The seizure of evidence under Danish law: when an employee takes more than workforce to a competitor

Claus Barrett Christiansen
Bech-Bruun, Copenhagen
clb@bechbruun.com

Introduction

Employees changing jobs are part of ordinary business life, but the transition becomes contentious when the departing employee is suspected of taking more than their skills, experience and workforce to the new employer. It is not unusual for a former employee to have stolen or copied copyright-protected drawings, technical manuals, product photographs, source code, databases, design files and other internal documentation.

Danish procedural law offers a robust remedy in such situations: the seizure of evidence under Chapter 57 of the Danish Administration of Justice Act.

Seizure of evidence is a court-enforced interim measure designed to secure evidence of specified theft, intellectual property (IP) infringements and related infringements. It must be targeted at material relevant to proving whether theft or infringement has occurred and, if so, the scope of such theft or infringement. There are no passivity considerations requiring an immediate reaction in the same way as for other interim remedies, such as preliminary injunctions, and, in general, Danish courts are accommodating in allowing the seizure of evidence without prior notice to the alleged offender or the offender’s new employer (the ‘defendant’).

Legal requirements for a seizure of evidence order

A seizure of evidence order may be granted at the request of the rights owner (the ‘applicant’) or someone entitled to enforce rights on the rights owner’s behalf, against a person or legal entity suspected of theft or infringement of material protected by rights falling within the statutory scope of the seizure rules. It may also be directed against such person’s employer or other third parties suspected of gaining unlawful access to stolen, copied or infringing material.

Seizure of evidence may also be directed against product infringements where, for example, an employee did not bring any stolen documents or material with them but, nevertheless, used knowledge from a former employer to create something that constitutes an IP infringement or an unlawful product imitation, as defined by the Danish Marketing Practices Act.

In post-employment scenarios where a former employee is suspected of theft or infringement of material protected by IP rights, the applicant must prove it probable, no prime facie evidence is required, that such material is available either at the premises of the employee or at the premises of the new employer. Seizure of evidence may be conducted at multiple addresses at the same time, potentially involving two or more courts, which requires coordination by the applicant.

Seizure of evidence can encompass both physical material and electronically stored material, including data on laptops, servers, mobile phones and other devices.

The process of seizing evidence

Seizure of evidence under Danish law allows prior notice to be omitted if notice is likely to create a risk that objects, documents, digitally stored information or other material will be removed, destroyed or changed. As a general rule, with very few exceptions, Danish courts accept that prior notice will create such a risk. Prior notice is, therefore, almost always omitted.

Upon receiving an application for seizure of evidence, the court will appoint an independent IT expert to assist the court with the seizure. Where seizure of evidence is granted without prior notice, the process will usually take place in two steps. The entire process will often take no more than two to three weeks from the court’s receipt of the application until the actual seizure has been carried out.

First, there will normally be a hearing before the presiding judge, attended only by the applicant’s counsel and, where relevant, witnesses. If the judge is satisfied that there is reasonable cause for seizure of evidence, the judge, the court-appointed IT expert and counsel for the applicant will proceed to the defendant’s premises and request access.

All of the employees of the defendant may be asked to refrain from using their computers and phones, and no one will be allowed to leave the premises while the seizure is being carried out. The defendant is then allowed to call their counsel, and an oral hearing will take place at which the defendant’s counsel can object to the seizure of evidence. This is a difficult position for the defendant’s counsel, since neither the defendant nor the defendant’s counsel will have had time to prepare for such an occurrence, whereas the applicant will often have had weeks to prepare the application.

To proceed with the seizure of evidence, the judge will often require the applicant to provide security to cover the costs and potential liability claims. In practice, the security is rarely more than approximately $6,000 to $20,000, depending on the circumstances.

The applicant must also provisionally bear other costs, such as expert fees and storage costs. These costs are only provisional: if the applicant succeeds, the defendant may be ordered to reimburse them in whole or in part as the costs of the seizure procedure.

The judge will then most likely instruct the IT expert to copy the relevant IT systems, mail servers, servers, devices and documents. This may involve vast amounts of data. The IT expert may retain the copied material in custody while the case is pending and may perform more thorough searches after the actual on-site seizure at the defendant’s premises has been completed. Subsequent searches are conducted in accordance with relevant search terms provided by the applicant and based on a screening process conducted by the court and the IT expert.

Before such searches are performed, and before any relevant material is handed over to the applicant, the defendant has the right to appeal the seizure of evidence decision. If the seizure of evidence is confirmed on appeal, or if the defendant does not appeal, the IT expert and the judge will decide which material should be handed over to the applicant.

Once the seizure of evidence investigation has been completed, the applicant must initiate the main proceedings. During such proceedings, the applicant may submit claims for a permanent injunction, costs, damages and reasonable compensation.

Foreign employees and data with Danish jurisdiction access points

Seizure of evidence is not limited to material physically stored within Danish jurisdiction. As part of a seizure of evidence at the Danish premises of a competitor, the order may cover servers that the defendant can lawfully access from those premises, even if the servers are located outside Denmark.

This is highly relevant in relation to multinational corporations hiring an employee outside Danish jurisdiction and allowing the employee to bring stolen or infringing material that is then made digitally available cross-border and that is also accessible from Denmark. Thus, if a Danish branch or subsidiary can log on to relevant shared drives, project folders, cloud environments, email archives or document management systems, such access may provide the territorial basis for a Danish seizure of evidence order. The court may then require access to such material, with non-compliance potentially being subject to criminal sanctions.

Limitations for seizure of evidence: proportionality and material protected by IP rights, unlawful product imitation under marketing law or certain sui generis protection

Seizure of evidence is subject to proportionality. The court must refuse a request for seizure of evidence completely or in part if the seizure would cause harm or inconvenience disproportionate to the applicant’s interest in obtaining the evidence. Proportionality may affect not only whether seizure of evidence is granted, but also the scope of the search, the material seized, the search terms accepted by the court and the manner in which the seizure is conducted. In practice, however, seizure of evidence is only rarely refused due to a lack of proportionality.

Further, as mentioned above, only material protected by IP rights, unlawful product imitation under marketing law or certain sui generis protection can form the basis of a seizure of evidence order. If, for example, a former employee has stolen technical drawings, such drawings may be protected by copyright under Danish law and may, therefore, form the basis of a seizure of evidence order.

The scope of the seizure is not, however, limited to the technical drawings themselves. Emails, text messages, documents, financial information and other evidence capable of documenting the theft or infringement, and the scope of it, may also be seized and handed over to the applicant if it is relevant and proportionate to do so.

Conclusion

Seizure of evidence under Danish law is a powerful tool in situations where a former employee is suspected of taking IP-protected material to a new employer or competitor, or of using knowledge gained during their former employment relationship to develop products that may infringe IP rights or amount to unlawful product imitation under marketing law. Most applications for seizure of evidence are granted, and from the court’s receipt of the application until the actual seizure has been executed, the process will often only take two to three weeks.

Main proceedings will generally follow, but many cases are settled before such proceedings are concluded, since the defendant is in a vulnerable position once the applicant has been granted access to evidence of theft or infringement.

Many applicants for seizure of evidence appear to be international corporations taking advantage of an effective, fast and relatively inexpensive Danish remedy with a reach that may, in appropriate circumstances, extend beyond Danish jurisdiction.