Case Nokian Tyres vs. Black Donuts Engineering: don't steal your employer's trade secrets!

When you are employed by an employer, the results of your work, e.g. in the form of trade secrets, belong to the employer. This is very clear. Even though your name is at the top of a new, fancy report, the results are not your property. The employee cannot therefore use and take away valuable information, even though he or she has created it himself. On the other hand, the professional skills created as a result of the work, “skills”, belong to the person. If you make a patentable invention as a result of your work, the rights to it belong to the employer under certain conditions.

Here is an example of how bad it can be when employees start a new, competing company in unison, and copy the employer's information about tires and their manufacturing processes under the guise of a contract. This is a crime , and the misuse of information can be very expensive. The legal costs alone are like a bomb that goes off and the loser pays!

Photo by Goh Rhy Yan on Unsplash

What can we learn from this ? Employer: do you understand what trade secrets you have? And how to protect them? Do you provide training so that everyone understands the meaning of trade secrets and how they can/cannot be used? Ensure appropriate confidentiality in employment contracts. Don't neglect this!

Employee: you need to understand what trade secrets are, who they belong to, and how they can/cannot be used. Don't try to cheat!

What was this criminal case about?

In 2010–2011 , several key people in Nokian Tyres' product development and factory technology resigned and joined Black Donuts Engineering Oy . They took their employer's trade secrets with them.

What information did they take?

Former employees were in possession of:

• Thousands of files about Nokian Tyres' production technology and product development

• Tens of thousands of recordings containing trade secrets related to, among other things,

  • factory technology

  • for product development

o production processes

This information was used in a competing business, Black Donuts Engineering.

Stages of the legal process

1) Pirkanmaa District Court (2017)

The district court sentenced:

• 10 former employees

  • most to suspended prison sentences of 6–18 months

  • two people fined

• Black Donuts Engineering Oy

  • €300,000 in corporate fines

  • €537,500 for forfeiture of proceeds of crime

In addition, three executives received business bans of 3–5 years .

2) Turku Court of Appeal (2019)

The Court of Appeal mostly upheld the sentences, but commuted some of the sentences :

• Some suspended prison sentences were shortened

• Some fines were reduced

• The CEO's main charge was dismissed , and his suspended sentence was changed to a fine.

• Business bans lifted for two people

• The proceeds of crime to the state increased slightly: €556,800

3) Supreme Court (2019) – FINAL DECISION

The Supreme Court did NOT grant leave to appeal :

• not for the prosecutor

• not for the four people who complained

This means that the Court of Appeal's judgment remained final.