The Market Court and an Interim Injunction (Alleged Utility Model Registration in Bad Faith)

Background

In November 2012, a company B (B) filed a utility model application for an invention 'Attachment arrangement'. The invention consisted of independent claim 1 and dependent claims 2-5. The Finnish Patent and Registration Office (PRH) registered the utility model (no. 9968) on 28 January 2013. 

Utility Model Registration no. 9968.

In 2014, a company A (A) lodged an invalidity claim against the registered utility model. The A provided prior art documents D1-D8. In 2015, the A added a prior art document D9. Basically the A wanted to prove that it has been selling an apparatus that is identical with the utility model and that these sales have occurred before the B filed the utility model application in 2012. 

In 2015, PRH confirmed in its decision that the documents D2-D4 and D9 cover the apparatus described in the claim 1 of the registered utility model no. 9968. However, PRH decided to reject the invalidation claim because the documents D2-D4 and D9 are based on a communication between two companies and an internal activity in those companies. This kind of communication or activity is not considered to be a material that has become available to the public. 

The documents D2-D4 provided proof of how the A has ordered a company C (C)  to manufacture and deliver a mold of an apparatus that is, allegedly, similar to the apparatus described in the claim 1 of the registered utility model. In the document D9, the A provided evidence of how it has started to manufacture the apparatus based on a mold ordered from the C and provided information on the sales of that apparatus. All this had occurred before the B filed the utility model application in 2012. 

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In 2016, the A brought an action for an interim injunction against the B in the Market Court. The A requested the court to order that a bailiff, or an expert on behalf of the bailiff, will carry out the following measures in the business premises of the B:

1. Investigate and copy or otherwise preserve:

a) the received and sent emails, including attachments, inter alia, (i) between the B and the C.

b) electronic documents and other files regarding the registered utility model no. 9968 or regarding other apparatus similar to the utility model.

2. Seize the physical papers and drawings regarding the registered utility model no. 9968 or regarding other apparatus similar to the utility model.

3. Seize all the prototypes, if the B has such, that the C has manufactured for the A.

Furthermore, the A requested the court to order the injunction without giving the B opportunity to be heard.

The Market Court issued its decision 325/16 on 3 June 2016.

The Market Court

The court first clarified the legal basis of the interim injunction application.

According to section 1 paragraph 2 of the Act on Securing Evidence in Civil Matters concerning Industrial Rights and Copyrights (344/2000), the Act is applied to a situation in which, inter alia, an entrepreneur has unjustifiably used or revealed a business secret, a technical model or technical instructions.

According to section 2 of the Act, the court can give a seizure order concerning any material that can have a significance in the case in question. The opposing party shall not suffer undue inconvenience in comparison with the benefit to be secured (comparison of interest / unreasonable inconvenience). According to section 3 of the Act, the rightholder needs to demonstrate that it is probable that he or she has a right that is enforceable against the opposing party, and the right is being infringed or that such infringement is imminent (claim requirement). Furthermore, there is a danger that the opposing party, or the one who has the material, conceals, destroys or hands over the evidence or in some other manner endangers the preservation of the evidence (danger requirement).

According to Government Bill 119/1999 of the Act, the applicant has to specify the object of the injunction. One has to know what to look for during the enforcement of the injunction. Furthermore, the specification is needed so that the court can assess whether the object has a significance as an evidence. The applicant has to specify the object of the injunction so precisely that the bailiff can carry out the enforcement without further consideration.

According to section 4 of the Act, the court can, on request, order the interim injunction without giving the defendant opportunity to be heard, if the purpose of the injunction is otherwise endangered.

According to section 5 paragraph 1 of the Act, a bailiff can use, if necessary, an unchallengeable expert. The applicant of the injunction, or his/her representative, can act as an expert if it is likely that he/she will not unjustifiably obtain any other business or trade secrets. 

1. Claim requirement

The A provided evidence that the figure eight of the registered utility model no. 9968 is identical with the drawings that the A sent to the C in 2010. The court stated that the A has an enforceable right against the B and the claim requirement is therefore fulfilled. The court stated also that at least part of the material, targeted by the injunction, has a significance in the case.

The A argued that the B has received material from the C and used it in the utility model application. Therefore, the email correspondence between the B and the C may have a significance as an evidence. The court agreed and stated that the relevant time period is between 2010 and 28 November 2012.

Otherwise the court rejected the requests no. 1-3 because it could not evaluate whether the material targeted in those requests would have a significance regarding the unjustifiable use or reveal of a technical model, i.e. the requests were not specific enough. 

Utility Model Registration no. 9968, Fig. 8.

2. Danger requirement

The court referred to earlier Supreme Court rulings 1994:132 and 1994:133 where the Supreme Court has ruled that the danger requirement is fulfilled if the danger is not very improbable based on the circumstances in the case. 

According to the A, it is likely that the B has some of the targeted material described in the interim injunction application. Taking into account the alleged bad faith behavior described above, there is a danger that the B conceals, destroys or hands over the evidence or in some other manner endangers the preservation of the evidence before the main proceedings. The court agreed and stated that the danger requirement is sufficiently fulfilled.

3. Comparison of interest / unreasonable inconvenience

The court considered that, as mentioned above, it is justifiable to order the interim injunction only regarding the request 1 (a)(i), i.e. the email correspondence, including attachments, between the B and the C between 2010 and 28 November 2012. Furthermore, the material is ordered to be left in the bailiff's possession. Since the injunction is ordered in a restrictive form like this, the opposing party B is not going to suffer undue inconvenience in comparison with the benefit to be secured. The comparison of interest / unreasonable inconvenience requirement is thus fulfilled.

The court also considered that there is a reason to order the interim injunction without giving the defendant opportunity to be heard.

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Therefore, the Market Court ordered a bailiff to carry out the following measure in the business premises of the B:

- Investigate and copy or otherwise preserve the received and sent emails, including attachments, between the B and the C between 2010 and 28 November 2012.

The bailiff can use, if it is necessary, an unchallengeable expert who is obliged to follow the rules of confidentiality and prohibition of exploitation.

Enforcement and security

A prerequisite for the entry into force of the interim injunction is that the applicant applies for enforcement of a precautionary measure as provided in chapter 8 of the Enforcement Code (705/2007).

According to chapter 8 section 2 paragraph 1 of the Enforcement Code, enforcement of a precautionary measure requires that the applicant lodges with the bailiff security for loss that the respondent may incur as a result of the precautionary measure.

The A has to apply the enforcement not later than 13 June 2016. Furthermore, the A has to deliver a document covering the description and results of the enforcement not later than 20 June 2016.

The Market Court Orders Defendant to Pay in a BitTorrent File-sharing Case

The Market Court issued an important online piracy decision 419/16 on 4 July 2016. According to the court, the defendant had shared a movie and ten episodes of a tv-show by using BitTorrent file-sharing application. The court ordered the defendant to pay 600 euros in compensation (100 euros per shared movie and 50 euros per shared tv-show episode). In addition to that, the court ordered the defendant to pay the plaintiffs' legal fees, in total 31 762,16 euros plus legal interest. The defendant's own legal fees were in total 21 714,32 euros.

I wrote about the background of this case earlier in this blog (here).

A law firm, representing the rightsholders of the movie 'A Walk Among the Tombstones' and the tv-show 'Black Sails', sent a settlement letter to a person X on 20 April 2015. In that settlement letter, the rightsholders held the X liable for sharing the movie and ten episodes of the tv-show between 3 January and 29 March 2015. According to the rightsholders, the X was using BitTorrent file-sharing application while committing these infringing acts. The IP address of the internet subscriber (the X) was logged by a technology company that had monitored the BitTorrent traffic. The law firm then, acting on behalf of the rightsholders, asked the Market Court to order the relevant internet service provider (ISP) to give up the personal details of the internet subscriber (the X). In the settlement letter, the law firm asked the X to pay a settlement sum of 2 100 euros or otherwise there is a risk that the X will get sued by the rightsholders and the compensation demands will be higher.

The same law firm has been sending settlement letters for more than a year and approximately thousands of Finnish internet subscribers have received a settlement letter from the firm.

Unwelcome mail from a law firm.
Image courtesy of OpenClipartVectors at Pixabay.com

In October 2015, the rightsholders took three of these settlement letter cases to the Market Court as civil disputes after the letter receiver did not pay the settlement offer. Two of the cases were settled out of the court with a confidentiality clause. The case regarding the X proceeded all the way to the main hearing, which was held in the beginning of May 2016. 

In the case regarding the X (the defendant), the rightsholders (the plaintiffs) requested the court to:

1. order the defendant to pay compensation of 7 500 euros plus legal interest for making ten episodes of the tv-show available to the public by using BitTorrent file-sharing application.

2. order the defendant to pay compensation of 1 000 euros plus legal interest for making the movie available to the public by using BitTorrent file-sharing application.

3. order the defendant to pay the plaintiff's legal fees, in total 31 762,16 euros plus legal interest.

It is important to mention that in this case the plaintiffs are not seeking compensation for the reproduction of the works. It was agreed by both parties that the compensation is going to be determined only in the context of making the works available to the public.

The Market Court

The court first clarified the legal basis of the dispute and gave a thorough explanation of the BitTorrent protocol and how it works. 

According to section 2 paragraph 1 of the Copyright Act (404/1961), copyright shall provide the exclusive right to control a work by reproducing it and by making it available to the public, in the original form or in an altered form, in translation or in adaptation, in another literary or artistic form, or by any other technique.

According to section 2 paragraph 3 of the Act, a work is made available to the public when, inter alia, it is communicated to the public by wire or wireless means, including communication in a way which enables members of the public to access the work from a place and at a time individually chosen by them.

The defendant argued that the plaintiffs have not provided enough evidence to prove that the IP address mentioned by the plaintiffs was used by the defendant at the time of the infringing acts. And even if the IP address was used by the defendant, the defendant denied that he has downloaded or shared any of the works. According to the defendant, he can not be held liable for any infringing acts that were carried out by someone else who was using the defendant's wireless internet connection.

Therefore, the court had to assess first whether the plaintiffs have provided enough evidence that the defendant was the user of the IP address at the time of the infringing acts. If this is the case, then the court has to assess whether there is enough evidence to prove that the defendant has personally downloaded and, most importantly, communicated the works to the public.

Was the defendant the user of the IP address at the time of the infringing acts?

The plaintiffs referred to the earlier Market Court decisions 93/15, issued on 12 February 2015, and 170/15, issued on 10 March 2015. In those decisions, the court has, pursuant to the section 60 a of the Copyright Act, ordered the relevant ISP to give up the personal details of the internet subscriber who used the IP address 84.250.xx.xxx at the time of the infringing acts between 3 January 2015 and 5 February 2015. The defendant was the user of that IP address.

The defendant stated that, according to the different articles in the newspapers and on the internet, different ISPs are known to have done several mistakes when they have identified the user of an IP address. 

The plaintiffs provided evidence that they had requested the ISP to check the accuracy of the details. According to the ISP, two of its workers have checked the details again and they have confirmed that it was the defendant who was the user of the IP address at the time of the infringing acts.

The court stated that, according to the evidence shown in the case, the defendant was the user of the IP address at the time of the infringing acts.

Technical monitoring of the IP address and the time period of the infringing acts

The court provided a thorough explanation on how the IP address of the defendant was logged by the technology company and how the BitTorrent traffic was monitored at the time of the infringing acts. The defendant has not contested the log information.

Interestingly enough, the plaintiffs were able to convince the court that the IP address of the defendant was used to download and share the infringed works between 3 January 2015 and 29 March 2015, even though the last court ordered identification done by the ISP was on 5 February 2015. The reason why the court was convinced is based on the following facts:

- The technology company had continued to monitor the same IP address after the last court ordered identification done by the ISP on 5 February. According to the technology company, the infringing acts continued until 29 March 2015.

- According to witness B, the file-sharing that occurred between 3 January and 29 March 2015 was carried out from the same computer, because the IP address and the used BitTorrent client remained the same during that period of time. 

- According to the plaintiffs, the user of the IP address had used a BitTorrent client named qBittorrent, and its version 3.1.0, between 3 January and 29 March 2015. The plaintiffs argued that this client is rather rare. According to statistics of the technology company, the qBittorrent client covers only 3,2 percent of all the monitored BitTorrent clients in April 2016. 

- The BitTorrent clients have a userhash-code that is created randomly and it changes whenever the BitTorrent client is launched. According to witness B, the userhash-code changed only four times during the several months.

- The user of the IP address downloaded the episodes in their chronological order during the time period between 3 January and 29 March 2015. 

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Therefore, the court stated that the IP address has belonged to the same internet subscriber between 3 January 2015 and 29 March 2015 and the same computer has been used and the same person has done the infringing acts during that period of time [I understand that the same computer has probably been used, but in my opinion it is not clear that, according to the evidence, the same person has been using the computer...]. 

Has the defendant personally communicated the works to the public?

The court had to assess now whether the defendant has personally, according to the evidence provided by the plaintiffs, communicated the works to the public. 

The plaintiffs showed messages posted on two separate online discussion boards on 24 April 2015. The first online discussion board is 'Muropaketti' and the second is 'Ylilauta'. According to the plaintiffs, the writer of those messages has to be the defendant because the messages included an image of a settlement letter that had many identical details as the settlement letter that the defendant had received. 

The message in Muropaketti, written by a registered username, included an image of a settlement letter that had the same number of pages, the same infringed works, the same timestamps regarding the infringing acts and the same layout of the text as the settlement letter that the defendant had received. 

The defendant did not deny that he was the writer of the message in Muropaketti. In the message, the defendant wrote that he had received a settlement letter and was pondering different options. In that message, the defendant did not, in my opinion, clearly confess or deny that he had downloaded or shared the infringing material. Here is a FinnIPR translation of the message:

"I received a suspicious letter from a law firm. I was curious and immediately opened the letter because I think I have heard the name of the firm before, I got a bad vibe from the name. I should have at least waited until the evening. They claimed in the letter that I had downloaded some tv-show and demanded two thousand euros within two weeks or otherwise there will be some sort of follow-up. Rationally thinking I have two options. 

1. To submit and pay. With my salary it would be annoying to pay the two thousand euros. This would encourage the law firm to continue doing this. It would be annoying to give up so easily.

2. No to pay and ignore the extortion. Should I wait for the preliminary investigation - As a defense, I have an open wireless network; Should I wait that the police will come and take my computers - Are they going to take all the laptops, desktop computers and iPads; To wait what the prosecutor says - Hopefully the preliminary investigation is not going to take long, especially when I have crypted material; To wait how it goes in the court - Can I get a free lawyer just like in the USA; I think morally it would better to choose this option no.2, even though the fight would take long. The minimum requirement is a realistic chance to win the case.

Can you tell me how the second option goes and how much I can lose in the worst-case scenario? What would you do?"

In that message, the defendant has, in the plaintiffs' opinion, confessed the infringing acts.

On the same day, 24 April 2015, someone has written in the other discussion board, Ylilauta, that "It did not work to limit the seed [the sharing] to 0 kB/s...". The message included an image of a settlement letter that had the same reference number as the settlement letter that the defendant had received. According to the plaintiffs, the writer of that message has to have been the defendant. The court agreed on this issue. 

The court stated that, in the messages described above, the defendant has not expressed that the settlement letter was sent to a wrong person or that he has not communicated the mentioned works to the public. The defendant has only pondered what he should do and he has mentioned the open wireless network defense. The court stated that the messages in Muropaketti and Ylilauta are suggesting that the defendant has communicated the mentioned works to the public.

The defendant stated that he had purchased a wireless router on 17 March 2014 and provided a receipt as an evidence. Incredibly enough, the plaintiffs provided evidence that the technology company had gathered log information of the defendant's IP address already since 17 March 2014 and this has continued until 14 May 2015. The monitoring report shows BitTorrent traffic (works regarding other rightsholders) from this IP address during that time period. The accuracy of the log information was not contested by the defendant. The use of BitTorrent file-sharing application has started on 17 March 2014 and continued on almost a daily basis until 22 April 2015. After that date, the 22 April 2015, there was only one log information regarding the use of BitTorrent file-sharing application and this happened on 14 May 2015. This means that the use of BitTorrent file-sharing application has stopped almost completely on 22 April 2015, only two days after the settlement letter was sent to the defendant. This is also suggesting that the defendant has communicated the mentioned works to the public. The court agreed on this issue.

After receiving the settlement letter, the defendant had some correspondence with the law firm. In that correspondence, on 4 May 2015, the defendant provided evidence that he has had an open wireless connection and that he has limited the use of the connection to only legal purposes. The defendant provided images of the settings of the wireless router. The evidence did not provide, however, any information about when the defendant has adjusted the settings of the wireless router. 

The defendant also used his wireless router's traffic logs as an evidence. According to that log information, the open wireless network has had many users. However, the defendant stated that this traffic log information does not describe the time period of the allegedly infringing acts. 

The defendant also referred to an expert report. According to this report, the neighbors of the defendant could have accessed the open wireless network and even someone from the yard could have accessed the network.

Interestingly enough, the plaintiffs hired a private investigator to find out whether the defendant's wireless connection was open as he had claimed. According to the investigator, the wireless connection was password-protected. However, the private investigator carried out his research on 3 December, eight months after the last infringing act logged by the technology company. The court did not place any significance on this evidence.

The court stated that the defendant has provided, per se, a completely plausible description of events. According to that description, an unidentified person, or many of them, could have accessed the open wireless network belonging to the defendant and has/have then used it for downloading and sharing copyrighted material. However, this description of events is only hypothetical, albeit technically plausible. On the other hand, the plaintiffs have provided technical evidence based on the monitored traffic and log information mentioned above. The plaintiffs have provided also other evidence, in the form of the messages in the online discussion boards, that suggests that the defendant is the infringer. According to chapter 17 section 2 paragraph 2 of the Code of Judicial Procedure (4/1734, as amended in 2016), a circumstance may be taken as grounds for the judgment only on the condition that a party has presented credible evidence regarding it. The court concluded that the plaintiffs have presented credible evidence that the defendant has communicated the mentioned works to the public.

The amount of reasonable compensation

Now when the court was convinced that the defendant had done the infringing acts, it was time to determine the reasonable amount of compensation under section 57 of the Copyright Act. 

It is worth mentioning again that in this case the plaintiffs are not seeking compensation for the reproduction of the works. It was agreed by both parties that the compensation is going to be determined only in the context of making the works available to the public.

The court stated that the purpose of the reasonable compensation is to restore an injured party to his former position. The court stated that willfulness or negligence is not required. Furthermore, it is not required that the infringer has financially profited from the infringement.

The court also referred to a Finnish Supreme Court decision 2010:47 where the Supreme Court stated that the purpose of the reasonable compensation is also to effectively prevent copyright infringements. The Supreme Court has stated also, in that same decision, that the basis of the reasonable compensation should be the price of the work in a distribution channel that is the most similar to the infringing conduct. If no evidence is provided of those prices, it is appropriate to determine the reasonable compensation based on an overall consideration of the case. The overall consideration has to take into account the characteristics of the case, such as the purpose of making profit.

The plaintiffs and the defendant both provided their versions of the basis of reasonable compensation. 

According to the plaintiffs, the basis of reasonable compensation in this case is a license fee that a distributor has to pay in order to distribute the work in a restricted geographical area. These license fees are usually based on the production costs of a tv-show or a movie. The plaintiffs suggested that a reasonable amount is 1 000 euros for the movie and 7 500 euros for the ten episodes of the tv-show, 750 euros per episode. The court rejected the suggestion and stated that the conduct of the infringer cannot be compared to this.

The defendant argued that the mentioned tv-show is available on HBO Nordic, the video-on-demand service. The monthly subscription cost of that service is 9,95 euros. The defendant argued that a single episode would therefore cost 0,995 euros and ten episodes 9,95 euros. The price of the movie in an online store is 9,95 euros. The court rejected these compensation suggestions. According to the court, the subscriber of the video-on-demand service can watch the work on his/her own device, but it is not possible or allowed to copy the work or distribute the work forward. The same restrictions apply also to a copyright protected DVD.

Therefore, the court stated that the reasonable compensation has to be determined based on an overall consideration of the case. The compensation has to effectively prevent copyright infringements, but at the same time it has to be reasonable. The overall consideration has to take into account the characteristics of the case, such as the purpose of making profit.

The court considered that the following facts are increasing the amount of compensation:

- The defendant has been communicating the works to the public immediately after the works have been published. This has decreased the interest of the public to use legal distribution channels.

- The defendant has participated in an uncontrollable distribution of the works on the internet. The works have been unprotected and in high-definition. 

The following facts are, according to the court, decreasing the amount of compensation:

- The defendant participated in the distribution with the other users. The defendant was a single user in a swarm and therefore he could not have an influence on how many people downloaded the works. 

- The defendant has not made any profit by communicating the works to the public. 

According to chapter 17 section 2 paragraph 3 of the Code of Judicial Procedure, if credible evidence is not available regarding the amount of a claim under private law or such evidence is obtainable only with difficulty or, in view of the nature of the case, with unreasonable cost or difficulty, the court shall assess the amount. 

The court stated that, taking into account the assessment above, the reasonable amount of compensation is 100 euros for the movie and 50 euros per shared tv-show episode.

The court ordered the defendant to pay 600 euros in compensation plus legal interest.

In addition to that, the court ordered the defendant to pay the plaintiff's legal fees, in total 31 762,16 euros plus legal interest. The defendant's own legal fees were in total 21 714,32 euros plus legal interest.

Further comments

It remains to be seen what effects this decision will have. The sending of the settlement letters will probably continue. In my opinion, the most important part of the case is the assessment whether the defendant has personally done the infringing acts. I wonder if the outcome would have been different without the messages that the defendant had, according to the court, posted online. As I mentioned in my earlier post, the rightsholders have sued more alleged file-sharers to the Market Court during the year 2016. One would think that they have carefully picked the defendants based on the strength of their evidence i.e. how they can prove that the internet subscriber was in fact the infringer. 

It was important that the court defined the amount of reasonable compensation. It is hard to say whether this will affect the amount of the sums demanded in the settlement letters. The letter receivers and alleged infringers have now the possibility to refer, when negotiating with the rightsholders, to the compensation sums ruled by the court. However, one has to take into account that the settlement sums include some other costs too, not only the compensation to the rightsholders. The identification of the internet subscriber (court ordering the ISP to give up details) can be costly for the rightsholders.

The rightsholders have an important leverage in the form of the legal fees. In this case the amount is more than 30 000 euros plus the defendant's own costs. Even if the compensation is lowered by the court, the legal fees are big enough to make the alleged infringers think twice whether a fight against the rightsholders is worth it. One option is to only deny the requested amount of compensation, if it is bigger than it would be according to the compensation guideline ruled in this decision. If the case still goes to the court, the legal fees should be far less than in this case because the identity of the infringer is not contested.

Finally, the defendant of this case may still wish to pursue an appeal to the Supreme Court.

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Another topic of discussion are the requirements to order the ISP to give up the personal details of the internet subscriber. According to section 60 a of the Copyright Act, an author or his representative shall be entitled, by the order of the court of justice, to obtain contact information from the maintainer of a transmitter, server or a similar device or other service provider acting as an intermediary about a tele-subscriber who, unauthorised by the author, makes material protected by copyright available to the public to a significant extent in terms of the protection of the author's rights. In this case, the court had earlier ordered the relevant ISP to give up the personal details of the X. It is not perfectly clear, in my opinion, whether the sharing of ten episodes of a tv-show and a movie can meet the threshold of "makes material protected by copyright available to the public to a significant extent". But as said, this discussion is probably outside the scope of this post.

The Market Court and Three Interim Injunction Decisions (Rim Designs and Center Caps)

The Market Court issued three interim injunction decisions (358/16, 359/16 and 360/16) on 15 June. In all these decisions, Volks­wa­gen AG (Volkswagen) is the plaintiff.

According to Volkswagen, three Finnish companies were marketing and selling without permission rims that were identical or similar with registered designs belonging to Volkswagen. According to Volkswagen, two of the three companies were also marketing and selling without permission center caps (for rims) that were practically identical with a registered European Union trademark belonging to Volkswagen.

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In an application against Rengas Turku Oy (Rengas Turku), Volkswagen requested the court to:

1. Prohibit the defendant from using, offering, marketing, selling, importing, exporting or storing the following rim designs:

- RE SCI­ROC­CO GI­NOST­RA W456
- RE SCI­ROC­CO GI­NOST­RA W456 BLACK
- RE W463 CROSS
- IMA­GE TO­RI­NO

According to Volkswagen, these rim designs are identical or similar with the registered community designs 000135199-0042, 000603857-0001 and the registered international design DM/077 557.

Volkswagen also requested the court to prohibit Rengas Turku from using, offering, marketing, selling, importing, exporting or storing center caps that were practically identical with the registered European Union trademark 000703983. Volkswagen specified that the infringing center caps are included in the rim designs RE W463 CROSS and IMA­GE TO­RI­NO.

Volkswagen also requested the court to impose a conditional fine of 200 000 euros to reinforce the orders.

2. Seize all the infringing rim designs.

3. Order that all accounting documents (invoices, sales documents and receipts) regarding the infringing rim designs are copied permanently by the bailiff and handed over to Volkswagen.

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In an application against vannetukku.fi Oy (vannetukku.fi), Volkswagen pretty much repeated the requests mentioned above. This time the defendant was marketing and selling rim designs named as 'Fit for VW Re­per­bahn' and those designs were, according to Volkswagen, infringing the registered international design WO DM/079 881-1. In this case there were no requests regarding center caps.

In an application against OEMPLUS Oy (OEMPLUS), Volkswagen repeated again the requests mentioned in the first application with the exception that this time there was a more comprehensive list regarding rim designs marketed and sold by the defendant:

- 16992 volks­wa­gen-ria­ce-anth­ra­ci­te-po­lis­hed
- 17002 volks­wa­gen-gi­nost­ra-sil­ver
- 17009 volks­wa­gen-ros­tock-sil­ver
- 17025 volks­wa­gen-linz-sil­ver-po­lis­hed-lip
- 17026 volks­wa­gen-dha­ka-sil­ver-po­lis­hed and 17027 volks­wa­gen-dha­ka-sil­ver
- 17037 volks­wa­gen-cip­rus-anth­ra­ci­te-po­lis­hed and 17042 volks­wa­gen-cip­rus-glos­sy-black-lip-po­lis­hed
- 17041 volks­wa­gen-cip­rus-sil­ver-po­lis­hed
- 17043 volks­wa­gen-spar­ta-sil­ver-po­lis­hed
- 17048 volks­wa­gen-an­ka­ra-sil­ver
- 18371 volks­wa­gen-r-ni­si­da ja 18372 volks­wa­gen-r-ni­si­da-black
- 18502 volks­wa­gen-sa­ha­ra-matt-gun­me­tal, 18503 volks­wa­gen-sa­ha­ra-sil­ver-po­lis­hed-lip and 18504 volks­wa­gen-sa­ha­ra-sil­ver
- 18539 volks­wa­gen-cross-anth­ra­ci­te-po­lis­hed
- 18540 volks­wa­gen-cross-hy­per-sil­ver.

According to Volkswagen, those rim designs are identical or similar with the registered community designs 000135199-0001, 000135199-0007, 000135199-0025, 000135199-0036, 000135199-0042, 000603857-0001 000848361-0001 and the registered international designs DM/077 557 and DM/079 881.

Furthermore, OEMPLUS is marketing and selling center caps that are, according to Volkswagen, infringing the registered European Union trademark 000703983.

Volkswagen also requested the court to seize the infringing center caps.

Registered Community Design 000135199-0042.

The Market Court and the Volkswagen's requests no. 1-2

The Market Court stated that the requests no. 1-2 in the Volkswagen's applications are based on chapter 7 section 3 of the Code of Judicial Procedure (4/1734). According to that rule, there are three requirements that must be fulfilled before an interim injunction can be granted: claim requirement, danger requirement and comparison of interest / unreasonable inconvenience.

1) Claim requirement; the right holder needs to demonstrate that it is probable that he or she has a right that is enforceable against the opposing party.

The court referred to earlier Supreme Court rulings 1994:132, 1994:133, 1998:143, 2000:94 and 2003:118. In the rulings 1998:143, 2000:94 and 2003:118, the Supreme Court has stated that the threshold for granting an interim injunction is considerably higher in cases in which the interim injunction would lead to a situation where the applicant achieves in advance the same outcome, which is the subject of the claims in the main proceedings (etukäteisnautinta in Finnish).

In the application against Rengas Turku, Volkswagen claimed that Rengas Turku is marketing and selling, in its own online store, without permission rims that are identical or similar with the registered designs belonging to Volkswagen. Volkswagen also claimed that some of the rims have a center cap that is practically identical with the registered European Union trademark belonging to Volkswagen. Rengas Turku did not deny these claims, it only stated that it has removed the allegedly infringing rims and center caps from sale. The court ruled that, based on the evidence provided in the case and the fact that Rengas Turku has not denied the claims, Volkswagen has an enforceable right against Rengas Turku.

In the application against vannetukku.fi, Volkswagen claimed that vannetukku.fi is marketing and selling, in its own online store, without permission rims that are identical or similar with the registered international design DM/079 881-1 belonging to Volkswagen, applied on 19 December 2012. Vannetukku.fi denied the claims because the rim named 'Fit for VW Re­per­bahn' is based on a registered community design 002649970-0025 (applied 10 March 2015) belonging to Paalupaikka Oy, a subsidiary company of vannetukku.fi. According to vannetukku.fi, the presumption of validity rule is giving the company the right to sell and market the design rim as long as the said design right is valid. The rule is expressed in Article 85 of the Community Design Regulation No 6/2002. Furthermore, vannetukku.fi denied the claims because it considers that the design right belonging to Volkswagen is not new and it covers a spare part of a car and those kind of spare parts can not obtain any community design right.

The court had to assess whether it is probable that the sold and marketed rims are infringing the registered design right belonging to Volkswagen. The court stated that vannetukku.fi did not deny that the marketed and sold rims are identical or similar with the registered design right belonging to Volkswagen. According to the court, the fact that the subsidiary company of vannetukku.fi has the registered community design does not, per se, have a significance. When a community design is applied, there is a minimal official examination of an application, and no official searches, for example regarding novelty, are carried out as provided in Article 47 of the Regulation. Therefore, it is possible that an applied community design will be registered even though it is identical with an earlier registered community design. 

The court also stated that the presumption of validity provided in the Article 85 is not protecting the vannetukku.fi in this case. The presumption of validity is only protecting the allegedly infringed design. The court stated that in this case the presumption of validity actually protects the registered international design DM/079 881-1 belonging to Volkswagen, and that this design shall be treated as valid, despite the claims regarding a lack of novelty and the rim not being able to obtain any community design right. Even if this was not the case, vannetukku.fi has not provided any evidence that the registered international design DM/079 881-1 lacks novelty. Therefore, the court stated that Volkswagen has an enforceable right against vannetukku.fi.

In the application against OEMPLUS, Volkswagen claimed that OEMPLUS is marketing and selling, in its own online store, without permission rims that are identical or similar with the registered community designs 000135199-0001, 000135199-0007, 000135199-0025, 000135199-0036, 000135199-0042, 000603857-0001, 000848361-0001 and registered international designs DM/077 557 ja DM/079 881 belonging to Volkswagen. Volkswagen also claimed that some of the rims have a center cap that is practically identical with the registered European Union trademark belonging to Volkswagen. OEMPLUS did not deny these claims, it only stated that it has removed the allegedly infringing rims and center caps from sale. OEMPLUS also stated that this was an unintended infringement that was interfered with immediately when the company noticed it. The court ruled that, based on the evidence provided in the case and the fact that OEMPLUS has not denied the claims, Volkswagen has an enforceable right against Rengas Turku.

2) Danger requirement; there is a danger that the opposing party by deed, action or negligence or in some other manner hinders or undermines the realisation of the right of the applicant or decreases essentially its value or significance,

The court referred to earlier Supreme Court rulings 1994:132 and 1994:133 where the Supreme Court has ruled that the danger requirement is fulfilled if the danger is not very improbable based on the circumstances in the case.

The defendant Rengas Turku has marketed and sold allegedly infringing rims and some of the rims have allegedly infringing center caps. The company stated that it has removed the products from sale, but admitted that it still has some in its storage. Therefore, the court stated that the danger requirement is sufficiently fulfilled.

The defendant vannetukku.fi has marketed and sold allegedly infringing rims. Volkswagen provided evidence that it has purchased four allegedly infringing rims named 'Fit for VW Re­per­bahn' from the online store of vannetukku.fi on 16 February 2016. Therefore, the court stated that the danger requirement is sufficiently fulfilled.

The defendant OEMPLUS has marketed and sold allegedly infringing rims and some of the rims have allegedly infringing center caps. Volkswagen provided evidence that it has purchased four allegedly infringing rims named 'R" Ni­si­da 19' from the online store of OEMPLUS on 16 February 2016. OEMPLUS stated that it has removed the products from sale. The company also stated that it does not have any rims or center caps anymore in its storage. Nevertheless, the court stated that the danger requirement is sufficiently fulfilled.

3) Comparison of interest / unreasonable inconvenience; the opposing party does not suffer undue inconvenience in comparison with the benefit to be secured.

Volkswagen stated that the interim injunction can not cause any unreasonable financial inconvenience to Rengas Turku because the allegedly infringing rims are only a small part of all the rims provided by Rengas Turku in its online store. According to Volkswagen, dismissal of the application (for an interim injunction) would cause sales decrease and possible detriment to its brand. According to Rengas Turku, the interim injunction is not necessary because it has removed the products from sale. The court ruled that, based on the evidence provided in the case and the rule that the applicant who has unnecessarily resorted to a precautionary measure is liable to compensate the opposing party for the damage caused by the precautionary measure and its enforcement, and to cover the expenses incurred, Rengas Turku does not suffer undue inconvenience. The liability to compensate the damage and cover the expenses is expressed in chapter 7 section 3 of the Code of Judicial Procedure.

In the application against van­ne­tuk­ku.fi, Volkswagen expressed the same arguments mentioned above regarding the comparison of interest / unreasonable inconvenience. Vannetukku.fi argued that it has a very big storage that consists mainly of tires. According to the company, it has only two allegedly infringing rims left in its storage. The court ruled the same way as mentioned above regarding the application against Rengas Turku.

In the application against OEMPLUS, Volkswagen expressed the same arguments mentioned above regarding the comparison of interest / unreasonable inconvenience. Vannetukku.fi only stated that it has more than 16 000 products for sale in its online store. The court ruled the same way as mentioned above regarding the applications against Rengas Turku and vannetukku.fi.

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In all the cases, the court stated that it is possible to order an interim injunction regarding the request no. 1. The court also stated that the request no. 2 (seizure) is not necessary because the court will impose a conditional fine to reinforce the orders regarding the request no. 1. Therefore, the request no. 2 was dismissed. The conditional fine is 30 000 euros regarding Rengas Turku and OEMPLUS and 50 000 euros regarding vannetukku.fi.

The Market Court and the Volkswagen's request no. 3

The Volkswagen's request no. 3 (copying and handing over the accounting documents) is based on sections 2 and 3 of the Act on Securing Evidence in Civil Matters concerning Industrial Rights and Copyrights (344/2000). According to the section 2, the court can give a seizure order concerning any material that can have a significance in the case in question. The opposing party shall not suffer undue inconvenience in comparison with the benefit to be secured (comparison of interest / unreasonable inconvenience). According to the section 3, the right holder needs to demonstrate that it is probable that he or she has a right that is enforceable against the opposing party, and the right is being infringed or that such infringement is imminent (claim requirement). Furthermore, there is a danger that the opposing party, or the one who has the material, conceals, destroys or hands over the evidence or in some other manner endangers the preservation of the evidence (danger requirement).

All in all, the requirements for the interim injunction are pretty much the same as the requirements regarding the chapter 7 section 3 of the Code of Judicial Procedure.

In all the applications, Volkswagen has argued that the preservation of the accounting documents is important in order to launch an infringement proceedings and determine the claim for compensation.

The court assessed first the claim requirement. The court stated that the claim requirement is fulfilled also regarding the request no. 3 and the accounting documents mentioned in the request have, per se, a significance in the cases in question.

The court then assessed the danger requirement. According to Volkswagen, there is a substantial danger that the evidence is not going to be preserved, in its entirety, without a seizure. There is a considerable risk that the defendants could, for example, destroy some relevant receipts or sales orders.

The court stated that chapter 2 sections 9 and 10 of the Accounting Act (1336/1997) are providing information on how and how long to preserve accounting documents. Furthermore, chapter 30 section 9 of the Criminal Code of Finland (39/1889) provides that if a person with a legal duty to keep accounts, his or her representative, a person exercising actual decision-making authority in a corporation with a legal duty to keep books, or the person entrusted with the keeping of accounts, destroys, conceals or damages accounting documentation and in this way impedes the obtaining of a true and sufficient picture of the financial result of the business of the said person or of his or her financial standing, he or she shall be sentenced for an accounting offence to a fine or to imprisonment for at most two years.

Therefore, according to the court, it is very improbable that the defendants would destroy any of the evidence mentioned in the request no. 3. The danger requirement is not fulfilled and there was no need to assess the comparison of interest / unreasonable inconvenience.

The request no. 3 was dismissed.

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Enforcement and security

According to chapter 7 section 3 paragraph 3 of the Code of Judicial Procedure, a prerequisite for the entry into force of the interim injunction is that the applicant applies for enforcement of a precautionary measure as provided in chapter 8 of the Enforcement Code (705/2007).  According to chapter 8 section 2 paragraph 1 of the Enforcement Code, enforcement of a precautionary measure requires that the applicant lodges with the bailiff security for loss that the respondent may incur as a result of the precautionary measure. According to chapter 8 section 3 of the Enforcement Code, the defendant can lodge a security in order to prevent the enforcement. 

The main proceedings

According to chapter 7 section 6 paragraph 1 of the Code of Judicial Procedure, when the interim injunction application has been granted, the applicant shall within one month of issue of the order bring an action on the main issue before a court or bring the main issue up for consideration in other proceedings that may result in a decision enforceable in accordance with chapter 2 section 2 of the Enforcement Code. If the consideration of the issue is not initiated within said period, or if the case is discontinued, the preliminary injunction shall be reversed, as provided in chapter 8 section 4 of the Enforcement Code.