IPR Infringement? Rules on securing evidence outside of litigation

The Norwegian Dispute Act's regulations on securing evidence are useful for securing and obtaining evidence which may be impossible to get hold of otherwise. In intellectual property rights (IPR) cases, these regulations are especially useful as the evidence on misappropriation of IPR will often be stored in a digital format and easily be destroyed / made unavailable if the counterparty is notified prior to securing evidence.

However, filing a claim for securing evidence in cases with reluctant counterparties will often be costly. Securing evidence pursuant to the Disputes Act will therefore often be reserved for cases where large values are at stake.

In practice, there are several examples of former employees starting competing businesses and gaining competitive leverage in short time after having left their position with their previous employer. The previous employer may, in such cases, suspect that the success is not the result of the employee's own work/inventions, but instead the result of misappropriation of the previous employer's trade secrets or IPR. If the former employee(s) were to be confronted with the employer's suspicions, and these are legitimate, then the employee(s) are unlikely to present evidence on their misappropriation themselves. Instead, they will likely seek to destroy evidence of their actions.

So, what to do?

There are two key situations where a party may need to secure evidence before a writ is filed. Firstly, such need may arise due to the possibility that a legal dispute must be resolved in court, and there is a risk that evidence may be lost or will not be possible to bring before the court, unless the evidence is secured prior to initiating a lawsuit. Secondly, a party may need access to evidence in order to assess its legal position in relation to others prior to deciding whether to file a lawsuit^[1].

In line with the TRIPS Agreement^[2], the Disputes Act allows a claim for securing evidence outside litigation to be brought before the courts without notifying the possible infringer. In short, the conditions that must be fulfilled for the court to rule in favour of such a claim are:

• The evidence requested to be secured may be significant in a dispute where the requisitioner may become a party or party helper.
• There is either an imminent risk that the evidence will be lost or materially impaired, or for other reasons it is particularly important to access the evidence before a writ is filed with the court.
• There is reason to fear that notification to the counterparty may prevent the evidence from being secured.

Pursuant to the Norwegian Supreme Court's 2014 ruling^[3], the requisitioner is not required to prove that it is most likely that a main claim exists in order for the request to be granted. An assessment of the evidential basis for the main claim will nevertheless be included in the proportionality assessment that must be carried out where the securing of evidence will be an infringement on the right to respect for requisitioner's counterparty's privacy, cf. Article 8 of the European Convention on Human Rights. Thus, it seems likely that the courts will assess the required probability for a main claim to exist as higher in a case involving Article 8 than cases not involving Article 8. If the claim is assessed as not proportional, the claim will be dismissed. A main claim may, for example, be a claim for economic compensation due to infringement of IPR, a claim for prohibition against continued infringement, a reasonable license fee etc.

The requisitioner must further prove that it is likely that it may be party to, or a party helper in, a dispute where the evidence requested to be secured may be of importance. It is also a prerequisite that the requisitioner provides arguments/evidence to such extent that the court finds it probable that the evidence requested to be secured exists.^[4]

After the securing of evidence claim has been executed without notice to the counterparty, the counterparty is entitled to request oral hearings within two weeks of the counterparty being notified that the evidence was secured^[5]. If such oral hearings are held, then the court may fully or partially confirm, modify or revoke its initial decision^[6].

There is scarce guidance in the Disputes Act as to how the process on securing of evidence is to be conducted – after a claim for securing of evidence has been granted. However, the court in practice appoints the Execution and Enforcement Commissioner (namsmannen) to carry out the actual securing of evidence. The Execution and Enforcement Commissioner will also regularly appoint a technical expert to assist during the securing of evidence at the premises where the evidence is believed to be located.

After the securing of evidence has been executed – often in the form of mirror copying, where the entire content of a storage medium onto another storage medium is copied, the court usually appoints a helper who has experience in conducting searches for evidence in electronic storage media. A mandate for the expert's work is usually stipulated by the court after the parties have commented on its content. The mandate provides guidelines and instructions on what the expert should seek to identify, categorise and/or eliminate. A key point in the process is the exclusion and elimination of information subject to a ban on evidence or exemption from evidence.

The expert thereafter prepares a report to the court in which the results of the search are described. The report is presented to the counterparty for assessment of whether evidence prohibition or evidence exemption rules prevent access, and for any exclusion of evidence. The court then decides what the requisitioner should be given access to, cf. the Supreme Court's ruling in HR-2019-439-A section 47-49. In practice it has been discussed, however, whether the Supreme Court's ruling can be understood in such a way that the court shall not provide the requisitioner with the expert report prior to deciding what evidence the requisitioner should be given access to, as such a process may be contrary to the fundamental principles on contradiction.

The benefits of filing a claim for securing evidence may be several:

• The requisitioner may secure and gain access to evidence that would otherwise be impossible to bring into a subsequent dispute.
• The main claim may be impossible to prove without securing evidence prior to filing a writ.
• The securing of evidence may lead to a potentially dangerous competitor being stopped from wrongfully basing its business on the requisitioner's IPR/trade secrets.
• If no evidence on infringement is found, the requisitioner avoids starting an expensive litigation on an incorrect factual basis.
• The chances of settling the case out of court can also be improved.

Before you choose to file a claim for securing evidence, there are several considerations to be made, in particular:

• Internal resources are required. The requisitioner must expect to spend time on gathering factual information and collaborating with the legal experts working on the case in order for the claim to succeed.
• In addition to the requisitioner's internal costs and legal fees, court fees and fees to the appointed expert(s) must be covered by the requisitioner.
• The main rule is that the requisitioner must also cover the counterparty's legal fees.
• Depending on the circumstances, the aforesaid costs may be high, often exceeding NOK 1 million. However, these costs may sometimes be recoverable from the counterparty as part of the costs in subsequent litigation concerning a main claim.
• If securing of evidence is carried out without notice to the counterparty, the requisitioner risks having to pay compensation to the counterparty for any damage the counterparty suffers due to the securing of evidence. This applies, for example, if the claim for securing of evidence is granted, but it later turns out that the requisitioner has no main claim that the securing of evidence could serve to secure.

To minimise costs, increase the chances of finding relevant information and getting the court to agree to the securing of evidence claim without notice to the counterparty, some of the key issues that should be carefully considered are:

• Be certain that the request for securing of evidence is thorough, well documented and that all the requirements that must be met for the court to find in favour of the requisitioner are properly addressed. If the judge e.g. cannot see that there is reason to fear that notification to the counterparty may prevent the evidence from being secured, then the requisitioner should not expect to get a second shot on arguing the case before the court makes the claim known to the counterparty[1].
• For digitally stored evidence in a possible IPR dispute, the risk that the evidence will be lost or materially impaired is particularly relevant for the requisitioner to focus on. To succeed with the claim, it will be necessary to show concrete circumstances indicating a genuine risk that evidence will be lost or materially impaired if securing of evidence is not granted. Whether the threshold is as high as a requirement to prove that it is likely that evidence will be lost unless the securing of evidence claim is granted, is not clear. This uncertainty does, however, give reason to highlight all the issues in the case that indicate that it is likely that evidence will be lost.
• Provide the court with specific information on what media it is probable that evidence is to be found, such as a specific: cell phone, Dropbox account, personal computer, e-mail account, text messaging apps, SMS, iMessage etc.
• The court may decide that the implementation of the securing of evidence shall be on the condition that the requisitioner pays an amount as security for costs/damages that may be incurred. Accordingly, it should be considered to address this question in the request for securing evidence.
• Give thorough consideration to what search words to include in the expert's mandate. If possible, only words / word combinations that will identify information that will constitute evidence for the main claim should be used. A thorough explanation to the court as to why the search words are of such character should be given.
• Seek to avoid that the evidence to be secured will contain evidence subject to the ban on evidence, such as lawyer / privileged correspondence.
• Seek to avoid that the information that is to be secured as evidence goes beyond what is strictly necessary.

^{[1] It is worth noting that if there are reasonable grounds for believing IPR is infringed upon, then a requisitioner may claim information pursuant to the Disputes Act section 28 A1. In such case, the possible infringer, and certain others having connection to the possible infringement, may be ordered to disclose the origin and distribution network of goods or services subject to the infringement.
[2] The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) is part of the WTO Agreement signed 15 April 1994.[3] Cf. HR-2014-962-U
[4] Cf. HR-2021-892-U – cf. LB-2020-124884
[5] Cf. the Disputes Act section 28-3 (4) i.f.
[6] Cf. the Disputes Act section 28-3 (4) second to last sentence cf. section 32-8 (2).
[7] By example see LB-2020-172179 and LB-2020-124884.}