Finland: Intellectual Property Enforcement

This article first appeared in IP Value 2005, Building and enforcing intellectual property value, An international guide for the boardroom.

Finland has a technology-intensive industry both in the traditional mechanical (often paper and pulp related) as well as in the electronic, IT and biotech sectors. The most successful technology company during the past few years has without doubt been Nokia. These industries carefully consider the governance of trade secrets, patent strategy, product design and branding which all are factors having an effect on domestic and international success.

The increased demand for entertainment, whether in musical, film or multimedia format, requires a new approach to copyright protection, distribution rights and neighbouring rights. The easy distribution of wireless entertainment also means new standards for the governance and enforcement of intellectual property rights.

The protection of IP and effective enforcement is an essential element for developing and improving innovation and creativity. On most scores Finland has well-functioning IP and enforcement legislation, but some historical and current shortcomings still affect business. As an example, it was not possible to apply for product patents for pharmaceuticals before 1st January 1995. In retrospect this seems to have had a negative effect on innovation in the Finnish pharmaceutical and biotech industry.

The purpose of this article is to give a brief introduction to the Finnish environment for the enforcement of intellectual property rights.

When addressing the enforcement of intellectual property rights in Finland, a distinction must be made between patents, trademarks, copyright and unfair competition (including trade secrets). The enforcement of petty patents, registered plant rights and integrated circuits on a general level follows the proceedings for patent infringement.

In patent and trademark matters, enforcement of rights has in the first instance been concentrated in the hands of a specialised division of the District Court of Helsinki. The same court must handle some copyright matters but most copyright enforcement actions should be initiated at the district court closest to the domicile of the defendant. Matters concerning unfair competition and use of others’ trade secrets are handled by a separate court, the Market Court, which specialises in matters relating to competition, unfair competition and consumer law.

The rulings of the district courts can be appealed to the Court of Appeals and the rulings of the Court of Appeals can be appealed to the Supreme Court, provided that leave for appeal is granted. The rulings of the Market Court can be appealed to the Supreme Court.

IP enforcement is often a matter of reacting quickly and in a fast-developing business environment slow-moving litigation does not usually fit into the business strategy. However, if interlocutory relief is available at an early stage of the proceedings, the main proceedings may continue for a longer time without harming effective enforcement of intellectual property rights.

Proceedings before the courts of first instance (including the Market Court) usually take about one year, unless the matter is complicated or delayed by the activities (or usually lack of activity) of the parties involved. Patent lawsuits tend to be more complex requiring extensive technical argument, which can prolong proceedings.

Appeals proceedings in intellectual property matters usually take place before the Helsinki Court of Appeals and generally take one-and-a-half to two years. The Supreme Court again decides whether to grant leave for appeal within six months and, if leave is granted, a ruling is given in about one year.

One important aspect when considering time issues is that in infringement proceedings concerning registered rights, including patents, registered designs and trademarks, it is (in particular in patent matters) probable that the defendant may initiate invalidation proceedings against the registered right. A Finnish court would normally stay infringement proceedings until there is a final decision in the invalidation proceedings. This means that the time span for, say, a patent infringement proceeding may easily double.

The Finnish Procedural Code, as well as individual intellectual property right laws, provides for the ability to obtain interlocutory relief. The Finnish customs applies the EU Counterfeit Regulation laying down measures to prohibit the release for free circulation of counterfeit goods (3842/86) efficiently, which makes a good starting point for battling IP piracy.

Interlocutory relief can be sought both prior to and during the main intellectual property proceedings. However, Finnish courts have been reluctant to grant interlocutory injunctions, in particular in patent infringement lawsuits.

As mentioned in the introduction, the District Court of Helsinki has a specific division appointed for intellectual property matters. In patent matters the judges are assisted by two court-appointed technical experts in the field of the patent subject to dispute. The court-appointed technical experts do not have voting rights in the panel but they render an opinion (or if they disagree, two opinions) on the technical questions relevant for the disputes. The opinion of the technical experts is usually followed by the judge(s). In patent invalidation matters the District Court shall, and in patent infringement matters the court may, obtain the opinion of the National Board of Patents and Registrations.

The Court of Appeals and the Supreme Court do not have a regulated specialisation in intellectual property matters, and the expertise of the judges in both courts is based on tradition and long-term professional experience.

The Market Court specialises in disputes involving competition law, unfair business practices and consumer law. The tribunal of the Market Court is composed of professional judges and representatives of the business community and consumer interest organisations.

The exclusive rights conferred by an intellectual property right generally include, among other things, the right to prohibit third parties from using such intellectual property.

The intellectual property owner can initiate action for damages. The compensation awarded for unauthorised use of intellectual property is generally based upon calculation of a reasonable licence fee. If the infringement is wilful or negligent, compensation for additional damages can also be awarded. In general, the level of compensation awarded by Finnish courts is rather low. Compensations should be seen as compensation for the right owner’s true damages and not as a punishment for the infringer. Punitive damages are not awarded under Finnish law.

The court may, upon the request of the intellectual property owner, order that an infringing product be confiscated.

To ensure that Finnish law is in compliance with the TRIPs Agreement, the Act regarding Preservation of Evidence in Civil Cases Concerning Intellectual Property Rights was adopted in March 2000. The Act enables the court to order that material that may be of importance in a civil case relating to intellectual property rights be seized. In addition, more severe measures can be taken to preserve or obtain evidence.

Alternative forms of dispute resolution have been widely discussed in Finland and the Finnish Bar Association has a programme for mediation.

Alternative dispute resolution developments have, with the exception of the international procedures for domain name disputes, not become frequently used when enforcing intellectual property rights in Finland. Consequently, the civil courts handle most intellectual property matters. It may, however, be observed that most conflicts are settled outside the court or before the final ruling of the court.

The Finnish government has acknowledged the importance of specialised intellectual property courts and nominated a working committee for the preparation of a more specialised IP judiciary. The working committee is expected to present its proposal in the late autumn of 2004.

The EU Directive on IP Enforcement (2004/481/EC) requires the Finnish government to review and improve the legislation related to enforcement of IP rights. This is, in particular, with regard to interlocutory injunctions and access to evidence, a possibility for improvement for the IP right holders in Finland. The Enforcement Directive shall be implemented by 30th April 2006.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.