In Sweden, court injunctions may be issued for a variety of purposes under both marketing law and intellectual property law. Injunctions, such as prohibitions and orders to provide information, will normally be issued subject to a default fine, with separate enforcement proceedings for payment of the fine in case of breach. The fine is payable to the Swedish state. Accordingly, in order to satisfy the interest of legal certainty and to allow for effective enforcement, the scope of, and instructions in relation to, an injunction must be correct, unambiguous and exhaustive. The party against whom the injunction is granted must be able to understand the scope of the injunction. For example, it is not possible to prohibit someone from committing an infringement or a marketing law violation as such. On the other hand, for an injunction to have the intended effect, it should not be given an overly narrow formulation. After all, the injunction ought to compel the addressee to do (or refrain from doing) something. Accordingly, when deciding on the scope of the injunction, which must always be done within the scope of the claimant’s claim, the court must balance the protection of the claimant’s rights with the protection of the defendant’s interests and legitimate public interests.
In Swedish intellectual property law, according to the preparatory works and leading case law, this balancing exercise includes a requirement to carefully specify the specific actions that constitute the demonstrated infringement. For instance, it is not sufficiently precise to also include “similar” or “corresponding” actions in the formulation of the injunction. Accordingly, contemporary case law from the Swedish Patent and Market Court of Appeal (the “PMCA”) clarifies that, in intellectual property litigation, an injunction must not comprise anything but the infringing party’s actual (confirmed) use of the claimant’s intellectual property. For instance, in its judgement of 12 October 2018, in Case No. PMÖ 7579-18 (Stadium vs H&M), the PMCA has applied this principle as follows, in respect of trademark infringement:
“Stadium has not claimed that companies in the H&M Group have marketed or sold any other goods infringing Stadium’s rights than long and short-sleeved sweaters. Therefore, the prohibition should not include any other kind of clothing or goods.
Furthermore, Stadium has not claimed that companies in the H&M Group have disposed of sweaters in any other way than through sales. The prohibition should therefore not include any use other than marketing and sales.”
Obviously, there are many similarities between intellectual property law and marketing law. For example, in trademark, design and copyright litigation, the points at issue may largely be the same as in marketing law litigation regarding use of allegedly misleadingly similar or identical signs or products. Generally, in this type of litigation, a central task for the court is to assess whether an injunction is justified to prevent marketing activities that could mislead end customers. Hence, Swedish courts have regularly looked at intellectual property law rules and principles to make comparisons and to find adequate solutions to marketing law issues. In fact, the close relation between intellectual property law and marketing law was one of the reasons for the recent establishment of the specialized Patent and Market Courts in Sweden.
At the same time, as emphasized by the PMCA (e.g. in Case No. PMT 10485-16), intellectual property law and marketing law are also different. The main objective of the Swedish Marketing Act (2008:486) is to protect consumers. Therefore, as highlighted by the PMCA (e.g. in Case No. PMT 8457-16), in order to fulfil its purpose a marketing law injunction should be allowed to cover not only the concrete violations committed by the addressee, but also other equivalent actions. However, according to the PMCA, the scope and wording of the injunction must also be correct, unambiguous and exhaustive in marketing law litigation.
A recent judgment from the Swedish Supreme Court (Case No. T 2286-18) confirms that there is indeed a difference between the permitted scope of injunctions in intellectual property cases and marketing law cases, respectively, albeit the Supreme Court’s ruling does not explicitly refer to intellectual property law. The Supreme Court’s reasoning serves as valuable guideline for companies, authorities and other parties who are involved in claiming, defending against or making decisions on injunctive relief under Swedish marketing law.
Set forth below is a brief summary of the case and its outcome.
Having received hundreds of consumer complaints against a Swedish businessman and his telemarketing company (the “Defendants”), the Swedish Consumer Ombudsman (the “CO”) took the case to the Patent and Market Court (the “PMC”). The CO demanded, inter alia, that the Defendants be ordered to clearly inform, in telemarketing aimed at consumers, about the Defendants’ intent to sell a subscription to “products”. The CO also requested that the Defendants be prohibited from demanding payment for a “product” that has not been ordered by the consumer. The CO also made a few additional claims, one of which requested an information order relating to “security services”.
The PMC issued the injunctions as such, subject to default fines. However, with reference to earlier case law from the Swedish Supreme Court and the Svea Court of Appeal regarding protection of intellectual property and trade secrets, the PMC considered that each scope should be limited to the Defendants’ actual violations. For this reason, the CO’s general references to “products” were not accepted by the PMC. The issued injunctions were thus limited to “dental care products, keychains and razors” and the requested reference to “security services” was replaced by a restriction to “keychains” (cf. Case No. PMT 8457-16).
The CO appealed the decision, arguing that this restriction was not justified as it would increase the risk of circumvention of the injunctions. In marketing law, the CO argued, focus lies on the unfair behaviour rather than on the specific product that has been marketed. Therefore, the CO continued, marketing law injunctions should be drafted with a focus on the unfair marketing measure as such and, to a certain extent, on the marketing channel employed.
The PMCA’s reasoning may be summarized as follows. Marketing law has a strong consumer protection interest. There are important differences between marketing law and intellectual property law. For this reason, marketing law injunctions may, in addition to covering the actual violations made by the addressee, include other equivalent actions as well. At the same time, marketing law injunctions must (as must intellectual property injunctions) be clarified and thus specified so that the addressee understands what he must or must not do. A marketing law injunction must satisfy the basic requirement that the scope be correct, unambiguous and exhaustive. Accordingly, although the scope of a marketing injunction may be extended to include similar measures, products or services, the injunction must adequately specify these measures, products or services. For example, merely adding the words “similar products” would not satisfy the clarity requirements.
Having said this, the PMCA considered that the PMC’s reference to “razors” (cf. above) should be replaced by the expression “shaving products” and that the PMC’s reference to “dental care products” and “keychains” should be kept. The CO’s reference to “security services”, altered by the PMC to “keychains” (cf. above), was replaced by the expression “subscription to a service related to keychains” (cf. Case No. PMT 8457-16).
The CO appealed the PMCA’s decision, maintaining that the injunctions should be generalized and not restricted to certain specified products or types of products.
On 22 November 2018, the Swedish Supreme Court finally decided the case. The Supreme Court’s reasoning listed certain factors that, according to the Supreme Court, were decisive for the formulation and scope of injunctions under the Swedish Marketing Act (the “MA”).
The Supreme Court’s reasoning may be summarized as follows.
Firstly, for an injunction to have the intended effect, it should not be given an overly restricted formulation. The addressee should not be able to circumvent the injunction by making an insignificant adjustment of a marketing statement or similar, and then continue with a type of behaviour that is in fact the same as that which caused the court’s intervention. The decision should therefore be formulated to cover both the concrete behaviour that has been tried by the court and other practically or essentially equivalent actions. For reasons of legal certainty, however, an injunction must be concretized to clearly state what kind of action(s) it covers.
Secondly, the purpose of the MA is to promote the interests of consumers and business in connection with the marketing of products and to prevent marketing that is unfair to consumers and traders. The MA applies, inter alia, when traders market products as part of their business activity. The rules of the MA largely aim at situations in which a trader markets particular goods, services, real property, employment opportunities and other commodities
(all of which are defined as “products” under the MA). It is the actual marketing that has taken place that may result in an injunction under the MA. This suggests that injunctions should be drafted to clarify not only what behaviour but also what type of products the injunction relates to.
Thirdly, an injunction is an individualized response to a form of illicit behaviour, with a related sanction. The individualized response is a result of the addressee’s breach of the law. An injunction should therefore be designed to clearly relate to the breach that has in fact occurred.
Accordingly, an injunction issued under the MA should, within the scope of the claimant’s claim, be designed in such a way that it clearly and precisely describes, to the addressee, both the type of marketing and the product category or categories concerned.
For the reasons stated above, the Supreme Court confirmed the PMCA’s decision and, hence, did not change the scope of the injunctions that had been decided by the PMCA (cf. above).
The Supreme Court’s decision clarifies a very important issue: what the scope of a marketing law injunction should be when it is granted. Quite often, for obvious reasons, claimants are interested in comprehensive scopes, whereas defendants are inclined to request very narrow scopes. In my opinion, when filing a summons application, it is far too common that the claimant requests a prohibition and/or court order covering not only the concrete behaviour (or lack thereof) and product(s) that will in fact be tried by the court, but also “similar” or “equivalent” actions, omissions and products. Defendants, on the other hand, regularly assert intellectual property law principles to restrict the scope of a possible marketing law injunction to the actual and specific violation(s) made. In my view, the Supreme Court has established a proper balance between these two positions. In the long run, this decision can hopefully lead to more effective marketing law litigation in Sweden, where the parties spend less time and resources on elaborate discussions about the scope of the possible injunction and focus more on the legal and factual issues of the case itself.