Trade secrets and unfair business practice
In Sunnmøre district court’s judgement of 4 June 2015 Rolls-Royce Marine AS (RRM) was awarded damages of NOK 95 million from Kongsberg Evotec AS (KE) due to violations of the Norwegian Marketing Act section 25 which provides protection against unfair business practice.
In Sunnmøre district court’s judgement of 4 June 2015 Rolls-Royce Marine AS (RRM) was awarded damages of NOK 95 million from Kongsberg Evotec AS (KE) due to violations of the Norwegian Marketing Act section 25 which provides protection against unfair business practice.
The most important question was whether KE had violated the provisions of the marketing act, especially the prohibition against unfair practice (§ 25) by having used the results of RRM’s investments as basis for KE’s own product development and business activities.
The district court found that KE had conducted unfair competition over a long period of time through extensive use of technical information about RRM’s equipment for back deck operations on seismic vessels. The district court’s examination of the equipment showed that on the whole, there were large similarities between RRM’s and KE’s products, and the district court concluded that the similarities were a result of KE’ s abuse of RRM’s drawings and other know-how in their product development.
The court stated that a company may be allowed to look at a competitor’s product and develop it further. However, this was, in the court’s view, not the case in this matter as the court found that KE had systematically copied RRM’s concepts in relation to a number of products. The court also emphasized that KE, through employees transferred from RRM, had deliberately exploited information about RRM’s supplier network and consequently “obtained considerable advantages from being able to approach suppliers that had been certified by RRM and that were more than familiar with the types of products in demand”.
RRM was awarded a compensation of NOK 95 million. The district court found, “after a collective assessment”, that RRM’s claim for a ban on further sales was not allowed.
KE appealed the decision but the appeal has later been withdrawn and the judgment is thus final.