Jun 2024

Sweden

Law Over Borders Comparative Guide:

Luxury Law

Sections

Scroll down to read the full chapter or click on the headings below to jump to the relevant section.

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1 . Trademark

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1.1. Sources of law

In Sweden the principal sources of law relating to trademarks are:

  • The Trademark Act, which is the central legal framework for trademarks. 
  • The Trademark Regulation, which includes more detailed provisions on the trademark register and the application procedure.
  • The Act on Trade Names, which governs the right to company names and other trade identifiers.

Swedish legislation is highly impacted by EU legislation, such as the EU Trade Marks Directive (EU) 2015/2436 and the EU Trade Mark Regulation (EU) 2017/1001, which ensure a high level of protection for trademarks across the EU and enables registration of trademarks that have a unitary effect in all EU Member States.

Sweden is also a contracting party to several International Conventions such as:

  • The Paris Convention for the Protection of Industrial Property (Paris Convention) and the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement), which set minimum standards for the protection of intellectual property rights by the Member States and provide for a priority right for applicants who file an application for a trademark in one member state to claim the same filing date in another member state within six months. 
  • The Madrid Protocol, which enables applicants to seek protection in multiple countries by filing a single international application.
  • The Nice Agreement, which establishes a classification system for goods and services for the purposes of trademark registration.

Case law from Swedish courts and from the Court of Justice of the European Union (CJEU) and the General Court also offers guidance.

Trademark protection can be obtained through registration either as a national trademark, an EU trademark or through an application under the international system through WIPO. 

Sweden recognises use as a source of trademark rights. Unregistered trademarks can obtain protection through use in commerce if the mark is known by a significant portion of the relevant public. 

Unregistered trademarks may be narrower in scope compared to registered trademarks since they only protect the mark within the specific geographic regions where the mark is sufficiently well-known.

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1.2. Substantive law

Trademarks that are well-known receive a higher level of protection than other trademarks. Well-known trademarks are protected not only within the classes for which they are registered but also across other classes of goods or services if the infringing mark is taking unfair advantage of or harming the reputation or distinctive character of the well-known trademark. 

Trademarks belonging to the luxury industry do not per se receive any specific protection but could enjoy a broader range of protection because they are more likely to be associated and remembered by the relevant public. 

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1.3. Enforcement

In Sweden, the principle of free sifting of evidence applies, allowing a party to present any type of evidence to establish that a trademark is well-known and entitled to (broader) protection. Generally, both written and oral evidence, including expert testimony and market surveys, are produced in enforcement proceedings. Affidavits (written witness statements) are only allowed in certain circumstances.

Besides taking action against other trademarks, proprietors can enforce their trademark rights against other commercial use. Unfair registration and use of domain names under the national top-level domain .se may be actionable through an administrative procedure of Alternative Dispute Resolution (ADR). Confusingly similar trade names may be both prohibited to use and cancelled based on trademark rights.

Action against third party use of trademarks as meta tags is limited and will in principle only be possible if the use is also displayed to the customer, in a heading or similar. 

A trademark can be enforced against its unauthorised use in social media. However, the balancing of the right to freedom of expression is an important consideration and a trademark cannot protect against use for non-commercial purposes, such as purely for expressive purposes. 

A trademark can be enforced against its unauthorised use in comparative advertising if such use creates confusion regarding the commercial origin, leads to damage to the reputation of the trademark or damages the trademark in any other way.

Swedish trademark legislation does not contain any explicit exception allowing for parodies, but if these occur within a non-commercial context they generally fall outside the scope of protection.

A trademark owner can claim both trademark infringement and unfair competition pursuant to the Marketing Practices Act for the same set of facts and in the same proceedings. 

The primary issue luxury brands face in protecting their trademark rights is counterfeiting. The sale of fake products on online platforms is growing fast. To protect their brands, luxury companies may need to create new ways to establish authenticity control and establish more comprehensive enforcement programs. The Digital Services Act (DSA), a uniform legal framework adopted by the European Union which applies from 2023 for some listed platforms and February 2024 for other online platforms, aims to enhance internet security by combatting illegal activities like online counterfeiting and may offer some assistance with respect to enforcement. It mandates that platforms offer users an easy way to report illegal content, such as counterfeit products, and requires marketplaces to strengthen seller oversight.

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2 . Copyright

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2.1. Sources of law

The principal sources of law and regulation relating to copyright are:

  • The Copyright Act and the Copyright Regulation, which is the primary domestic legislation governing copyright.
  • The International Copyright Regulation, which concerns the application of the Copyright Act in respect to foreign countries (due to Sweden’s accession to international conventions concerning copyright).
  • International Treaties and Conventions, including the Berne Convention for the Protection of Literary and Artistic Works, the WIPO Copyright Treaty and the TRIPS Agreement.
  • EU Copyright Directives, including Directives 2001/29/EC (INFOSOC) and (EU) 2019/790 on copyright and related rights in the Digital Single Market.
  • Case law from Swedish courts and the CJEU.

International treaties and EU legislation generally take precedence over domestic legislation in the case of conflict since the domestic legislation must be consistent with and give effect to the treaties and Directives. Codified law is usually considered superior to case law, but case law can provide useful information on how the codified law should be interpreted.

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2.2. Substantive law

The Swedish Copyright Act grants protection to original intellectual creations of literary and artistic character such as:

  • Fictional or descriptive written or oral expressions. 
  • Computer programs. 
  • Musical or dramatic works.
  • Cinematographic works.
  • Photographic works and works of fine art.
  • Architecture and industrial designs. 
  • A work expressed in some other manner.

Sweden follows an open-ended approach, allowing for a wide range of works to be eligible for copyright protection. 

Certain neighbouring rights are also protected such as, for instance, rights granted to producers of catalogues and databases, to performing artists and to producers of sounds and images. 

Any object of industrial, fashion or accessory design may be copyrightable, provided that the work meets the standard of originality (i.e. is the result of the creator’s free and creative choices) and is expressed in a manner that makes it identifiable with sufficient precision and objectivity.

The types of rights protected by copyright are the reproduction right (right to make copies) and the right to make the work available to the public in various ways. Moral rights, including the right to be attributed as author of the work and the right to object to derogatory treatment of the work, are also protected.

Under Swedish law, the physical person who has created the work is the owner of the copyright. Employers can acquire ownership in works created by employees, consultants, shareholders, directors and suppliers by way of contract. However, moral rights cannot be fully transferred to another party, only waived. 

An assignment agreement does not need to fulfil any formal requirements to be valid, but it is highly recommended that the agreement is in writing and explicit as to which rights that are being transferred. Under Swedish law, an unclear assignment is interpreted to the advantage of the creator and deemed not to transfer other rights or usages than those explicitly agreed. The creator of the copyrighted work is always entitled to fair compensation in the case of transfer of rights for the exploitation of their works. 

When employees create copyrighted work within the scope of their employment the employer is sometimes considered to have the right to use the copyrighted work, even if there is no contract in place. However, it is recommended that the employment agreement includes a specific clause which deals with assignments of intellectual property rights.

Copyright protection lasts during the life of the author and for 70 years after the author’s death. 

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2.3. Enforcement

Copyright protection is automatic upon the creation of a work that meets the requirements of originality. There is no formal requirement for registration and no copyright notice or copyright deposit is required to receive protection.

Industrial design objects can be protected if they meet the criteria of originality. The Patent and Market Court of Appeal has recently (on 20 September 2023) requested a preliminary ruling from the CJEU concerning the interpretation of the concept of originality and, in addition, how the similarity assessment should be conducted in infringement proceedings concerning industrial design objects. 

Copyright protection does not only protect against the creation of identical works (actual copying), but also against substantial similarities. The similarity assessment is conducted on a case-by-case basis depending on the work in question. The Swedish Supreme Court has, in an older infringement case concerning a photograph which had been used as inspiration for an oil painting, stated that an overall assessment is to be conducted based on the subjective view that can be assumed shared by a majority (NJA 2017 page 75).

Copyright can in theory be enforced against an infringing trademark, registered design, patent, domain name, trade name and other IP rights. However, in respect to domain names and trade names, it may be difficult to establish that a single word meets the originality standard required for copyright protection.

Copyright can be enforced against unauthorised use in social media and comparative advertising if the copyrighted work is used without the consent of the owner.

Swedish law does not contain any explicit exception for parodies. Parodies have historically been permitted if they distort the shape or content of a copyrighted work, for the purpose of creating a comedic effect which is foreign to the original work. A legislative proposal has recently been presented which suggests that the Copyright Act is amended so that it includes an explicit exception for parodies. 

Swedish law does not recognise the concept of “fair use” or “fair dealing”. Certain limitations to the monopoly of the copyright holder apply, such as the right to make copies for private purposes and quoting the works of others. A copy of a work that the author has consented to being published or transferred within the EEA may also be distributed and publicly exhibited pursuant to the principle of exhaustion of rights.

Common defences invoked by an alleged infringer are: (i) that the work in question does not meet the standard of originality and therefore lacks copyright protection; and/or (ii) that the infringing work is independently created and therefore does not fall within the copyright protection of the latter work. The Copyright Act does not include any provision regarding the time limit for bringing an infringement action (civil claim). The general statute of limitation applies, which is 10 years.

The current issues facing luxury brands in relation to copyright protection are the same as those arising in relation to trademark protection (i.e. counterfeiting, see Section 1.3, above). As previously noted, there is also some uncertainty regarding the interpretation of the originality standard in respect to industrial design objects, which will hopefully be clarified by the CJEU.

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3 . Design

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3.1. Sources of law

In Sweden, designs can be protected in three ways:

  • A registered design at the Swedish Intellectual Property Office.
  • A registered Community design. 
  • An unregistered Community design. 

The principal sources of law are:

  • The Design Protection Act and the Design Protection Ordinance, which govern the protection of designs, the registration process and the rights conferred on the owner of a registered design.
  • Council Regulation (EC) No 6/2002 on Community designs, which sets out the rules for obtaining European design rights.
  • International conventions such as the Paris Convention and the TRIPS Agreement .
  • Case law from the national courts and the CJEU.

As a member of the EU, Sweden is bound by EU legislation, which takes precedent in the event of conflict. Codified law is usually considered superior to case law, but case law can provide useful information on how the codified law should be interpreted.

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3.2. Substantive law

Design protection can be granted to a wide range of products. Both the domestic legislation and the EU-regulation define products eligible for protection as “any industrial or handicraft item, including parts intended to be assembled into a complex product, packaging, get-up, graphic symbols and typographic typefaces, but excluding computer programs”. 

To be eligible for registration, a design must:

  • Be new, in the sense that it has not been disclosed to the public before the filing or priority date. 
  • Have individual character, i.e. give a different overall impression to an informed user than a prior design which has been made available to the public.
  • Not be solely dictated by the product’s technical function.

The design right is primarily granted to the party who has created the design but can be assigned to the employer. With respect to consultants, shareholders and suppliers the assignment needs to be made by way of contract. There are no specific formal requirements for the agreement to be valid, but it is recommended that the agreement is made in writing and clearly sets out the terms for transfer. 

Swedish law does not include a specific provision on the employer’s right to employees’ designs. However, it is generally considered that the employer is entitled to the design even without a specific agreement. It is advisable to include a provision in the employment contract where the assignment is explicitly regulated. Community designs created in the course of the employment are transferred to the employer pursuant to Council Regulation (EC) No 6/2002 on Community designs.

There are no moral rights associated with design comparable to those in respect to copyright.

A registered design is valid for five years from the application date. The registration can be extended for a maximum of 25 years.

An unregistered EU design is valid for three years from the date when it was made public within the EU.

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3.3. New technologies

Non-fungible tokens (NFTs) can offer a way for brands to establish authenticity by linking a unique digital certificate to each item, which may be used to combat counterfeiting. NFTs may, however, also lead to misuse of intellectual property, for instance by the sale of virtual NFTs that are identical to luxury items and rely on the goodwill of the brand. 

The rise of sophisticated artificial intelligence (AI) has impacted the luxury market in several ways, for instance in facilitating customers’ shopping experience through chatbots, more intelligent shopping, smart warehousing and so on, which may raise legal concerns in respect to, e.g., privacy and the use of technology. The rise of AI also leads to questions concerning ownership of AI-generated IP. There is no Swedish regulation on AI which directly affects the luxury market. However, a framework for harmonised rules on artificial intelligence has recently been approved by the European Parliament (The Artificial Intelligence Act).

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3.4. Enforcement

The relevant criteria when assessing whether an infringement of a registered design has occurred is if the infringing design produces a similar overall impression to an informed user. Actual copying is not necessary. However, with respect to unregistered Community designs, the contested use must be the results of copying the protected design. 

The holder of the design right can, in theory, enforce its right against use of the design in trademarks, registered designs, patents, domain names (if the design includes wording), trade names, pseudonyms or other distinctive signs or IP rights. 

A design right can be enforced against its unauthorised use in social media if the requirements for infringement are met.

The Swedish Design Act does not include any specific regulation on parodies. However, use of a protected design for personal purposes and without commercial gain is not considered to constitute an infringement of the design.

An alleged infringer generally relies on any of the following defences: (i) that the protected design does not meet the requirements of novelty or individual character; and/or (ii) that the infringing design does not produce a similar overall impression on an informed user. 

The Swedish Design Act does not include a specific repair clause but designs for parts intended for the repair of complex products are valid for a maximum of three five-year periods.

The right to damages for design infringement is time-barred if the action is not filed within five years from the date of the injury.

An action for design and copyright infringement and unfair competition can be brought in the same proceedings.

Luxury brands should note that the Swedish Intellectual Property Office does not conduct a substantive examination of the validity of designs (e.g. if the novelty requirement is met). Consequently, registered design protection may be a weaker form of IP protection from an enforcement perspective. The same applies for registered Community designs in the EU.

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4 . Right of privacy, publicity and personal endorsement

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4.1. Sources of law

Swedish law recognises the right of an individual to control the commercial use of his or her name and image. The principal source of law is the Act on Names and Pictures in Advertising (the ANP). The Penal Code also includes provisions which prohibit offensive photographing and protect against intrusion in privacy under certain circumstances. 

The privacy laws in Sweden have been strengthened by the enactment of the General Data Protection Regulation, which places greater compliance burdens and financial risks on all corporations that process personal data.

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4.2. Substantive law

Under the ANP, the name or picture of a living person cannot be used in marketing without the person’s consent. 

The law does not protect deceased individuals. Heirs of the deceased may, in very specific cases, rely on regulations concerning defamation/slander in the Penal Code. 

There is no specific law on assignment/licensing of the right to publicity. General principles of contract apply in respect to agreements under which an individual grants another party the right to use their name or picture in an advertisement. However, a person’s name may be protected as a trademark and, in that capacity, may be assigned or licensed. 

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4.3. Enforcement

Under the ANP, the right to protection can only be enforced against the commercial use of a person’s name and picture. There is no requirement that the name or picture has any commercial value.

A common defence by the infringer is that the use has been for non-commercial purposes. 

The risk associated with cooperations between luxury brands and celebrities and online influencers is that the brand or the celebrity/influencer becomes tainted by the other party’s values/wrongdoings. Contractual arrangements between the parties should include termination grounds addressing this and provide for appropriate remedies.

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5 . Product placement

Under Swedish law, product placement is generally permitted unless it occurs in certain types of programs such as news programmes, consumer programmes and programmes aimed at children under the age of 12, and does not concern certain goods such as alcoholic beverages, tobacco and prescription medication, etc. 

It is prohibited for the programme in which placement occurs to encourage purchases of the product or promote the product commercially in an undue way. Information about the product placement also needs to be provided.

There is no specific law on available remedies if one party fails to perform an agreement concerning product placement. General contractual principles apply. Damages and other remedies may be available, including filing an injunction to stop the communication.

Product placement can pose some challenges for luxury brands. It is important that the product is featured in content that aligns with the brand’s overall brand strategy. The growing frequency of digital content may mean that new formats for product placement need to be considered. Brand owners need to ensure that placement in these new formats is authorised and that contractual arrangements provide for placement to be conducted in accordance with the brand’s values.

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6 . Protection of corporate image and reputation

Legal entities do not enjoy any explicit right of publicity or privacy under Swedish law. A legal entity may receive some protection for their image under the trademark and copyright legislation and pursuant to the Marketing Practices Act. In addition, the Act on the Protection of Trade Secrets grants legal entities protection against misuse of trade secrets.

In Sweden, there is a growing emphasis on corporate social responsibility. Companies may use so called “greenwashing” to enhance their public image. Case law from Swedish courts mandates that claims of environmental friendliness in marketing must be moderate, well-founded and substantiated by facts. 

Sweden has various laws aimed at promoting diversity and preventing discrimination based on, e.g., gender and ethnicity. There is also legislation in place concerning discrimination against disabled people as well as laws that ensure accessibility to retail facilities for disabled individuals.

A company is generally allowed to include contractual clauses in agreements which aim to protect the company’s image and reputation. Such clauses must be consistent with competition law. In Coty Germany GmbH v. Parfümerie Akzente GmbH (Case C-230/16), the CJEU concluded that luxury brand owners may be entitled to implement selective distribution systems, i.e. sale systems where they control the distribution chain, to preserve the luxury image of their respective goods. However, the selection of resellers must be based on “objective criteria of a qualitative nature that are laid down uniformly for all potential resellers and applied in a non-discriminatory fashion” and do “not go beyond what is necessary”. 

Contractual clauses that include a prohibition on selling the products to re-sellers whose image is below a certain defined standard could be permitted if they meet the criteria for selective distribution systems. 

Clauses that include a prohibition on selling below a certain price (fixed or minimum resale price) are generally prohibited under EU competition law. 

A prohibition on buying non-original — but otherwise legitimate — spare parts and components can constitute an exclusive purchase obligation or a non-competition clause. Such clauses are generally only permitted if they do not distort competition or they fall under the EU block exemption regulation. 

Contractual clauses that award one party liquidated damages in the event of breach of contract are allowed under Swedish law but may be set aside or adjusted by a court if they are deemed unreasonable. 

The second-hand market may be a concern for luxury brands. Third parties can sell used products after having conducted extensive repair and reconditioning services on the products. This may result in poor quality goods circulating on the market (with the luxury brand attached), which in the end could affect the impression of exclusivity that luxury brands wish to convey. Once IP-protected goods have been put on the market lawfully within the EU, the principle of “exhaustion of rights” generally applies, meaning that the rightsholder can no longer control the use of the product. There may be exceptions that apply in specific cases, for instance under the trademark legislation if the product has been changed after the first sale. The proprietor may, under certain circumstances, invoke “legitimate reasons” as a legal basis to oppose further commercialisation. 

EXPERT ANALYSIS

Chapters

Australia

Belinda Breakspear
Harriet Young

China

Lina Li
Yunze Lian

Germany

Dr Wiebke Baars

India

Dhruv Anand
Nimrat Singh
Sampurnaa Sanyal
Udita Patro
Pravin Anand

Italy

Fabrizio Jacobacci

Japan

Masaki Mikami

Lebanon

Julien Khoury
Nisrine El Haddad
Patricia Seaiby
Rany Sader

Mexico

Ricardo R. Díaz Cisneros

Netherlands

Herwin Roerdink
Tjeerd Overdijk

South Korea

Clare Ryeojin Park
Dae Hyun Seo
Won Joong Kim

Spain

Eleonora Carrillo
Ignacio Martínez
Rafael Linage

Thailand

Adele Marchal
Chanapa Thussanasumrit
Munif Chaipanya
Orranat Suvarnasuddhi
Pawat Varapirom

Ukraine

Dmytro Stefanovych
Ganna Prokhorova
Ilona Boliubash

United Kingdom

Simon Miles

United States

Alan Behr
Tod Melgar

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