OASIS

                        ORGANIZATION OF ADVOCATES SPECIALISING IN INTERNATIONAL SERVICES

Labour law 

On December 2, 2009, the Swedish Labour Court delivered a final verdict in the controversial and highly publicised case between the Latvian company Laval un Partneri Ltd (“Laval”) and the Swedish Construction and Electricians’ unions (the “Laval case”). The ruling followed years of litigation both before the Swedish Labour Court and the European Court of Justice (the “ECJ”). The Labour Court awarded the plaintiff, Laval, damages and legal costs amounting to approximately SEK 2,700,000 (roughly € 270,000). 

Collective bargaining agreements have traditionally held a strong position in Sweden and the Laval case became very much a matter of principle for the industry, the trade unions and Swedish politicians.  

Laval had stationed workers from Latvia at construction sites in Sweden. The Construction union (Sw. Byggnads) took notice of the company and approached them with a request for them to sign a local collective bargaining agreement. Laval declined, inter alia, since it already had an agreement with the Latvian Construction union and none of the employees at Laval were members of either one of the Swedish unions concerned. The Swedish collective bargaining agreement stated that the hourly wage of the workers should be SEK 145 (roughly € 15), which was higher than the minimum rate pay stated in the Latvian collective agreement.  

As the parties could not come to an agreement, the Construction union decided to take collective actions against Laval, and the Electricians’ union initiated a sympathy strike. The strike involved, inter alia, a blockade of all construction work on Laval’s working sites. The actions resulted in the cessation of all work on Laval’s sites and the construction workers leaving Sweden.  

On December 7, 2004, Laval filed a suit in the Labour Court against the unions, claiming that the Court should, through an interim decision, declare that the unions’ collective actions were unlawful and should be revoked. Laval also sued for compensation for the losses incurred. The Labour Court denied the petition for an interim injunction and later went on to decide that it would, in accordance with article 234 of the EC treaty, request a preliminary ruling from the ECJ. 

On December 18, 2007, the ECJ ruled that the collective actions constituted a restriction on the freedom to provide services within the meaning of Article 49 EC and directive 96/71/EC[1] and that such restriction could not be justified (case C-341/05). After the preliminary ruling had been presented, the case was resumed in the Swedish Labour Court. The ECJ’s view on the matter was then used as a basis for the Labour Court’s decision on whether or not the plaintiff was entitled to compensation.  

Laval claimed that the trade unions were responsible for violating the EU treaty in two ways; (i) by making claims regarding the collective bargaining agreement which did not have any basis in directive 96/71/EC, and (ii) by requiring that Laval should enter into an agreement with the Construction union, despite the fact that the company was already bound by a Latvian collective agreement.  

The Labour Court found that the trade unions could be made responsible for the violations of EU law and that the consequences of such violation of the treaty should be damages. The Court concluded that, because of a provision in the Employment (Co-Determination in the Workplace) Act (1976:580) (Sw. MBL), the fact that Laval was already bound by a collective agreement did not mean that the collective actions were unlawful under Swedish law. However, since the ECJ had decided that the provision was discriminatory and in violation of the treaty, the rule should, in accordance with EU law, not be applied. As a result of this, the Court decided that the collective actions were unlawful and the trade unions were held liable for damages.  

However, the Labour Court rejected Laval’s claim for financial damages. Even though it was considered clear that Laval had suffered such losses due to the collective actions, the company had not been able to show the extent of its losses and the Court did not have sufficient basis for deciding on an amount. Nevertheless, the trade unions were enjoined to pay general damages to Laval (a total of SEK 550,000, approx € 55,000) and to cover most of Laval’s legal costs.  

The judgement was not unanimous. Three of the seven judges had a dissenting opinion and two of them wanted to reject Laval’s claims altogether.  

The case is particularly interesting since the Labour Court as late as in December 2004 – when deciding on the interim injunction – found that the collective actions were lawful. Some observers view the Court’s verdict as particularly harsh, since the legal situation was unclear.

COMPETITION law 

On January 1, 2010, a new set of provisions were added to the Competition Act. The provisions give a court the authority to prohibit public authorities or companies from conducting business that distorts the competition on the market.  

Every year the Swedish state and the municipalities sell goods and services for a total value of approximately SEK 150 billion (approximately € 15 billion). The sales are subsidized by tax revenues and often compete with private businesses.  

The public’s business activities on markets exposed to competition have long been controversial and much debated upon. Although the Competition Authority has received numerous complaints regarding such public businesses, so far there has been no remedy for a private business that is negatively affected by the public’s competing business.  

The new provisions enable the District Court of Stockholm to prohibit the public sector, including companies in which the public sector has a dominating interest, from using certain practices which distort or impede the presence of or the development of competition. Municipalities and county councils can also be prohibited from operating a whole business that would have such effects. The rules apply to all types of businesses that fall under the Competition Act’s definition of an “undertaking”, which basically includes all types of activities with a financial or commercial nature, regardless of whether the businesses have a purpose of profit-making. Hence the activities of a municipality may fall under the scope of the provisions, regardless of whether these activities are carried out within a company or not.  

However, there are some exceptions to the main rule. Certain practices are exempt if they are considered justifiable from a public perspective, e.g. when the public interest of the business outweighs the interest of competition on the market.  

INTELLECTUAL PROPERTY LAW

In April 2009, the Swedish Supreme Court delivered a judgement in the “Mini Maglite-case”, a copyright case that has attracted a lot of attention. The Supreme Court found that the flashlight Mini Maglite has its own identity and presents a consistent and well-balanced design contribution. Thus, the flashlight was considered to be protected under the Swedish Act on Copyright in literary and artistic Works. 

The American company Mag Instruments (“Mag Instruments”) has been selling flashlights in Sweden for 30 years. In 1999, Mag Instruments filed a lawsuit against IKEA, claiming that IKEA was selling a nearly identical flashlight to Mag Instrument’s model Mini Maglite. According to the plaintiff, the Mini Maglite was protected by the Copyright Act as piece of “applied art”. IKEA rejected Mag Instrument’s claims.  

The Supreme Court held that the design of the flashlight did not differ to a large extent from what was common at the time of the design. However, the shape and finish of the design was considered to go beyond being banal or trivial. The court held that the design was considered to be a result of more than a routine work effort and that the flashlight possessed a certain degree of originality.  

The Supreme Court stressed that copyright protection within the area of industrial design could have a restraining effect on competition and the possibilities to develop products. This could be true even if the scope of the protection was narrow. However, to limit copyright protection to only include exact replicas could not be consistent with the fundamental principles of the Copyright Act. In this case, the court held that the established copyright protection went beyond exact replicas but that the scope of protection was limited. 

It should be noted that the Supreme Court did not consider whether or not the flashlight sold by IKEA was within the Mini Maglite flashlight’s scope of protection under the Copyright Act. Instead, the Supreme Court remitted the case back to the Court of Appeal to deliver judgment based on the principles established by the Supreme Court.

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