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FI – Finnish Supreme Court Assessed Prerequisites for Preservation of Evidence and Access to Evidence in IPR Cases

Posted: March 27th, 2019

The Finnish Supreme Court rendered recently a precedent KKO 2019:10 clarifying prerequisites for measures for preserving evidence under the Finnish Act on Preserving Evidence in Industrial Property Rights and Copyright Matters (the “APE”) and the applicant’s right to access the evidence that has been preserved pursuant to the APE.

The case was about a patent holder’s application for preservation of certain accounting materials and customer information by copying such materials stored in the defendant’s archives and information systems.

The Supreme Court’s decision
The prerequisites that the Supreme Court addressed in its decision were
(a) presumed evidentiary value of the evidence requested to be preserved;
(b) danger of destruction of the evidence requested to be preserved (“danger requirement”); and
(c) the balance of interests.

The APE requires that the evidence to be seized or otherwise preserved may be presumed to have evidentiary value in an IPR infringement case. In its decision, the Supreme Court assessed this criterion, inter alia, in relation to the evidentiary value of other evidence available to the applicant. The Supreme Court accepted the application with regard to materials that could be presumed to prove the duration, extent and financial meaning of the infringement, and dismissed it with regard to documentation that could not be presumed to have evidentiary value over the evidence the applicant had already presented in the case.

With regard to the danger requirement, the Supreme Court stated that the APE does not require the danger of destruction of the evidence is apparent or likely. A mere claim of a danger is sufficient if the claimed danger is not impossible or highly improbable. On these grounds, the Supreme Court overturned the Market Court’s decision to dismiss the application with regard to accounting materials because it is easily destroyable. The Market Court had ruled that the statutory retention obligations made it highly improbable that the evidence would be destroyed.

The APE further requires that a precautionary measure to preserve evidence must not cause the defendant unreasonable harm compared to the interests protected by the measure. When evaluating this balance of interests, the Supreme Court had to consider the defendant’s right to protect its trade secrets. The Supreme Court concluded that the balance of interests must be considered in two stages, first with regard to the precautionary measure itself and then separately with regard to the applicant’s right to access the evidence. In relation to the precautionary measure the Supreme Court found that the bailiff’s copying of the evidence would not cause disclosure of trade secrets or cause any other significant harm to the defendant. Therefore, the interest to preserve the evidence spoke in favor granting the requested precautionary measure.

When assessing the applicant’s right to access the evidence the Supreme Court applied Section 7 a of the APE, which is the Finnish implementation of Article 8 of Directive 2004/48/EC (the “Enforcement Directive”), and the Code of Judicial Proceedings that provides for a right to refuse testifying on trade secrets. The Supreme Court found that the evidence it ordered to be preserved was important for securing the applicant’s opportunity to pursue his infringement case against the defendant.

Furthermore, the preserved evidence was limited to evidence concerning the infringing products (the defendant had not disputed the infringement). Thus, there was no risk that the defendant’s trade secrets would be disclosed to the applicant more broadly than what was necessary for securing proper examination of different elements of the infringement at hand. Therefore, the Supreme Court found that no imbalanced harm would be caused to the defendant from granting the applicant’s representatives and counsel a right to access to the evidence.

Analysis
The Supreme Court’s reasoning on the meaning and significance of the evidentiary value of the evidence to be secured confirms that the legal state correspond to what one that could be expected on the basis of the wording and preparatory works of the APE.

The assessment of the danger requirement in turn confirms that the same yardstick that is applicable to other kinds of precautionary measures applies also to precautionary measures to preserve evidence. Thus, the Supreme Court’s decision is a welcome clarification and correction of the Market Court decision that was arguably in contradiction with previous Supreme Court case law on other kinds of precautionary measures as well as previous Market Court case law on precautionary measures to preserve evidence.

The most important takeaways from the Supreme Court’s decision, however, concern the balance of interests and right to access the evidence subject to a precautionary measure. First, the right to access the evidence needs to be requested and assessed separately from actual precautionary measures. This has not been clear based on the APE or earlier, rather scarce case law on its application. Furthermore, according to the Supreme Court, the assessment of the balance of interest follows this same two-stage approach. This indicates that the balance of interests should not prevent a court from ordering precautionary measure to preserve evidence very often—at least if only copying of the evidence is requested. These parts of the Supreme Court’s decision give very helpful guidance for future application of the APE.

In contrast, the Supreme Court’s conclusion that Section 7 a of the APE (Article 8 of the Enforcement Directive) would govern the applicant’s right to access the evidence that has been preserved by a precautionary measure is, in my opinion, an unfortunate misinterpretation of that provision. The wording, preambles and structure of the Enforcement Directive as well as the wording and preparatory works and structure of the APE all support the conclusion that Section 7 a of the APE does not regulate this issue at all. It seems clear that it provides an additional, independent remedy that IPR holders may utilize when claiming damages or trying to enforce their rights against infringers on different levels of a supply chain.

Headnote and summary: Juhani Sinkkonen, Roschier, Attorneys Ltd.

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