The Finnish Supreme Court recently clarified the circumstances where an employer can add a non-competition clause into an employment agreement.
Pursuant to the Finnish Employment Contracts Act, particularly "weighty reasons" related to the operations of the employer or to the employment relationship are required for an enforceable non-competition obligation agreed in the employment agreement or otherwise in the beginning or during the employment.
In July 2014, the Finnish Supreme Court issued a precedent (KKO:2014:50) where it was assessed whether weighty reasons for a non-competition agreement existed in a case regarding an employee who was working as an automation engineer in a company providing automation and robotic systems for the food industry.
The Supreme Court ruled that the employer did not have particularly weighty reasons for the non-competition clause limiting the employee's right to engage in new employment for four months after the termination of employment.
The Supreme Court's principle reasoning was that only a small part of the employee's duties was of such nature that the employer would have needed protection through a non-competition clause.
The employee did not accrue essential research knowledge or take part in confidential sales activities of the company during the employment. Nor did the employee's position support the need for a non-compete restriction because of its low level in the employer's organisation. Additionally, the employee's salary level – a monthly basic salary of slightly below EUR 2,400 at the time of the termination of employment – was regarded as so low that it could not have been regarded sufficient to compensate the restriction caused to the employee.
In relation to the employee's duties as the main user of the employer's server, the Supreme Court assessed that the confidentiality provision, including liquidated damages of EUR 20,000, was sufficient to protect the business and trade secrets of the employer.
Moreover, the Supreme Court referred to the Finnish Criminal Code prohibiting the violation and misuse of business secrets and stated that the protection under criminal liability, in addition to the risk of liquidated damages, were sufficient to ensure the protection of the confidential information against competing actions.
Consequently, the non-competition clause was not binding and the employer was not entitled to liquidated damages for the employee's breach of the non-competition clause.
Under Finnish law, an employee's right to conclude a new employment contract with a competing employer or to engage in competing activity on his or her own account can be limited for a maximum period of six months, if particularly weighty reasons exist.
To determine if weighty reasons exist such to justify the non-competition clause, employers are required to analyse the following:
Firstly, with regard to the employer's operations, if the work consists of product development, the need for a non-competition clause is considered to be more significant in terms of the need for protection against competing companies.
Additionally, an agreement of non-competition is generally justifiable if the employee, due to his or her position, receives confidential information or if the employee accrues special knowledge as a result of his or her duties.
As a rule, it can be said that the higher the employee's position within the employer's organisation is, the more likely it is that particularly weighty reasons are deemed to exist.
Grounds for a non-competition clause may exist if an employee carries out his or her duties independently or otherwise with a high level of responsibility, or if the salary level is regarded as high.
Although there is no statutory requirement to pay any compensation to the employee for a non-competition obligation that is valid for less than six months after the termination of employment, a low salary level may often indicate that the employee's position or duties do not constitute weighty grounds for a non-competition clause to be enforceable.
Additionally, the type of field of business of the employer may have an impact on the assessment on whether there are justified grounds for the non-competition clause at hand.
In some fields of business, in which renewal of new information and development of technologies/methods is fast and essential, correspondingly the need to protect business secrets against competitors is vital.
Also, ensuring the confidentiality of information related to customers and trade secrets (such as pricing) may support the justifications for a non-competition agreement.
Although non-competition clauses are in many cases recommended, it is to be noted that if particularly weighty reasons are not deemed to exist, the non-competition clause is null and void.
Moreover, there are certain other limitations with respect to the enforceability of non-competition clauses. In instances where the enforceability of a non-competition clause is uncertain, you may wish to consider if there are other ways, such as through use of confidentiality clauses, that you can best protect a company's vital interests. Read more...
Ever type your trade mark into a search box only to get results to a competitor's goods and services? Businesses that use someone else's trade marks as keywords in web stores without the owner's permission may engage in trade mark infringement, confirms a recent ruling of the Finnish Market Court.
Business owners naturally expect an online search using their trade marked terms will lead to their goods and services. Problems arise when a competitor or other third party captures a trade marked term as a keyword and directs people to goods and services that do not belong to right holder's business operations.
Is this legal?
According to the Finnish Market Court's ruling in Wellmen Oy v SOK (MAO:516-517/14), this type of online advertising is infringing. The court's judgement was not appealed and is now final.
In its decision, the court held the use of a keyword that was identical with a registered word trade mark "Selätin" infringed rights based on the trade mark registration. The disputed keyword was used in a web store's product search.
The Finnish Market Court referred to a judgment of the Court of Justice of the European Union (CJEU) in the Google AdWords case Google France and others v Louis Vuitton Malletier SA (C-236/08–C-238/08), and held the use of the keyword resulted in confusion regarding the "commercial origin" of the trade mark.
After the keyword "Selätin" was typed into a web store's product search box, the result yielded a third party's competing product instead of offering the product of the trade mark holder, which was not at all available. The products in question were considered identical. The webpage to a third party's product appeared immediately after the search with the keyword was conducted. The trade mark was visible on the page after the search also.
In light of these circumstances, the court stated the average consumer was likely to be confused of the commercial origin of the product. This confusion endangered the basic function of a trade mark, which is to serve as an identification of origin. The confusion was not avoided even though the actual names of the marketed product, as well as its producer, were both available on the webpage. The trade mark owner had a right to prohibit the use of its trade mark as a keyword in connection with the other party's product.
The thread of the Finnish Market Court's reasoning followed the CJEU's decision in the Google AdWords case, where the CJEU stated the origin function of a trade mark is adversely affected by keyword advertising if the advertisement does not enable the relevant audience to ascertain (or enables them ascertain only with difficulty) whether the goods and services originate from the owner of a trade mark.
Not only giving guidance for the national courts' decision making, the CJEU's interpretation also had an impact on major search engine keyword practices.
Nowadays, when a trade mark owner lodges a complaint, representatives from Google and Microsoft's Bing investigate and may enforce certain restrictions on the use of a trade mark in advertising. Other search engine organisations have also initiated the same practice. At issue is whether the use of a trade marked term as a keyword, in combination with particular advert text, is confusing as to the origin of the advertised goods and services.
It appears likely that since the case assessed by the Finnish Market Court was successful based on the reasoning that the trade mark's origin function was adversely affected by the keyword usage, the court made no further assessment of the use based on other functions of a trade mark. These functions were considered, among others, in the preliminary ruling in Interflora v Marks & Spencer (C-323/09), in which the CJEU acknowledged, in addition to the primary function (as a badge or origin), a trade mark may have a number of additional functions.
The CJEU indicated that trade mark owners may be able to take successful legal action whether or not the primary function of a mark is put at risk. This could be the case where a keyword takes unfair advantage of the distinctive character or reputation of a trade mark or where it causes damage to a distinctive character and reputation of a trade mark.
Nevertheless, it is still left for the national courts to determine these issues based on the facts and circumstances of the situation at hand. The original Interflora case is still unresolved, as the case was recently remitted to the High Court for retrial in the United Kingdom.
The decision of the Finnish Market Court is a welcome clarification on the scope of trade mark protection.
For trade mark owners, the ruling gives further comfort to claims against illegitimate use of a trade mark as a keyword in those instances where the consumer cannot identify a commercial origin of the goods and services appearing in context with the used keyword.
Furthermore, recent case law suggests that businesses should plan their keyword advertising carefully. It is advisable to go through your keywords and search functions to make sure you are not unintentionally indulging in a trade mark infringement.
Here are some tips you should consider to protect your trade marks and avoid keyword issues in your business operations:
• Monitor keyword usage by your competitors, third parties and major search engines
• Consider whether your distributors and resellers are using your trade marks as keywords and provide guidelines for such use
• Go through keywords and search functions used in your own business advertising and make sure your practices are appropriate
• Consider legal actions when necessary Read more...
The Finnish Labour Court issued, in the end of August 2014, its rulings based on the preliminary ruling of the Court of Justice of the European Union (CJEU) issued earlier this year in cases concerning employees' right to salary for consecutive maternity leaves when the second pregnancy occurred during unpaid family leaves following their maternity leaves.
The Finnish Labour Court declared that provisions in collective agreements requiring employees to return to work between family leave and a new maternity leave in order to be entitled to salary during maternity leave are against the mandatory provisions of Finnish Employment Contracts Act and are, therefore, null and void.
Under Finnish law, maternity leaves are unpaid, but many Finnish collective bargaining agreements provide for salary during a part of the maternity leave on the condition that the employee returns to work between two maternity leaves in order to receive salary during the second maternity leave.
The CJEU ruled that such conditions are in breach of European Union law. This preliminary ruling significantly alters the right to salary during consecutive maternal leaves in Finnish collective bargaining agreements.
The preliminary ruling in the joined cases C-512/11 and C-513/11 concerned two requests for a preliminary ruling by the Labour Court of Finland in two essentially similar matters concerning two women and their right to salary during their second consecutive maternity leaves.
Following initial periods of maternity leaves, the two women took unpaid parental leaves. They then got pregnant for the second time during their unpaid childcare leaves and notified their employers of their pregnancies and asked to interrupt their unpaid family leaves and consequently take a new period of maternity leave.
The employers accepted the notifications concerning the interruptions of the unpaid family leaves, but refused to pay the employees salary for the second maternity leave.
The reason for this was that the applicable collective agreements stipulated a requirement for a certain period of work in between paid maternity leaves, and the employees did not return to work between the first maternity, parental and childcare leaves and the second maternity leave.
In both cases, the employees were entitled to maternity allowance provided for by law, while the employers should normally pay the difference between that allowance and their normal salary if the employees are based on collective bargaining agreements, company policy or individual agreements entitled to salary during a certain part of their maternity leave.
The request for a preliminary ruling essentially concerned whether a provision in a collective bargaining agreement stipulating that salary during maternity leave is not paid to an employee if the employee does not return to work between two maternity leaves.
In its ruling, the CJEU considered Directive 96/34 on parental leave and two objectives of that directive.
Firstly, the framework agreement constitutes an undertaking by management and labour to introduce, through minimum requirements, measures to promote equal opportunities and treatment between men and women, by offering them an opportunity to reconcile their work responsibilities with family obligations.
Secondly, the framework agreement enables new parents to interrupt their professional activities to devote themselves to their family responsibilities, whilst giving them the assurance that they will be entitled to return to the same job, or, if that is not possible, an equivalent or similar post consistent with that employee's employment contract or relationship at the end of the leave.
The CJEU found that the choice of an employee to exercise her right to unpaid parental leave should not affect the conditions on which she may exercise the right to take a different leave, in this case maternity leave. The CJEU emphasised that taking unpaid parental leave in this case inevitably means that an employee who needs to take maternity leave immediately after that parental leave loses part of her salary. The CJEU further emphasised that a pregnancy is not always foreseeable.
The CJEU concluded that provisions in collective agreements, pursuant to which a pregnant employee who interrupts a period of unpaid parental leave to take a maternity leave does not benefit from the salary to which she would be entitled had that period of maternity leave been preceded by a minimum period of resumption of work is in breach of European Union Law.
It is to be noted that the CJEU referred to the directive concerning parental leaves although the employees were on childcare leaves, which is not a right guaranteed by the directive referred to by the CJEU.
The employees were still entitled to an income, at least equivalent to the sickness allowance provided for by national social security legislation, as required by the Pregnant Workers Directive (92/85), but not the additional salary provided for in the collective bargaining agreement.
Many Finnish collective agreements include corresponding requirements of a period of work between family leaves and also some employers not bound by any collective agreements have been applying the same principles.
However, based on the rulings of CJEU and the Finnish Labour Court such a requirement shall from now on be deemed to be in in breach of European Union law and the Finnish Employment Contracts Act, and therefore, null and void. As employees do not have a statutory right to paid family leaves, these rulings may also have an impact on future collective bargaining and on employers' willingness to voluntary offer paid maternity leaves. Read more...
A recent amendment to the feed-in tariff act (1396/2010) means you can reserve your spot in the feed-in tariff system today - even if your project is not yet ready for final approval.
On 30 April 2014, the Finnish parliament approved the government's proposal on amending the feed-in tariff act (1396/2010).
The amendment makes it possible to get a binding reservation from the Finnish Energy Authority to the effect that the electric capacity of wind power plants under development have a place reserved within the overall feed-in tariff quota of 2,500 MW already before the final approval application to the feed-in tariff system.
The quota is the aggregate limit for electric capacity of wind power plants that will be accepted into the feed-in tariff system. The decision is binding for a period of two years, and the final application for approval to the feed-in tariff system must be filed within this time period.
The requirements are that the wind power developer has received building permits for the wind turbines and entered into a binding grid connection agreement with a grid operator for connecting the wind turbines to the grid.
Moreover, if the connection agreement is not directly made with Fingrid Oyj, a confirmation from Fingrid Oyj must be obtained that the electricity produced by the wind turbines may be fed to the main grid.
The reservation system took effect starting on 30 June 2014.
According to the Feed-in Tariff Act, the basic rule regarding priority of acceptance to the Feed-in Tariff Act is time priority, meaning that the electricity producer who has first submitted its approval application to the feed-in tariff system receives priority over any subsequent applicants.
When the wind power developer is ready to submit the final approval application, there is a risk that the overall feed-in tariff quota of 2,500 MW has already been reached.
In the future, the order of priority is changed to the effect that the Energy Authority must take into account also projects that have reserved a spot in the feed-in tariff system. The order of priority in respect of reservations to the feed-in tariff system is also based on date and time for submitting the reservation application.
In the reservation application, information must be submitted regarding the electricity producer, the wind turbine type, the nominal power output of the wind turbine type, the investment time table as well as other information that may have an affect on the decision. Further requirements may be given by Finnish government decree.
However, the Energy Authority has confirmed that a decision on, for example, wind-turbine type, does not necessarily have to be final at the time when the reservation application is filed. Wind power producers have an obligation to inform the Energy Authority if the capacity of the wind power plants is reduced after the reservation decision has been granted, so that Energy Authority can free capacity to the feed-in tariff system to others.
However, the reservation decision is not binding to the extent the capacity of the wind power plants is increased afterwards.
The Energy Authority grants the reservation if all necessary information has been submitted and there is no obstacle for granting the decision pursuant to the Feed-in Tariff Act; for example, there is still capacity left in the feed-in tariff system and that the wind power plant fulfils all other requirements for being accepted to the feed-in tariff system.
On the other hand, the Energy Authority must deny the reservation application if there is significant insecurities due to the large amount of wind turbines, other reason for doubt that the wind power producer does not fulfil the requirements for being accepted to the feed-in tariff system, or if there is doubt that the wind power producer will make the final approval application in the future.
The Energy Authority must also deny the reservation application to the extent the total capacity of approved wind power projects and reserved capacity to the feed-in tariff system is exceeded.
The reservation decision is in force for two years from the date the decision received legal force. However, the decision will not be valid for longer than until 20 June 2020, meaning that if the reservation decision gained legal force less than two years before such date, the reservation decision is regardless in force only until 20 June 2020.
The reservation decision may be transferred to another wind power producer upon written application to the Energy Authority, in case the ownership of the wind power plant is transferred. However, the reservation may not be transferred from one wind power plant to another.
The Energy Authority may cancel the reservation decision if false or erroneous information has been submitted to the Energy Authority that would have had an impact on the decision or if a wind power producer neglects to notify the Energy Authority about reduction of the nominal power output of the wind turbines. Read more...
European Commission confirms private equity investors' potential cartel liability for portfolio companies.
A recent European Commission decision found financial services giant Goldman Sachs liable for the cartel activities of a company that was part of Goldman Sachs's investment portfolio.
Goldman Sachs's liability was based on the decisive influence exerted over the company through voting rights and board representation.
The decision can be seen as a signal from the Commission that it is prepared to hold private equity investors liable for competition law infringements of portfolio companies.
On a practical level, this means private equity companies may have to look closely at their due diligence processes before making an investment.
On 2 April 2014, the European Commission imposed fines totalling EUR 301.7 million on eleven producers of underground and submarine high voltage power cables. The companies had operated a global cartel from 1999 to 2009.
According to the Commission, the companies involved had agreed on price levels, shared markets and allocated customers between themselves. In addition to the actual cartel participants, the Commission found companies exerting decisive influence over them to be jointly and severally liable for the fines.
One of the companies held liable was Goldman Sachs. A fund managed by Goldman Sachs Capital Partners owned a stake in an Italian cartel participant, Prysmian. According to the Commission, Goldman Sachs had decisive influence over Prysmian through its control of Prysmian's board of directors.
On these grounds, the Commission held Goldman Sachs jointly and severally liable with Prysmian for a fine of EUR 37.3 million. This is not the first Commission decision holding a private equity investor liable for the actions of its portfolio companies, but the previous cases have dealt with much smaller cartels and investors.
The Commission imposed the highest individual fine in the case, totalling EUR 104.6 million, on Prysmian. This was based on the volume of Prysmian's sales, the length of its participation and its central role in the cartel.
The joint and several liability of Goldman Sachs covered approximately one-third of the fine. A previous owner was held similarly liable for the rest of the fine.
According to Joaquín Almunia, the Commission member responsible for competition policy, Goldman Sachs was involved in the decision-making of Prysmian in a way that was "not [the] normal involvement of a financial investor".
The Commission held that Goldman Sachs essentially controlled Prysmian through its appointments in the latter's board of directors. The Commission emphasised the fact that Goldman Sachs was updated on the business of Prysmian through monthly reports and could have replaced the board of directors at any time.
Even though Goldman Sachs reduced its stake in Prysmian from 2005 onwards, the Commission found that it continued to exert de facto decisive influence over the company at least between 2005 and 2007.
Goldman Sachs has announced that it is considering appealing the decision.
The Commission has consistently held parent companies liable over the actions of subsidiaries in cases where the subsidiary has not been operating independently in the market and the parent company has exerted decisive influence over it. In these circumstances, the Commission does not have to prove that the parent company itself participated in the infringement.
When assessing whether the parent had such decisive influence over the subsidiary, the Commission takes into account all economic, organisational and legal connections between companies.
Typically, these connections include shareholdings, voting rights and rights to appoint members of the board. The Court of Justice of the European Union has confirmed that a shareholding of 100% gives rise to a rebuttable presumption of such decisive influence.
Holding Goldman Sachs liable does not in itself constitute a major change in the Commission's practice. EU courts have confirmed that private equity investors may be fined for the actions of their portfolio companies.
However, the decision makes it clear that the Commission does not see any difference between private equity investors and other owners with regard to liability for competition law infringements.
The Commission's decision signals that it is advisable for private equity investors to exercise caution and to carefully assess the competition law compliance culture in their target companies, both when making investment decisions and during ownership.
A failure to do so may result in an infringement fine of up to 10% of the annual worldwide turnover of the entire group concerned. The liability remains even if the stake is later disposed.
These issues should be taken into account in conducting due diligence reviews of potential target companies, as well as in drafting purchase agreements. Read more...
Your company’s compliance programme may not be the easiest topic to bring up at an executive management meeting, but it probably is one of the most important.
What makes for a good compliance programme?
This topic was raised at a Krogerus Compliance Officer Roundtable that gathered a cross-section of business executives in Finland. Here is a summary of some ideas you may wish to keep in mind.
A compliance programme is a set of internal policy decisions that aims to assure a company is following all rules and regulations applicable to its business operations.
Compliance as a business function first took hold in the United States in response to several corporate scandals in the 1970s and 1980s. Over the years, it has slowly spread to Finnish shores, and has recently gained real traction.
While it is not uncommon for in-house legal counsel in Finland to take care of compliance matters, companies are increasingly hiring a compliance officer. A few Finnish companies are also considering whether to create a compliance function that is independent from the legal department.
The cornerstone of a good compliance programme is articulating the risk appetite of the company and balancing it against the risk tolerance.
The risk appetite reflects the amount of risk the company is willing to take and, respectively, the risk tolerance describes the risk capacity the company is capable to carry in pursuit of its business objectives. Risk management cannot be about avoiding all potential risks, but it should be used as a mechanism helping to prioritise identified risks.
A compliance programme is meant to support your business strategy. Therefore, risk assessment and measuring the risk appetite and risk tolerance is an integral part of the strategic planning. Once this balancing exercise has been done, the compliance programme can be tailored to meet the strategic needs and requirements of your business.
A good compliance programme identifies the inherent risks and establishes appropriate mechanisms to control them, while it acknowledges the residual risks.
The contents of the inherent risk is influenced by the company’s regulatory environment, volume and scope of activity, including products, customers and distribution channels, as well as history of compliance problems.
The residual risk is a risk that remains after controls are taken into account. Handling the residual risks means either accepting it as a part of the agreed risk appetite or reducing it by starting over the risk analysis and adding certain control mechanisms.
The key factor for establishing an independent compliance function is to clearly define its tasks, which can be challenging.
The tasks of the compliance function are defined based on the risk assessment. Therefore, the tasks should concentrate on the regulatory regimes where non-compliance would harm the business most or those areas where non-compliance is most likely to happen.
For a compliance function to be independent, it is paramount that access to the board or a sub-organ focused on risk management is secured. Also, the compliance function should be clearly fenced from the risk audit of the company.
Although the increasing amount of regulation gives rise to certain concern, there are positive sides to a well-functioning compliance. High integrity and focus on ethical values increases the pride personnel feel for their company, which, in turn, increases the commitment and efficiency.
Once risk-oriented thinking becomes established in the company’s business operations, personnel takes ownership and responsibility for compliance and ‘doing the right thing’. Feeling an important piece in the puzzle promotes the objectives of a compliance programme.
But, most importantly, there cannot be any commitment by personnel if the management commitment goes missing. The significance of the tone from the top can also be supported by empirical evidence. Therefore, setting the right corporate culture really matters.
So, while implementing a compliance programme is not easy, if done well, the rewards are multi-fold. Read more...
Traditionally, the estate administrator’s main duty has been to liquidate the machinery of the estate as quickly as possible. But there are alternative possibilities.
Instead of seeing the bankruptcy estate as a pile of assets left behind by a company that has gone through financial hardship, smart thinking says you should see this as an opportunity to start a new business.
At its best, bankruptcy means a fresh start for a successor company without burdens of the bankrupt one. At the same time, it also allows the estate administrator to take into account the broader interests of the different stakeholder groups.
While this sounds enticing, there are important factors to keep in mind.
It is one of the most important tasks of the estate administrator to realise the assets belonging to the bankruptcy estate. The administrator has to strive to sell the assets promptly and in a cost-effective way.
The sales method you choose needs to reflect the best possible price. It is often advisable to try to sell the business in its entirety or as an operational unit of the debtor company to a successor company.
In general, selling an operational unit is almost always a better option than selling assets separately.
The sales price of an operational unit is usually higher because some of the assets are of substantial value to a successor company but would be of very little or without any value to an outsider when sold separately. Assets of this kind are various intangibles and items with utility value related to land, buildings and fixed assets.
In addition, selling a bankruptcy estate to a successor company saves costs.
Usually you can achieve a substantially higher overall sales price when selling the bankruptcy estate as an operational unit, even though the maintenance costs are the same when selling assets separately.
The sale of assets (such as manufacturing plant) of a bankruptcy estate to a successor company naturally has considerable beneficial impacts on society and stakeholder groups beyond just the creditors in bankruptcy.
When a new company is born from the ruins of bankruptcy, it usually has a positive impact on local employment and other companies, such as former investors, subcontractors, suppliers and distributors of the bankrupt company. Ongoing revenue from a company also increases the tax base, which has a ripple effect across society.
Sometimes, the former employees can keep their jobs and the business remains in its old location.
Selling the assets of a bankruptcy estate as an operational unit is a challenging task. This complicated process requires mastering the daily operations of the entity and understanding both the business drivers and the legal issues that will allow it to continue well into the future.
Especially in bankruptcies of medium-sized and large companies, the estate administrator and the entire bankruptcy administration have to face and resolve complex issues dealing with the management of business operations.
By being realistic and proactive and by efficiently relaying information to the creditors, the estate administrator and the bankruptcy administration can avoid possible pitfalls that typically plague the sale of an operational unit.
The successful sale of an operational unit requires co-operation with major creditors who effectively have the supreme decision-making power in bankruptcy proceedings. Often, the estate administrator can also draw on the solid business and financial know-how of the major creditors.
The successful sale of the business or an operational unit requires that the estate administrator actively pursues selling the operational unit, which is facilitated by the administrator contacting potential purchasers immediately after the declaration of bankruptcy.
Ideally, this should be done on the first day of the bankruptcy proceedings. Unfortunately, the debtor company and its business operations depreciate in value throughout the process.
It is desirable that the preparations for finding a successor have been started even prior to the declaration of bankruptcy. In such cases, there is a known purchaser upon declaration. It is possible to carry out a sale of an operational unit within weeks from the declaration of bankruptcy, but this requires timely actions from the estate administrator and carrying through the actions that have been commenced prior to the bankruptcy.
Sometimes it may be economically justified for the bankruptcy administration to continue business operations in order to sell the business or an operational unit. It is often reasonable to continue operations until the end of the terms of notice to the employees.
When considering continuing business operations for a longer period, the estate administrator and creditors must be very cautious and ground their decisions on detailed calculations.
In order to find a potential purchaser and to obtain a decent sale price, it is essential for the bankruptcy estate to ascertain that all necessary documents (for example, environmental licences) are valid and in force.
This means that several factors have to come together seamlessly.
When done correctly, selling the business or operational unit as a whole offers a win-win to both the creditors and society-at-large. Read more...
When you are looking to hire someone, you may wonder what you can ask and what you cannot during the interview process. One misstep and a potential candidate might get the wrong impression about you and your company – or, worse still, accuse you of employment discrimination.
In your search for the right person, you may want to keep a few things in mind.
Finnish law does not provide a list of questions that an employer can or cannot ask during a job interview. However, when assessing what kind of questions should be avoided, privacy and anti-discrimination laws play an important role. It should also be noted that using Google or other search engines on the Internet may not be allowed.
The privacy of a job applicant is protected by the Act on the Protection of Privacy in Working Life and the Personal Data Act. Additionally, in order to avoid discrimination claims, an employer should take into consideration the obligations arising from the Non-Discrimination Act and Act on Equality Between Women and Men.
The key requirement set forth in the legislation is the necessity requirement. An employer may only process information that is directly necessary for the employment relationship. Therefore, whether or not the question is deemed appropriate depends on the position and its requirements.
In addition to the necessity requirement, an employer must take into consideration the requirements regarding non-discrimination and equality – and bear in mind the extended protection against non-discrimination.
According to the Non-Discrimination Act, an employer is not allowed to discriminate based on a person’s age, ethnic or national origin, nationality, religion, belief, opinion, health, disability, sexual orientation or other similar reasons. In addition, pursuant to the Act on Equality Between Women and Men, an employer cannot discriminate based on a person’s gender, pregnancy or childbirth.
Any questions related to the above-mentioned matters may lead to the presumption of discrimination, which places the burden of proof on the employer. This presumption may be difficult to rebut. In a possible dispute, an employer must prove that there was no breach of the anti-discrimination provisions, which in practice usually means that employer must prove that there were objective grounds not to hire the candidate.
Allegations of discrimination may be avoided by focusing on matters that are relevant for the position. This practice also complies with the requirements set to protect the candidate's privacy.
Although no exact list of do’s and don'ts can be made, it is a fairly safe to say that in most cases questions regarding the candidate’s marital status, ethnic background, religion or sexual orientation are not justified based on the necessity requirement. These questions may be difficult to justify, and they may often give rise to the presumption of discrimination.
Questions regarding the candidate's health may be justified only to the extent directly relevant for the position. As also these questions may give rise to presumption of discrimination, they should only be used if the position actually imposes demands on the candidate's health and the employer is able to demonstrate this.
Additionally, all of the candidates should be asked the same questions as oppose to requesting this information only from those candidates who seem to have lower working capacity, for example, based on their physical appearance or information submitted in their CV.
It should also be noted that if the employer later on finds out that the employee has provided untrue information during the interview when he/she was asked a question that may be interpreted discriminatory the employer may not take any legal measures due to employee's dishonesty.
Based on Finnish law, an employer is allowed to collect information on the candidate primarily from the candidate himself/herself. Information may be obtained from somewhere else only with the candidate's consent.
Using Google or other search engines on the Internet during the recruiting process may also be problematic. Even if it is not prohibited to ‘google’, information obtained when googling cannot be collected or used during the recruiting process.
It should also be noted that the information obtained by googling may be inaccurate or concern another person with same name as the candidate. Collecting and using this information requires the consent of the candidate.
If the information has been obtained without his/her consent, the candidate should be notified prior to making any decisions and should be given the right to access the information collected by the employer to evaluate its accuracy.
The restrictions regarding googling and collecting information apply to candidates that have applied for the position, but in general not to headhunting.
The Personal Data Act allows headhunters and others to find suitable candidates through the Internet, so long as the material you are searching for concerns generally available information regarding the professional status, duties or performance of a person.
However, as soon as the person becomes an applicant, the employee’s privacy is covered by the Act on the Protection of Privacy in Working Life.
When the candidate has included referee information on the application or provides this information during the interview, it can be interpreted as consent to collect information from the named person. However, it should be noted that the consent is limited to that specific person, and the employer cannot contact anyone else form the same organisation.
The use of drug tests and personality and aptitude tests, as well as the processing of the candidate's credit information, are also regulated by law. Drug tests, as well as personality and aptitude tests, require the candidate’s consent. If the statutory requirements for requesting credit information are fulfilled, no consent is required, but the candidate should be notified prior to obtaining the information. Additionally, the candidate must be informed of the register that is used to obtain the credit information.
The safest route to gather information is to collect information directly from the candidate and the named referees, and request consent if information is collected from other sources. Googling without the consent of the candidate is not recommended, as the employer may have difficulties to exclude any information found by googling from his/her mind prior to making any decisions.
If the requirements are met, the use of drug tests and requesting credit information may be recommended to evaluate the candidate’s reliability. Additionally, personality and aptitude tests may also add value to the recruitment decision.
Even if these methods require consent, it is unlikely that a candidate with a genuine interest in the open position would decline. If the employee does not consent, the employer may draw conclusions for the reasons behind refusing consent.
If the provisions of the Non-Discrimination Act are violated in connection with the recruitment process, the candidate may claim indemnity in the amount of EUR 15,000.
If the employer is deemed to breach the obligations under the Act on Equality Between Women and Men, the candidate may be entitled to an indemnity in the minimum mount of EUR 3,240.
The maximum amount set for the indemnity (EUR 16,210) is only applicable if the employer is able to demonstrate that the candidate would not have been selected even if the choice had been made on non-discriminatory grounds. Otherwise, the Act does not provide for a maximum amount of indemnity.
If personal information is collected and processed contrary to the provisions laid down in the Act on the Protection of Privacy in Working Life and the Personal Data Act, the representatives of the employer may also face criminal liability. Read more...
A top-level domain (TLD) is the suffix at the end of a domain name: for example, the .com at the end of krogerus.com. TLDs can be divided into various categories, including country code TLDs (ccTLDs) and generic TLDs (gTLDs). Currently, there are only 22 gTLDs available for use by anyone, anywhere in the world – .com, .net and .org are the most prominent of these.
However, the situation is about to change drastically.
Following the launch of the new gTLD programme, a total of 1,930 applications for new gTLD strings were filed with the Internet Corporation for Assigned Names and Numbers (ICANN). These included 1,409 unique strings. The most popular strings – .app, .home and .inc – were subject to about a dozen applications each. The first seven new gTLD strings* will become operative on 26 November 2013, with many more to follow in the coming months.
This insight examines the possible implications of the new gTLD programme for brand owners.
It can be a challenge these days to find a .com or .net domain name that is both practical and available. For example, had the krogerus.com domain name already been taken, Krogerus might have considered registering the domain name krogerusattorneys.com or krogerusfinland.com. However, neither of these would have been quite as convenient as the natural first choice.
Overcrowding of the current gTLD namespace is one of the main reasons behind the new gTLD programme. It is anticipated that the launch of an abundance of new gTLDs will bring more variety and choice to internet naming, making it easier for end users to locate the content they are interested in. In the near future, for instance, Krogerus could also opt to register such domain names as krogerus.ltd or krogerus.law.
An increased freedom of choice is not necessarily purely positive. It can also increase the potential for cybersquatting and other types of online trade mark infringement. For example, gTLD strings such as .discount, .sale and .shop could become popular amongst companies selling counterfeit or look-alike products. Meanwhile, gTLD strings such as .exposed, .sucks and .wtf could be used to discredit or denigrate certain brands.
So, what can you as a brand owner do to stop second-level domain names such as yourbrand.shop and yourbrand.sucks from falling into the wrong hands?
The Trademark Clearinghouse (TMCH) was set up to address some of the potential problems faced by brand owners. A brand owner that has entered its trade mark into the TMCH will have the opportunity to register second-level domain names that are an exact match to that trade mark before they become generally available.
This so-called sunrise period will last for 30 days after the launch of each new gTLD. It will be followed by a trade mark claims period of at least 60 days. During this time, anyone attempting to register a second-level domain name matching a trade mark entered into the TMCH will be notified of the trade mark. Should the notified party decide to go ahead with the registration, the trade mark owner will be informed of this. It can then consider what action it wishes to take.
Some new gTLD registry operators will also offer their own rights protection mechanisms. For example, Donuts Inc., which has applied to operate 307 new gTLDs, will implement its own Domains Protected Marks List (DPML). The DPML will enable brand owners to block their trade marks from registration across all gTLDs operated by Donuts Inc. Most trade marks entered into the TMCH will also be eligible for inclusion in the DPML.
However, the DPML will provide more extensive protection than the TMCH. In addition to exact matches, it will also allow the blocking of second-level domain names fully containing an exact match. In other words, if included in the DPML, the trade mark EXAMPLE could be used to block both example.clothing (exact match) and fake-example.clothing (exact match plus).
Certain major brand owners have also opted to register their own gTLDs to distinguish authorised websites from unauthorised ones.
For example, the gTLDs .apple, .google, .mcdonalds, .microsoft and .visa have been applied for by the respective brand owners. This is a rather costly option, taking into account the technical requirements that all applicants must fulfil as well as the USD 185,000 application fee charged by ICANN. The next application round is also not likely to commence for another few years. However, especially for owners of large trade mark portfolios, registering one's house mark as a gTLD could be worth considering. In Finland, applications have been filed by the City of Helsinki (.helsinki), Kone Corporation (.kone), Nokia Corporation (.nokia and .诺基亚) and Phenomena Group Oy (.promo).
In addition to new rights protection mechanisms, new dispute resolution procedures will also be introduced. These are intended to supplement, not replace, the existing Uniform Domain Name Dispute Resolution Policy (UDRP).
Most notably, the Uniform Rapid Suspension System (URS) will offer an even faster and more affordable means for dealing with infringements. The grounds for filing a complaint are essentially the same as in the UDRP. However, due to the very speedy nature of the proceedings, cancellation or transfer of the disputed domain name is not an option. Instead, if the examiner finds in favour of the complainant, the registry operator must immediately suspend the domain name for the rest of the registration period. In other words, the domain name will be prevented from directing to the original website. Instead, it will redirect to a webpage indicating that the domain name has been suspended following URS proceedings. It will not be possible to transfer, delete or modify the suspended domain name during the remainder of the registration period.
For brand owners, the new gTLD programme entails both a greater freedom of choice and a heightened risk of online trade mark infringement. In order to best be able to take advantage of the former and combat the latter, it is advisable to enter at least one's most valuable trade marks into the TMCH. This is possible provided that the trade marks in question are registered or have been validated by a court of law.
In addition, the trade mark owner must prove that the trade marks are in use. This can be done by submitting a signed declaration of use as well as, for example, a screenshot of the trade mark owner's website, copies of marketing materials or photographs of goods bearing the trade marks. Proof of use in the traditional sense is not required. Rather, a single sample is sufficient.
Nevertheless, due to the relatively short duration of the sunrise and trade mark claims periods, it will become even more important to invest in quality domain name watching services.
* .bike, .clothing, .guru, .holdings, .plumbing, .singles and .ventures Read more...
We have all read of them in the papers: 3D printed handguns, musical instruments, grandfather clocks (with full machinery), robotic insects hovering on their own – you name it. It seems that with enough time and effort almost anything can be 3D printed these days, and 3D printing has become the weapon of choice for DIYers.
But what are the legal implications of 3D printing and how will this technology impact your business? While you may not do it yet, it is possible that you will start buying and selling products using 3D printing technology at some point in your business cycle.
One area of law where 3D printing may have potentially far-reaching ramifications is product liability. A 3D printed object can prove to be defective for a whole battery of reasons, such as:
You do not need to be a fortune teller to predict that courts will be asked to shed light on some tricky liability questions in the not-too-distant future.
Consumers are naturally protected by imperative provisions that sellers cannot contractually deviate from. But in the business-to-business context, it is possible to have a say on your liability position in both individual contracts and chains of contracts. As a vendor, you should negotiate a disclaimer, non-liability clause or cap – or otherwise limit your liability. You should also seek an indemnity for third-party claims. Be sure to include an arbitration clause so that any possible dispute remains confidential.
If you are the buyer, the indemnity clause should function the other way around. It is in your interest to minimise the vendor’s limitations of liability and try to achieve liability caps that still provide some comfort if liability is eventually triggered.
Attempt to get a guarantee and certain key warranties by the vendor concerning the characteristics of the products. And if in doubt, seek advice – preferably beforehand. In the long run, it is normally the most economically advantageous thing to do.
3D printing also has several implications in terms of intellectual property law. The main ones are as follows:
Copyright. The digital models used for printing a three-dimensional object may constitute subject matter protected by copyright. Under the Finnish Copyright Act, descriptive drawings and graphically or three-dimensionally executed works are considered literary in nature. Future case law will show whether parallels can be drawn between such a literary work and a physical object. The physical object may be copyright-protected in and of itself, but the high threshold of originality for articles of utility mean that protection is more difficult to attain than in the area of fine art.
Designs. Anyone who has created a design may, through registration, obtain the exclusive right to it. The exclusive right to a design implies that no person other than the right holder is entitled to use the design without a licence, except for private use for non-commercial purposes. The right holder’s entitlement to prohibit usage such as 3D printing, however, is restricted by the fact a design right does not cover features of appearance of a product solely dictated by its technical function.
Trade marks. Any kind of mark that can be represented graphically, including the shape of goods or of their packaging, may be a trade mark. The effect of the rights in a trade mark is that only the proprietor may use it in business. It follows that manufacturing an object that in one form or another reproduces other proprietor’s two- or three-dimensional trade mark requires a licence, provided that the object is manufactured for business purposes. As with designs, however, the exclusive right in a trade mark does not apply to any part of the mark mainly dictated by functional considerations.
Patents and utility models. Functional considerations belong to the realm of patents and utility models. The exclusive right conferred by a patent or utility model implies that only the proprietor may exploit the protected invention for commercial purposes. Since the term “exploit” covers, among other things, the act of making a protected product, unauthorised 3D printing of such a product is a prima facie infringement. A person distributing protected model files might be liable for a secondary infringement, assuming that the files can be considered the “means” of working an invention referred to in the Finnish Patents Act.
New industrial revolution?
Last year a writer for The Economist argued that the consequences of all the changes that will be brought about by the widespread use of additive manufacturing, more commonly three-dimensional (3D) printing, will amount to a third industrial revolution.
The first revolution began with mechanisation in the late eighteenth century and the second with the introduction of the assembly line in the late twentieth. Now, goes the argument, we are on the threshold of a new era, as the digitisation of manufacturing will transform the way goods are made.
3D printing is a process of making physical objects of virtually any shape from a digital model. The final product is achieved using an additive process where an object is manufactured by depositing material layer by layer. No separate mould is required – the digital model is the virtual mould. A number of different additive processes are used, and the materials that can be printed range from various plastics and ceramics to metal alloys. (Rearden Metal still remains unavailable, but Chinese scientists have begun printing organs with living tissue.)
Chambers Europe has conferred to Krogerus its Award for Excellence in Finland for 2013. This is the first time Chambers Europe has bestowed this honour in Finland.
On 20 March 2013, the Finnish government issued its much-awaited proposal for a new Electricity Market Act and an amended Natural Gas Market Act. It also sent to the parliament a separate supervision act.
The proposal implements the European Union's third Electricity and Natural gas Directives to the Finnish legislation. It also includes numerous nationally prepared amendments and changes.
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A recent ruling by the Court of Justice of the European Union (CJEU) could mean trouble for many Community trade marks.
This is an important year on the taxation front. New rules restrict interest deductions and increase the transfer tax related to the sale of shares in housing and real estate. Additionally, two tax incentives support research and development activities, as well as innovation and growth.
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European Union companies with emissions should start to consider if they want to buy emissions from auctions to meet their quotas. The first primary auctions have already been executed by the common EU auction platform European Energy Exchange AG (EEX). The time is now to gather the information you need to start buying your emissions allowances.
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With a law enacted on 17 December 2012, the Finnish parliament moved forward on the longstanding plan to house intellectual property rights disputes in the Market Court. This legislative reform has a significant impact for all companies operating in Finland. The Market Court will start to hear these disputes in the autumn of 2013.
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Wind power offers Finland an attractive means to hit its renewable energy targets. It is estimated that by 2020 some 800 turbines will operate throughout the country, bringing 2,500 megawatts of production capacity. And there are plans for much more wind farms in the pipeline. While the Finnish wind power industry is still in its nascent stage, look for this to change in the near future.
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Over the past few years, high frequency trading has changed the landscape of financial markets. Although trading algorithms have existed for years, the scope of their application, as well as their complexity, has evolved significantly.
European regulators are now taking a closer look at speed trading to see how they can regulate this activity.
Each trading day CNBC’s television news reporter Maria Bartiromo takes us to the New York Stock Exchange trading floor to count down the day’s session. But these days, only some 30 per cent of the NYSE trades go through the floor’s specialists. Instead, the vast bulk of trades are done by super-computers located in the NYSE’s data centre, in Mahwah, New Jersey.
While arbitration offers an excellent means for parties to get their disputes settled faster than in traditional courts, how you draft the arbitration clause in a document is critically important for a positive outcome – should a dispute arise.
Companies operating in the European Union should also take caution in setting recommended resale price for their goods.
European Union competition rules say that suppliers cannot fix resale prices or set minimum prices for goods. When a supplier breaks these rules, authorities can hold that their actions are prohibited “resale price maintenance”.