Trade Secret Protection in Sweden under the Trade Secrets Act

Protecting trade secrets in Sweden, as in any other developed country, is extremely important. It plays a core role in maintaining competitiveness, promoting innovation, and protecting the economic interests of businesses. In the business market, business secrets are the ultimate competitive weapon of enterprises. It is a shield that protects innovative ideas and unique formulas, helping businesses make a difference and dominate the market. Protecting these secrets not only helps businesses maintain a competitive advantage but also prevents competitors from copying and weakening their position in the market. Therefore, Viet An Law would like to guide customers on how to protect trade secrets in Sweden through the article below.

Preliminary definition of trade secrets in Sweden under the Trade Secrets Act

Sweden has officially included trade secrets in the legal framework for protection through the Trade Secrets Act of 2018, which follows the European Union Directive. This act is intended to protect important trade secrets, such as manufacturing formulas, product designs, or business plans, from theft or unauthorized use.

To be protected, trade secrets must meet the following criteria:

• Exclusivity: Information must be proprietary, not publicly available, or easily accessible.
• Economic value: Information must bring economic value to the business, which can help the business create a competitive advantage.
• Protective measures: Businesses must prove that they have taken reasonable measures to keep such information confidential.

Examples of Trade Secrets in Sweden under the Trade Secrets Act

In industry

• Manufacturing formulas: Pharmaceutical, food, and beverage companies often own unique production formulas, which are the secret to creating high-quality and differentiated products.
• Product design: Companies that design cars, mobile phones, and home appliances often have unique designs that are protected as trade secrets.
• Production process: Many companies use special production processes to reduce costs and improve product quality.
• Software and algorithms: Technology companies often develop proprietary software and algorithms, which are at the core of their products and services.

In other industries

• Customer data: Detailed information about customers, including purchase history, preferences, is an extremely valuable asset of retail and service companies.
• Business plan: Long-term business plans, marketing strategies, and financial forecasts are important internal information of a business.
• Distribution Network: Exclusive distribution channels, supplier relationships, are important competitive advantages of many businesses.

Specific examples

• IKEA: IKEA’ s manufacturing secrets for wood products can include unique product designs and unique distribution systems.
• Volvo: This Swedish car company owns many safe and environmentally friendly car manufacturing technologies, which are protected as trade secrets.
• Spotify: This online music platform has unique algorithms to analyze listener preferences and make appropriate song suggestions.

Violations of trade secret protection in Sweden under the Trade Secrets Act

The Swedish Trade Secrets Act also specifies violations, including:

• Unauthorized appropriation: Unauthorized access, copying or use of confidential information.
• Information Mining: Using information to make a profit or harm competitors.
• Disclosure of Information: Sharing information with third parties without permission.

A notable new point is that the law no longer recognizes the case of “obtaining secrets in good faith”. This means that, even if an individual inadvertently gains access to confidential information, they are still obligated to keep it confidential and not to use it.

Trade secret protections in Sweden

Sweden has very strict and comprehensive regulations to protect trade secrets, in order to create a fair business environment and encourage innovation. Here are some of the main trade secret protection measures in Sweden through current legal documents:

• Require owners to take reasonable safeguards: Businesses must demonstrate that they have taken the necessary measures to keep information confidential, such as:
  • Signing confidentiality contracts: With employees, partners, suppliers…
  • Restrict Access: Allow only authorized people to access confidential information.
  • Use of security technology: Data encryption, firewalls, authentication systems…
  • Awareness training: Educate employees about the importance of protecting trade secrets and related regulations.
• Strictly handle violations:
  • Unauthorized appropriation: Unauthorized access, copying or use of confidential information.
  • Information Mining: Using information to make a profit or harm competitors.
  • Disclosure of Information: Sharing information with third parties without permission.
• Trade Secret Protection in Proceedings: Confidential information is protected even when used in litigation.
• Compensation for damages: The violator may have to compensate the owner of the trade secret for damages.