Court confirms sentences for misappropriation of Nokian Tyres’ business secrets

The sentencing of nine former Nokian Tyres employees for the misappropriation of business secrets has been welcomed by both the tyre maker and by Black Donuts Engineering – albeit for different reasons. Both parties now look forward to progressing beyond the case, which has been ongoing since 2011.

Following a trial lasting 40 days, the Court of Appeal in Turku, Finland sentenced nine people, who transferred confidential information to Black Donuts Engineering, for infringement and misuse of Nokian Tyres’ business secrets. Those sentenced include eight people directly employed by Nokian Tyres (all resigned in 2010 or 2011) and the employee of a subcontractor. Two others previously received non-appealable sentences in the case.

The court convicted all of the defendants, and eight defendants in total have been sentenced to conditional prison sentences (similar to a suspended sentence) ranging from four months to one year. Black Donuts Engineering was fined 100,000 euros and the court estimated the amount of the criminal gain received by Black Donuts at 556,800 euros. All claims for damages by Nokian Tyres were dismissed.

Nokian Tyres states that the convicted persons “took tens of thousands of records containing Nokian Tyres’ business secrets related to factory technology and product development, among other things, and used them for competing business operations.”

Commenting on the sentences handed down by the court, Hille Korhonen, president and chief executive officer of Nokian Tyres, said: “This case has been processed since 2011, and we are happy that a decision has been reached and all defendants have been convicted.”

We have learned from this experience

While Black Donuts was disappointed with the original findings of the District Court, it shares that it was “prepared to accept the decisions and move on continuing to grow the successful business.” However, the decisions were appealed, and the company says it is “satisfied” with the outcome.

“Corporate fines have been substantially reduced (the Pirkanmaa District Court originally fined Black Donuts 300,000 euros) and in the case of team members involved, in every case fines or punishments have been reduced,” writes Black Donuts in a statement. “This means there will be no significant impact on the current financial position as the previously given fines had been already substantially paid from trading cash flows.

“We welcome and respect the additional clarity provided by the Appeal Court’s decision today,” the company continues. “For us, the most important thing, however, is to finally have an end to this long case which will allow us to accelerate the growth of our core business; helping our global industry clients to be more and more successful.”

For Black Donuts, the case has proven to be an “unwanted distraction” for it and its employees: “Inevitably this situation has led to discussions with stakeholders, investors and customers who have needed an additional and exceptional level of re-assurances.”

Starting out as a small start-up company in 2010, Black Donuts has evolved into a tyre technology provider with a sizable client list. “The growth is expected to accelerate now that the Nokian court case is finally over,” it posits. “We have a strong, international team consisting of highly skilled experts with diverse talents and backgrounds.

“On a positive note we have learned from this experience,” continues Black Donuts. “We have restructured our organisation and sharpened our processes to better meet our high objectives and the boom cycle of global tyre industry. We have enforced issues of compliance in our corporate policy in order to safeguard compliance in all areas of operation and to help every team member deliver on our organisation’s broader goals.

“At every step of our journey, we have always put our customers first and served them to the fullest. This will definitely continue: through constant improvement, intelligent innovation and investments, education and our finetuned supplier ecosystem. Being a smart, brave and innovative vanguard in the global tyre industry is our way to face the future and to ensure that we can supply the best quality and value for the highest customer requirements,” concludes Black Donuts.