Finland: Intellectual Property In Finland

This article first appeared in the Globe White Page IP Guide - Building and enforcing intellectual property value

The importance of having an intellectual property rights strategy as an integral part of overall business strategy is widely recognised. Behind most successful business stories there is also a successful building of and management of intellectual property rights. In Finland’s technology intensive sectors, encompassing traditional mechanical (and often paper & pulp related), as well as high tech electronic, IT and biotech industries, carefully considered policies on trade secret protection, patent strategy, product design and branding are all dominant factors effecting domestic and international success. The increased demand for entertainment, whether in musical, film or multimedia format, requires new considerations for the scope of copyright protection, distribution and neighbouring rights. The easy distribution of wireless entertainment also puts new standards on the enforcement of intellectual property rights. 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 follow the proceedings for patent infringement.

In patent and trademark matters enforcement of rights is in the first instance handled by a specialised division of the District Court of Helsinki. Some copyright matters are also handled there, although most copyright enforcement actions should be initiated at the district court of the domicile of the defendant. Matters concerning unfair competition and use of other’s trade secrets are handled by a separate court, the Market Court, specialised 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, as well as Market Court rulings, can be appealed to the Supreme Court, provided that leave for appeal is granted.

Intellectual property enforcement is often a matter of reacting fast and in the 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 very complicated or delayed by the activities (or usually lack of activity) of the parties involved. Patent lawsuits tend to be more complicated, requiring extensive technical argumentation, which often prolongs the proceedings.

Appeals proceedings in intellectual property matters usually take place before the Helsinki Court of Appeals and these 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 the time aspect is that in infringement proceedings in matters concerning registered rights, including patents, registered designs and trademarks, it is (in particular in patent matters) foreseeable that the defendant may initiate invalidation proceedings against the validity of 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 eg patent infringement proceedings may easily double.

The Finnish Procedural Code, as well as individual intellectual property right laws, provide for the possibility of obtaining interlocutory relief. The Finnish customs apply 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 IPR-piracy.

Interlocutory relief can be sought both prior to and during the main intellectual property proceedings. Traditionally Finnish courts have been reluctant to grant interlocutory injunctions, but after the introduction of new procedural rules for interlocutory relief in 1991, the courts have gradually become more positive with regard to granting interlocutory relief, also when it comes to intellectual property enforcement. Interlocutory relief has lately even been granted on a temporary basis without hearing the adversary in situations where the infringement has been deemed to cause significant harm to the rightowner, in comparison with the harm caused by the temporary injunction to the alleged infringer.

As mentioned above, the District Court of Helsinki has a specific division appointed for certain 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 is in the instances of appeal based on tradition and long-term professional experience.

The Market Court is specialised 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 right conferred by an intellectual property right always includes, among other things, the right to prohibit third parties from using such intellectual property.

Action for damages can be initiated by the intellectual property owner. 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 rightowner’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 rightowner, order that an infringing product be confiscated.

To ensure that Finnish law is in compliance with the TRIPS Agreement, an 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 such material that could be of importance in a civil case relating to infringement of intellectual property rights shall 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 the training of mediators. The Government has also made preparations for legislatory changes that would promote alternative dispute resolution/mediation before full court litigation.

The 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. This is because, for example, invalidation action against registered rights is ineffective with regard to the registration authority, unless the decision has been made by a competent court. Therefore most intellectual property matters are handled by the civil courts. It may, however, be observed that a lot of conflicts are settled outside the court or prior to the final ruling of the court.

The recent developments in IPR litigation have involved an increased amount of applications for interlocutory relief, which has caused the Finnish courts to consider the importance of granting interlocutory relief. Interlocutory relief has also been granted in some cases where the courts have found that the applications are well founded. We can expect to see more of these in the future. One of the most active industrial fields in this respect is the pharmaceutical industry, for which the interlocutory injunctions in patent infringement matters is of utmost importance.

The discussion around the community patent and an EU patent court has also been ongoing in Finland. The Finnish Government has acknowledged the importance of specialised intellectual property courts and measures are being taken in order to meet the increasing demands in this field.