Legal Alert – Supreme Court Dismisses Charges of Corporate Espionage Against an Employee – Access Restrictions Should Be Continously Updated
The Supreme Court recently issued a ruling concerning corporate espionage charges against an employee of a company. The employee had copied databases and files containing business secrets after having resigned his employment at the company but before his employment relationship had formally ended. Later, the employee founded a competing business enterprise providing services to a client of the previous employer. Both the District Court and the Court of Appeal sentenced the employee for business espionage. However, the charges were later dismissed by the Supreme Court.
Under Chapter 30, section 4 of the Finnish Criminal Code, a person who unlawfully obtains information regarding the business secret of another with the intention of unlawfully revealing or utilizing it shall be sentenced for business espionage. Correspondingly, a person who, in order to obtain financial benefit unlawfully discloses or utilizes the business secret of another, having gained knowledge of the secret while in the service of another, shall be sentenced for a violation of a business secret. However, this section does not apply to an act an employee has undertaken two years after the employment relationship has ended.
The Court of Appeal held that it is justifiable – for the efficient protection of business secrets – to extend the interpretation of the scope of unlawful acquisition of business secrets to circumstances under which an employee’s access to information has not been physically of formally restricted but where the acquisition by copying or by other means has had no connection to duties performed by the employee in question. The Court of Appeal referred to its own case law and legal literaturein support of its conclusion.
The Supreme Court overruled the judgement stating, inter alia, that the prerequisite of unlawful acquisition is essential in determining whether the section concerning business espionage is applicable to the case at hand. The Supreme Court held that – even though the employee spent the remaining duration of the employment on vacation – the employee’s access to the files and databases had not been explicitly restricted after his resignation and that the employee therefore had copied the files within the limits of the employee’s valid data collection privileges. Therefore, the acquisition of the business secrets was not considered unlawful as intended in Chapter 30, section 4 of the Finnish Criminal Code.
Keeping this in mind, businesses shall continuously update access restrictions to important business secrets they wish to protect and keep within their sphere of control. Although the section concerning violation of a business secret does afford businesses some protection, employees may still after two years utilize or disclose business secrets employees have obtained during the course of their employment.
Borenius represents corporations, directors, managers and other individuals in connection with a broad range of criminal and government investigations, enforcement actions and litigation. Our Corporate Crime practice operates in various business contexts and at every stage of criminal investigations, trials and appeals.