademark owner is generally always entitled to compensation for the damage caused by the infringement. There is no onus to prove actual loss, or intent or negligence, on the part of the infringer. Historically, this has been made by applying a licence analogy – what would the infringer have had to pay for a licence?

In addition, a preliminary injunction can be issued if the plaintiff shows probable cause that an act implying trademark infringement, or contribution to infringement, is taking place and if it can be reasonably expected that the defendant, through the continuation of that act, or contribution thereto, diminishes the value of the exclusive right in the trademark. A condition for such an injunction is also that the plaintiff deposits security with the court for the damage that may be caused to the defendant. When deciding on the preliminary injunction, the court will make a proportionality assessment where the balance of interests is made. The court will objectively assess that the defendant’s interests in continuing its business is balanced against the applicant’s interests in prohibiting use.

Additional remedies that may be sought include orders to provide information and infringement investigations.

Criminal sanctions

The Trademark Act also provides for criminal liability for infringements that are committed wilfully or with gross negligence. The penalty can be a fine or imprisonment for up to two years. Where the crime is committed intentionally and is considered to be grave, the penalty is imprisonment for a minimum of six months and up to a maximum of six years.

The public prosecutor may bring an act of prosecution for such offences only if the injured party calls for a prosecution of the offence and prosecution is, for specific reasons, called for in the public interest. As such, criminal liability is almost always limited to serious counterfeit offences.

Evidencing the case

As a general rule, all evidence is admissible in Swedish proceedings. The court may refuse evidence if it finds that:

  • a circumstance that a party offers to prove is without importance in the case;
  • the evidence offered is unnecessary or would evidently be of no effect; or
  • the evidence can be presented in another way with considerably less effort or cost.

Types of evidence may, for example, include oral witness statements, affidavits, examination of items and written evidence. Written evidence is submitted through the written submissions in good time before the trial. There is, however, a principle of orality in Swedish courts, meaning that all arguments and evidence must, in principle, be presented orally at trial. It is, however, accepted that written evidence and submissions can be referred to without reading them out word by word. In respect of affidavits, they are permitted in Sweden. However, oral statements are usually evaluated as better evidence. Witnesses and experts are usually heard in full, including cross-examination.

Market surveys are submitted as written evidence. At trial, they are usually complemented by hearing experts regarding their credibility and result.

Available defences

The most common defence will be that there is no infringement. This can be based on, for example, there being no likelihood of confusion or any damage to the trademark function. A defence can also be made that the use is not use of goods or services within the course of trade (ie, there is no commercial use).

In relation to infringement actions based on a mark that has been registered for more than five years, the owner must show genuine use of the goods or services on which the claim is based. If no use can be demonstrated, the claim will be dismissed.

In addition, the trademark owner is not entitled to prohibit use, which is made in accordance with honest practices, in respect of:

  • a party’s name or address;
  • indications concerning the kind, quality, quantity, intended purpose, value, geographical origin or other characteristics of the goods or services, or the time of production of the goods or rendering of the service; or
  • the trade symbol, if it is necessary to indicate the intended purpose of the product or service, in particular as accessories or spare parts.

The defendant may further claim that the goods have been exhausted. This applies to goods put on the market in the European Economic Area with the owner’s consent, provided that the quality of the goods has not been altered or has deteriorated after release on the market or when there are specific circumstances to object to the use.

Acquiescence is also a possible defence. Acquiescence can be argued where a trademark registration has been obtained in good faith and has been used for a period of five consecutive years, for those goods or services covered by such use, provided that the holder of the trademark registration has known about the use and accepted it. Acquiescence can also be argued in relation to non-registered trademark rights where a protected non-registered trademark (ie, an established trademark) is used and the holder of the trademark registration has not taken action within a reasonable time to stop such use.

Finally, the defendant may file a counterclaim for invalidity or revocation of the plaintiff’s mark. This, in most cases, will stay the infringement proceedings pending the outcome of the cancellation action.

There is a statutory limitation relating to the right to claim damages where an action has not been initiated within five years from the time that the damage was caused.

Appeals process

Judgments by the Patent and Market Court may be appealed to the Patent and Market Court of Appeal. Leave to appeal is required but not always granted. Leave to appeal can be given by the Patent and Market Court of Appeal where:

  • there is a reason to change the judgment of the Patent and Market Court;
  • it is needed for the Patent and Market Court of Appeal to assess whether the Patent and Market Court made a correct judgment;
  • it is of prejudicial importance; and
  • there are other reasons to assess the appeal.

In practice, leave to appeal is more easily granted in infringement proceedings than application and opposition matters.

Where the Patent and Market Court of Appeal so decides, its judgment may be appealed to the Supreme Court. Leave to appeal is also required, but is not always granted. In general, the Patent and Market Court of Appeal does not allow its judgments to be appealed where the case is a pure trademark case. Instead, it decides that its judgment can be appealed where the matter concerns legal issues outside of its exclusive competence. The Supreme Court is also very restrictive when granting leave to appeal.

Cirio Advokatbyrå AB

Cirio Advokatbyrå AB

Box 3294

Stockholm 103 65

Sweden

Tel +46 8 527 916 00

Web https://cirio.se/

David Leffler

Senior counsel

[email protected]

Josefine Lundström

Associate

[email protected]

TAGS

Sweden