The other price of committing patent infringement we usually do not talk about

If you are protective of your trade information in respect of your competitors, this recent case gives both parties of a patent dispute guidance of intellectual property strategies to achieve Return-On-Innovation.

This spring, the Swedish Superior patent and market Court (PMÖ) had to decide if an order obligating a defendant to expose probable trade secret information was justifiable or not (PMÖ Nr. 6806-17). The case concerned a (at the time being) ongoing patent infringement between two competitors in the alpine clothing and device market.

The case

In the ongoing patent infringement case, the appellant´s attorney´s successfully showed that the plaintiff most likely had committed patent infringement and had as well clearly formulated the content of the desired order. The Superior court´s job was to decide what impact the relationship between the appellant and the plaintiff had concerning the order (to expose sensate information) – And to what extent it mattered. The Superior court also had to decide what kind of information was reasonable to be exposed by the defendant.

The conclusion

The court highlighted that it was necessary to consider the relationship between the appellant and the plaintiff, as well as the impact the disclosure of the information had on the competition between the parties. Besides agreeing with the lower instance as regards the likelihood of committed patent infringement, the Superior court brought attention to three aspects that you should think about when forming your order.

3 key pieces when creating your next order for information disclosure:

  1. Explicit formulated – What information are you asking for exactly?
  2. Proportionate – Is required effort by the plaintiff reasonable in relation to the damages and subject?
  3. Possible to perform – How difficult will it be to collect the information?

The claim order was however amended by the Superior court, excluding information of the number of manufactured products in Poland by another company, (also the patent did not have protection in that territory). The Superior court decided that the obligation to disclose concerned the number of products being manufactured AND imported into Sweden. The duty of disclosure claim made by the appellant was rejected by the Superior court since there were no special reasons why the defendant would destroy evidence or similar.

Since there were no other smaller interfering actions that could accomplish the same result, i.e. calculating the damage of the patent infringement, the Superior court considered the order to be proportionable. The plaintiff was ordered to provide the appellant information of:

  1. the amount of important product and the price for that transaction,
  2. the amount of sales and the profit for that transaction,
  3. how the plaintiff had contacted businesses in purpose to offer the product in several countries such as Germany, Switzerland, France, Finland etcetera.,
  4. as well as the number of products and the profit.

The effect

The Superior court´s decision shows that you should be careful about what you wish for, in particular, how you design your wish.

You should deliver clear argumentation of why, how and what your legal claim should consist of to be successful in legal argumentation.

This decision also shows that infringers need to consider not only the price tag of litigation (compensation of the appellant´s damages and litigation costs), but also consider however it is worth disclosing sensitive information (in order to calculate the cost). Business information disclosure could constitute the most expensive factor in the long term.

My final advice

You are not eager to disclose trade information to your competitors, right? Keep the risk of disclosing such in mind if you are considering copying others technical solutions for your benefit. If you are uncertain however the technology is covered by patent protection, remember that a freedom-to-operate analysis can help you to understand the technical landscape, among others.

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