Sweden: Labour Court considers the assessment of damages for cases involving Trade Secrets

An employee has, after the termination of the employment, together with a business partner started a company that carries out business in competition with the employee’s previous employer. The former employer has, inter alia, created a spreadsheet program and a personnel handbook. The employee has produced copies of the spreadsheet program and the personnel handbook, and therefore intentionally infringed in the former employer’s copyright. Furthermore, the spreadsheet program constitutes a trade secret which the employee learned in the course of his employment. The employee has used the spreadsheet in his new business in order to make calculations, and he has also made the program available to his business partner. Therefore, the Court found that the employee had misappropriated the trade secret. The Court found that both the employee’s misappropriation of the trade secret and the infringement of the copyright were carried out in his employment with the new company or at least in work on behalf of the new company. Considering, among other things, that the employee during the misappropriation and the infringement used data files that he learned in course of this employment and that he – as a partner and business leader in the new company – has significant influence in the company, there are exceptional reasons to impose personal liability to the employee.

Regarding the determination of damages in the event of misappropriation of trade secrets pursuant to the Swedish Trade Secret Act, the Court stated the following. When the Court assessed damages under the former Trade Secret Act, the Court made a division between financial damages and non-financial damages. However, after a review of the damages provision in the Swedish Copyrights Act and the damages provision in the current Trade Secret Act, the Court concludes that when applying the current Trade Secret Act, no division should be made between financial damages and non-financial damages.

For more information on these articles or any other issues involving labour and employment matters in Sweden, please contact Robert Stromberg (Partner) of Cederquist at robert.stromberg@cederquist.se or visit www.cederquist.se.