1.1 What are the principal sources of law and regulation relating to patents and patent litigation? (Briefly describe the role of international, federal or state laws and relevance of court decisions, list and briefly describe relevant statutes and international treaties)
Hungarian patent litigation is principally based on the Hungarian Patent Act, ie Act XXXIII of 1995 on the protection of inventions by patents which entered into force on 1 January 1996 and has been amended several times: the last amendment took effect on 15 April, 2006.
As patent litigation is typically concerned with court procedure in Hungary, especially in procedural aspects, the rules of the Civil Code (Act IV of 1959 on the Civil Code), the Code of Civil Procedure (Act 1952 on the Code of Civil Procedure), Act CLXV of 2005 on the Enforcement of Intellectual Property Rights (in force as of 15 April 2006) as well as certain articles of the Hungarian Criminal Act are relevant.
Hungary has ratified a great number of international conventions and agreements, among others the Paris Convention, the GATT–TRIPS Agreement, the European Patent Convention and, as member of the EU, it is also obliged to take into consideration the provisions of European Union Directive 2004/48/EC, which lead to Act CLXV as mentioned above. The latter Act modified, among others, the Patent Act regarding enforcement matters with provisions which are now part of the Patent Act.
1.2 What is the order of priority of the relevant sources, ie which take precedence in the event of a conflict?
Hungarian legislation has always been amended so as to comply with the international conventions and therefore, in the case of patent litigation pertaining to a patent granted in Hungary, Hungarian legal rules always apply. In the event of a conflict, these international conventions may be applied and considered, but decisions shall be made by applying Hungarian law only.
2.1 In which courts are patents enforced? Are they specialised patents courts? If not, what level of expertise can a patent holder expect from the courts?
As the administrative and court systems of Hungary are highly centralised, patent enforcement too is highly centralised. Though there are no separate patent courts, enforcement of patent rights other than patent holders’/inventors’ claims for fees must be initiated at the Metropolitan Court of Budapest. This court, which also serves as the court for appeals of first instance against decisions issued by the Hungarian Patent Office, includes two IP Divisions, with three members of each; the President of the Division, the judge in charge of the case and an additional member. At least two but sometimes all members of the Division have both a technical and legal background; obviously, the judge in charge of the case should have a technical background relevant to the subject matter of the patent. As the technical judges have had practice as patent attorneys or examiners in the Hungarian Patent Office, a reasonable level of expertise may be expected.
2.2 To what extent are courts willing to consider, or are bound by, the opinions of other national or foreign courts that have handed down decisions in similar cases?
The court of first instance has developed its own general opinion on the handling and deciding of litigation matters and is not bound by the opinion of other national courts, except decisions made by a special supervisory Board of the Supreme Court (which is the final stage of an appeal process wherein requests for supervision may be submitted against the decisions of the Court of Appeals). Apart from that, the Metropolitan Court, though it may consider foreign court decisions, especially since Hungary has been a member of the EU, is not bound to do so and usually prefers not to.
2.3 Do the courts deal with infringement and validity simultaneously? Or must invalidity actions be brought in separate proceedings? If so, before which court or government agency (eg the Patent Office)?
The Metropolitan Court has jurisdiction for the following matters:
department, one of the Division members is the Examiner having been in charge of the case, while the third member is nominated from the Legal Department of the Hungarian Patent Office.
For the above reasons, infringement actions and appealed invalidity actions generally arrive in the same Division but are not dealt with simultaneously. According to Hungarian legal practice, it is first the invalidity action which needs to be final; the infringement action is decided only with knowledge of the final status of the patent.
An exception to this rule is the action for preliminary injunction. As the Metropolitan Court, ie the court of first instance in such action, is required to decide the matter within a very short term (regularly 15 days), the existence of an invalidity action cannot be considered. However, as a general rule, infringement actions are shelved until the final decision in the invalidity action is made.
2.4 Who can represent parties before the courts handling patent litigation and/or the government agency dealing with patent validity issues?
In accordance with general legal rules, parties may be represented in any action having any connection with IP rights by a lawyer and/or patent attorney; Patent attorneys are admitted to represent clients before the Hungarian Patent Office, the Metropolitan Court, the Court of Appeals and the Metropolitan Court without any limitation.
2.5 What is the language of the proceedings? Is there a choice of language?
The language of the proceedings must be Hungarian and, in this respect, there is no opportunity for a choice of language, even if parties consent.
2.6 To what extent are courts willing to grant cross-border or extraterritorial injunctions?
A cross-border injunction is one of the options the patentee may seek at the court during an infringement action. Provided that the fact of infringement is found, such a decision would be obvious and will be granted. However, extra-territorial injunction is a very disputed area in Hungary especially as EU accession only took place on 1 May 2004; I would not imagine that any court would be willing to grant such a decision and, even it did, that it would become enforceable.
2.7 To what extent do courts recognise the blocking effect of ‘torpedo’ actions abroad?
As mentioned before, Hungarian courts are not bound to and do not like to consider decisions made by foreign courts or other authorities. Accordingly, it is highly unlikely that reference to a foreign torpedo action would be of guidance or would be recognised in Hungary.
3.1 How is patent infringement assessed? To what extent does the doctrine of equivalents apply in an infringement action?
Assessment of the patent infringement is made according to all facts and proofs provided by the plaintiff and defendant while the basis of the proceedings is obviously the set of claims of the patent/patents involved in the procedure; the claims must be interpreted with reference to the content of the specification and drawings. Deviation from this general rule may be applied only if certain equivalence is obvious from the state of the art; according to Art 24(3) of the Hungarian Patent Act:
‘the content of the claims cannot be limited exclusively to their verbatim meaning but
cannot be attributed with a meaning as if they would only provide guidance to those
skilled in the art for defining the invention to be protected’.
Actually, Hungarian courts use the doctrine of equivalence to a very limited extent only and mostly rely on the disclosure provided by the specification and drawings.
Defences of an alleged infringer may be preventive and offensive. A typical preventive institution is filing a request for establishment of non-infringement. In such an action, the technology or product sought to be used and put on the market, respectively, must be compared with the patent/s nominated by the party. This procedure, which should be initiated at the Hungarian Patent Office and decided by the same at first instance, is an adversary proceeding, ie the patentee also becomes a party to the procedure. Once the existence of non-infringement becomes final, the patentee is deprived of the chance to start an infringement suit and/or preliminary injunction action against the technology nominated by the alleged infringer even if new evidence arises.
The request for establishment of non-infringement may be, however, submitted only before an infringement action is initiated against the technology/product as mentioned above on the basis of the patent/s. This is the reason why infringement actions are not preceded by sending a warning letter to the infringer; starting the infringement action later than the alleged infringer submits the request for establishment of non-infringement is most probably designed substantially to delay the infringement action.
The Hungarian Patent Act does not apply the institution of pre-grant or post-grant opposition. An additional defence of the party intending to exploit the subject matter of a Hungarian patent application or patent might be an invalidity action, as partly discussed above. Obviously, a nullity action may be of post-grant character only but may precede an infringement action.
Though pre-grant opposition is not possible (the post-grant opposition is equal to the nullity action), submitting observation(s) during the examination phase against the pending patent application is possible. The person/entity would not become a party to the examination; the observation is decided ex officio and the petitioner will only be advised of the results.
3.3 To what extent can enforcement of a patent expose the patent holder to liability for an antitrust violation?
Not a single action based on antitrust violation has been initiated in Hungary so far. Given that the Hungarian Patent Act provides a legal exclusivity to use all the institutions provided by the law, the logics of the relations of the co-existence of these separate laws exclude the possibility of such liability.
The grounds of invalidity of a patent might be the same as those that would have excluded the grant of a patent on the invention during examination. Such conditions may basically be lack of novelty, inventive activity and industrial applicability, or if the invention relates to subject matter excluded by special Article of the Hungarian Patent Law, such as discoveries, scientific theories, aesthetic creation, etc. It is important to mention that, though the applicant is not examined during the prosecution procedure, the patent may also be invalidated on the ground that it has not been granted to the true patentee.
3.5 Can a court only partially invalidate a patent? Can it transform the patent into a utility model?
Patents may only be partially invalidated during such a procedure both by the Hungarian Patent Office and the corresponding courts through the appeal procedure. Such invalidation is generally judged by motion of the plaintiff or defendant. However, a patent may not be transformed into a utility model.
Claims may be partially invalidated by amendment of an original claim; accordingly, it is not absolutely necessary to cancel claims in their entirety.
3.7 Are there any grounds on which an otherwise valid patent can be deemed unenforceable, owing to misconduct by the patent holder, or for some other reason (eg expiry of time limit)?
A valid patent can be and must be enforceable during its lifetime. Where the patent expires before an infringement action is started, or during such an action, the consequences of infringement can only be judged up to its expiry date.
3.8 Can a patent holder bring a law suit claiming both patent infringement and unfair competition for the same set of facts?
While infringement actions are governed by Hungarian Patent Law, illegal marketing activity falls under the regulation of the Unfair Competition Law. Two law suits based on the same set of facts may be initiated either simultaneously or successively, though the latter is relatively unlikely because of the rules relating to the time limits for lodging law suits. It may also happen that on request of one of the parties, a selected law suit is shelved until the decision in the other.
4.1 Who can sue for patent infringement (patent holder, executive licensee, non-exclusive licensee, distributor)? Does a licensee need to be registered to sue?
Any person or entity which has an interest in the patent may sue for patent infringement, provided that such interest has been registered at the Hungarian Patent Office. Such parties can be the patent holder or any of the patent holders, assignee, exclusive or non-exclusive licensees, sublicences and the like. Recordal of changes may also be effected during the patent infringement action. In this case, however, the law suit should be initiated by patentee or licensor while the third party may intervene only after recordal.
4.2 Under what conditions, if any, can an alleged infringer bring a law suit to obtain a declaratory judgment on non-infringement?
As mentioned before, the request for establishment of non-infringement may be submitted only before an infringement action is initiated against the technology/product as mentioned above on the basis of the patent/s. This is the reason why infringement actions are not preceded by sending a warning letter to the infringer; starting the infringement action later than the alleged infringer submits the request for establishment of non-infringement is most probably designed substantially to delay the infringement action.
4.3 Who can be sued for patent infringement? Can the company directors be sued personally? Under what conditions, if any, can someone be sued for inducing or contributing to patent infringement by someone else?
Under the Hungarian Patent Act the entity in the name of which the alleged infringement has been committed may be the subject of infringement suit. However, under the Civil Code, the Code of Civil Procedure and even the Criminal Law, company directors may also be sued personally. These law suits, unless the Criminal Law is applied, are usually drawn together. Those inducing or contributing to patent infringement may be sued as well.
As infringement action is a complex procedure, adding a party to the law suit is possible, though time limits usually apply. However, in cases of well-founded facts, such time limits may be put aside. On the other hand, subtracting a party to the litigation is possible at any time. In this case, however, cost compensations for this party might be ordered.
5.1 What options are open to a patent holder when seeking to enforce its rights in your country?
A patent holder, seeking enforcement of its patent in Hungary, has, of course, many options to act under the different laws listed above. However, the most effective and appropriate way is to lodge a law suit against an alleged infringer at the Metropolitan Court. This action may be initiated as a request for preliminary injunction only but it should be followed or completed by an infringement suit within a very short time limit.
Criminal proceedings are available in Hungary. According to s 329/D of the Hungarian Criminal Code (Violation of Industrial Property Rights), the violation of a patent (or other IP right) constitutes a crime. The section provides for sanctions that, according to the value of the injury, can amount even to a term of imprisonment of up to eight years. Certainly, imprisonment would be ordered only in exceptional cases, so generally a fine is levied against the defendant. A criminal procedure alone is, however, unlikely to be successful in a complicated patent case; it should be accompanied by an infringement action. It is even more advisable to go on with the criminal action concurrently with the infringement action as the criminal action is not heard at the IP Division, and most probably not even at the same court. (In other IP cases, eg: trade mark, the criminal process itself can be an appropriate solution.)
Border measures may be requested and made, but such measures are only effective if they are connected to preliminary injunctions.
5.4 To what extent are alternative dispute resolution (ADR) methods (such as arbitration or mediation) available to resolve patent disputes? If arbitration is available to assess invalidity, will your Patent Office recognise and execute an arbitral award declaring a patent invalid?
Alternative dispute resolution methods, though already available in Hungary, have not been used to resolve patent disputes. On the other hand, patent status affairs, like invalidity actions, are subject to the Hungarian Patent Act. The whole patenting procedure undertaken by the Hungarian Patent Office is an exclusive state administrative procedure; invalidity actions may not be subject to an arbitration process.
As already mentioned the patent infringement action is a typical court procedure to be initiated at the Metropolitan Court, Budapest, optionally accompanied with or preceded by a request for interlocutory injunction. Apart from all the data necessary for identifying the parties and the basic patent, the writ should include the legal ground, the facts as well as all claims. The infringement writ is also to contain all possible and available proofs necessary to rule the case, an estimate of the damages and any motion necessary for the decision. If damages cannot be estimated or defined, a motion for checking the alleged infringer’s books as well as, if necessary, for appointing a technical expert to examine the alleged infringer’s technology in-house, may also be submitted.
Patent infringement law suits are decided by the Division of the Metropolitan Court consisting of three judges. The jury system does not exist in Hungary.
6.3 To what extent are documents, affidavits, witnesses and/or (court-appointed or private) experts used? Is it possible to cross-examine witnesses?
The Division of the Metropolitan Court, before making the decision, uses all the materials, ie those submitted by the parties during preparation of the law suit, including art documents, affidavits and expert opinions submitted by the parties. But, should the need arise, it may prefer to appoint special experts from the technical expert body of the Department of Justice or independent experts agreed by all the parties.
Though it does not happen very often, witnesses may obviously be proposed and invited as well as cross-examined. Documents may be filed in the original (ie foreign) language, but the Division has the right to request a simple or certified translation, should the importance of the material require it.
6.4 To what extent is pre-trial discovery permitted? If it is permitted, how is discovery conducted? If it is not permitted, what other, if any, mechanisms are available for obtaining evidence from an adverse party or from third parties?
The pre-trial discovery process is an exceptional legal instrument that will be detailed here as the preliminary evidencing procedure. Apart from this, the process which may serve to discover at least part of the facts and obtain information from adverse party and third parties (unless they consent to provide proof and documents) includes the appointment of expert(s) to examine the adverse party’s facilities to obtain technical and financial facts which, however, would be available to the Division only. Of course, the plaintiff has the right to make voluntary statements as to the details of its technology, product and sales, as well as optionally of the purchasers, distributors, etc.
6.5 What level of proof is required for establishing infringement or invalidity?
Of course, the level of evidence mostly depends on the Division’s expectations in an infringement action. As a general rule, the court wants to be certain that the patent on which the whole action is based is valid. Therefore, infringement action is regularly stayed if the validity of the patent in question is attacked. Once the status of the patent is clear, the law suit is continued, unless the patent is invalidated, at least to the extent that the ground of the law suit is lost. The level of proof in the invalidity action is about at the level generally required by the Hungarian Patent Office during examination. In such cases, any new documents and facts are examined at the same standard. During the appeal procedure against the decision made by the Hungarian Patent Office, the Division of the Metropolitan Court handles the case at the same level as in the appeal cases generally, ie the standard of decision at the second level would not be different only as the invalidity action was due to an infringement case and thus, the stake is much higher.
6.6 How long do patent infringement proceedings typically last? Is it possible to expedite this process?
Infringement actions are quite lengthy in Hungary. As there are only two Divisions of the Metropolitan Court, they are overworked and have a great backlog. After receiving the writ, the Court sends these documents to the defendant who must be given sufficient time (typically 2–3 months) for submitting counter-arguments and additional documents, etc. In the best case, provided that all the material necessary for a hearing has been collected, the date for a hearing may set – but even then it will not be earlier than 5–7 months. Of course, both parties may submit complementary arguments and counter-arguments which will be considered by the court. Additional arguments may still be put forward at the hearing as well. Provided that the first hearing provides sufficient information for the Division to make the decision, the first instance trial typically lasts one year. Should the material and the hearing prove not to be sufficient for decision, additional material may be requested and, on request of either the Court or any of the parties, experts might be appointed. Thus, the decision of first instance may be delayed possibly by another year, thus adding up to two years from initiating the infringement action.
It is very difficult to expedite the process, as the ‘weak point’ is the great backlog of the Court. It should be remembered that only two IP Divisions deal not only with infringement actions of first instance but also act as the first instance appeal for all status cases in patent, trade mark, utility model, design decisions issued by the Hungarian Patent Office, as well as other actions relating to other fields of IP, such as inventor’s or author’s remuneration suits in similar cases as well as eg copyright belong to the competence of this Court. As the majority of these cases need hearings as well, the delay can be reduced only very slowly.
As mentioned above, the one-year period is an optimistic estimate for the first instance procedure. Delaying the process may be brought about by a great number of actions; the easiest way is, of course, the invalidation procedure against plaintiff’s patent.
6.7 What options, if any, are available to a defendant seeking to delay the proceedings? Under what conditions, if any, can proceedings be stayed? How can a plaintiff counter delaying tactics of defendant?
In a court action, a defendant cannot be inhibited from taking whatever action is required to build up the proper defence. Therefore, the defendant is also entitled to present evidences, especially if the burden of proof is on him. Patent matters may be connected to complicated technical issues, where the receipt of an objective expert’s report is necessary to clarify the facts behind the alleged infringement. This evidence is often a time-consuming procedural step.
According to s 19(7) of the Patent Act, pending proof to the contrary, a product is deemed to be produced through the patented process, if the product is new, or it can be deemed highly probable that the product has been manufactured through the patented process, but the patentee could not define the actual process applied, even after having taken the steps generally expected in the given situation. It may especially be deemed highly probable that the product has been produced through the patented process, if that is the only process that has become known. Provided that these criteria are met, it will be the defendant’s obligation to prove that the infringement did not take place, so the burden of proof will be on the defendant.
The defendant is also entitled to question the validity of the patent the alleged violation of which forms the basis of the case. Thus, the defendant has the right to file, even in the course of the patent action, a patent invalidation request with the Patent Office. The Patent Office adopts a decision on the subject matter, which is subject to further remedies at court, generally at the same council where the infringement case is running. The outcome of the patent cancellation issue is, in principal, a condition precedent of the decision to be taken in the infringement case; thus the infringement action will be suspended by the final decision adopted in the cancellation matter. A request for invalidation can significantly prolong the infringement action.
Certainly, the defendant cannot pursue his rights without limits: the court is not obliged to accept every proposal of evidence if, according to its due consideration, it would result in unnecessary and unjustified delay of the proceedings.
During the recent changes of the Patent Act, a new s 81/A was introduced, according to which, upon the request of any of the parties, a so-called simplified invalidation procedure is conducted if a law suit has been filed for patent infringement. In the simplified procedure, the Patent Office sets a 15-day deadline for filing statements and the deadline can be extended only in justified cases and hearings can be conducted only if it is necessary to hear the arguments. This certainly speeds up the procedure, as a whole nonetheless the decisions of the Patent Office are also subject to legal remedies.
The court proceeding in the infringement matter is obviously not bound to the defendant’s request to suspend the action until the final decision in the invalidation matter. Thus, the court might come to the conclusion that the invalidation matter does not affect the outcome of the infringement case. This may happen in cases where it is obvious that the defendant wants to delay the action.
7.1 What remedies are available against a patent infringer (final injunction, delivery up or destruction of infringing goods, publication of the decision, recall-order, monetary remedies, etc)?
The Patent Act provides for various remedies against the infringer. In accordance with s 35, the patent holder according to the circumstances of the case may demand:
In the event of patent infringement the holder of the patent may demand compensation for damages in accordance with the provisions of civil liability.
The definition of infringer also includes those persons who offer the infringing product (in terms of process patents – the product produced directly through the patent) or keep stocks of it, or who deliver or offer the delivery of a thing related to an essential element of the invention with the purpose of the realisation of the invention.
Furthermore, some sanctions – the obligation to give information – can be requested not only against the infringer but also against those third parties who possess the product in question on a commercial scale.
The patent holder is entitled to demand the economic gain achieved by the infringer, as well as a full compensation for the damages resulting from the infringement. The clear difference between the two legal instruments is the required level of proving the losses. When demanding the economic gain, the patent holder must take into account the profit the infringer realised. When calculating the full damages, other elements of the matter must be taken into account and, in this case, the burden of proof lies on the patent holder.
7.2 To the extent it is possible to obtain a final injunction against future infringement, is it effective against the infringer’s suppliers or customers?
A patent holder is entitled to demand, besides the cessation of the patent infringement, prevention of further infringement (Patent Act s 35(1) b.). In the event that the infringer repeatedly commits infringement of the patent with conduct that has been ruled in a binding court decision, the patent holder is entitled to enforce the ruling by means of execution with reference to the ruling that inhibited the given infringement. According to s 35(4) of the Patent Act, not only the infringer but also the person who has rendered services in connection with the infringement can be inhibited from further violations.
7.3 What monetary remedies are available against a patent infringer (reasonable royalty, lost profits, account of profits, or some other basis)? Are punitive damages available? If so, under what conditions?
In the event of patent infringement the holder of the patent may demand compensation for damages in accordance with the provisions of civil liability.
8.1 Is preliminary relief available? If so, what preliminary measures are available (eg preliminary injunction) and under what conditions?
Hungarian law provides various opportunities to demand preliminary relief in patent trials.
With the Act CLXV of 2005, the Hungarian legislator enacted Directive 2004/48/EC (Enforcement Directive) introducing its provisions into the various Acts (among others the Patent Act) on the protection of IP rights, granting a more effective and efficient regime of enforcement. Within this, there is scope to grant a higher level of protection to the IP right holders in what is likely to be a long court action. The Enforcement Directive introduced specific rules on injunctions and other preliminary measures.
Preliminary evidence may be requested before court proceedings and is launched if the patent holder has already substantiated the infringement or threat of infringement to a reasonable extent. Where a party in a patent infringement action has already substantiated its statements to a reasonable extent, upon the request of the party providing proof, the court may require the other party:
The release of the preliminary injunction is subject to the assessment of various preconditions, such as the existence of the patent and the duration of the infringement known by the patent holder.
Apart from the traditionally known elements of the assessment, the latest modification of the Patent Act introduced a new element:
‘When assessing the disadvantages caused by and the advantages resulted from a
preliminary injunction, the obvious and significant harm of the public interest and that
of third party interests shall also be taken into account.’
This new provision has an impact on the pharmaceutical patent processes and, in our opinion, contradicts the Enforcement Directive.
8.2 Is ex parte relief available, where defendant is given no notice at all? If so, under what conditions?
The preliminary injunction, protective measures procedures may also be launched ex parte, provided that the applicant has effectively substantiated his claim that a delay would cause irreparable damage.
8.3 Is plaintiff entitled to ask for an order that defendant’s premises are searched and a description of the infringing goods (and the accounting relating thereto) is made in order to establish proof of infringement (saisie-contrefaçon)? If not, what other mechanisms, if any, are available for seizing and preserving evidence for trial?
Protective measures can be requested on the basis of the Act on Execution and that of the Patent Act.
At a preliminary injunction, the claim or any part thereof can be requested, eg: the seizure of the products, the inhibition of the further production of the product etc. As a protective measure, it is possible to secure the money demand or to seize given objects, eg real estate etc, provided that the plaintiff is able to verify that any subsequent attempt for the recovery of profits made by the infringement or the payment of damages is in jeopardy. It is also possible to request that the infringer gives notification of bank, financial or commercial information and documents, to allow the ordering of protective measures or the provision of security if in exchange – in lieu of demanding the termination of the infringement – the holder of the patent agrees for the infringer to continue the alleged acts of infringement. In this case the court may order the provision of the above said security in the absence of any request on the part of the holder of the patent, provided that the holder of the patent has filed charges for termination of the infringement and it was turned down by the court.
8.4 Can the defendant put the validity of a patent in issue in preliminary injunction proceedings?
The defendant is entitled to set out his argument regarding the preliminary measures and thus an argument questioning the validity of the patent can also be presented. Certainly, the motion for cancellation is also taken into account by the court when assessing the launch of the preliminary measure.
The preliminary injunction can be requested before filing the claim. However, where the claim is not filed within 15 days following the announcement of the preliminary injunction, on the request of the defendant, the preliminary injunction is annulled by the court.
In the preliminary injunction – preliminary evidence cases – the court proceeds on a 15-day deadline. The appeal is also judged within a 15-day deadline. It is the goal of the new regime to apply an extraordinary process. The practice of the past was different: if the decision on the preliminary injunction was appealed, it could take several months to receive a final decision. It had a negative impact on the trial too, since the court did not carry on the process until the preliminary injunction was finally decided.
The preliminary injunction is to be executed irrespective of the appeal.
8.6 To what extent are documents, affidavits, witnesses, and/or (courtappointed or private) experts used in preliminary injunction proceedings?
8.7 What level of proof is required for establishing infringement or invalidity in preliminary injunction proceedings?
Preliminary evidence may be requested before court proceedings and is launched if the patent holder has already substantiated the infringement or threat of infringement to a reasonable extent.
The plaintiff files evidence to support its statements pertaining to the existence of the conditions precedent of the preliminary injunction. According to the Civil Procedure Act, the plaintiff must substantiate that the conditions precedent to the launching of a preliminary measure prevail. The ‘substantiating’ is a lower level of certainty compared to that of proving. The conditions precedent are summarised in the Civil Procedure Act as: to avert damages; to maintain the status granting ground for the action; to protect the plaintiff’s specially justified rights. If any of the conditions precedent can be established and the test of assessing advantage-disadvantage is positive, the preliminary injunction must be launched. Among the conditions precedent, the Patent Act puts a special emphasis on the existing patent protection and regards the plaintiff’s specially justified rights as proven. When applying the advantage-disadvantage test, the adopted new regulation also introduced new elements (public interests), as set forth above.
As set out earlier above in the preliminary injunction – preliminary evidence cases – the court proceeds on a 15-day deadline. The appeal is also judged within a 15-day deadline. It is the goal of the new regime to apply an extraordinary process. The preliminary injunction is to be executed irrespective of the appeal. In the practice, these deadlines are very difficult to keep.
8.9 Where a preliminary injunction is granted, is it necessary to start main proceedings to confirm the preliminary injunction?
The preliminary injunction is governed by the Civil Procedural Code and the Patent Act. As a result of the new enforcement rules, a preliminary injunction can be requested when filing the claim or prior to that in a separate claim. In the event that a preliminary injunction is released and the applicant does not start an action within 15 days following the disclosure of the preliminary injunction, the court, on the request of the opponent party, shall annul the preliminary injunction.
9.1 What avenues of appeal are available for a defeated party in main proceedings or preliminary injunction proceedings? Under what conditions?
The patent-invention infringement procedure falls under the exclusive jurisdiction of the Budapest Metropolitan Court. Thus, in infringement matters, this court proceeds with preliminary injunction matters too. Against the decisions of the court, the defeated party is entitled to file an appeal within 15 days of receiving the writ or ruling. The second instance court is the Municipality Regional Court. In the appeal phase, new evidence can only be filed if that evidence had not been available at first instance or the failure to refer to it had not been the responsibility of the party in question.
The decision of the Regional Court is binding and not subject to appeal. After the recent changes, the appeal hearing is set for some months after filing the appeal. In preliminary injunction matters, the court shall proceed extraordinary. The defeated party is entitled to file a bill of review against the binding ruling or writ with the Municipality Court. The bill of review is ruled by the Supreme Court: however, this is an extraordinary legal remedy and the decision in question is reviewed within the framework of legality; thus facts are not reviewed as widely as in the appeal phase; new facts and evidence cannot be presented. If new facts come to the knowledge of the defeated party, it is possible to file a motion for a new trial where the new facts and evidence can be judged.
9.2 How long do appeal proceedings typically last?
Appeals take several months. However, the appeal can result in a new first instance action which, of course, will delay the proceeding as a whole.
10. LITIGATION COSTS
10.1 What level of cost should one expect to incur to take a case through to a first instance decision, preliminary injunction proceedings and/or appeal proceedings?
Litigation costs consist of the following elements: duties, expert’s costs and attorney fees. The duties and expert’s fees are laid down in law and/or prescribed by chambers of the various professionals who act as experts. The attorney fees are determined by the agreement of the attorney and the client, which, apart from exceptional cases, is not questioned by the Court. The duty is 6% of the litigation value. Where the litigation value cannot be established (as there is no certain damage claim), the value is at first instance HUF 350,000 and HUF 400,000 in second instance.
The expert’s fees must be deposited by the party which suggested the expert’s review. In general, a fee of HUF 300–600,000 can be expected; certainly, it can be more or less depending on the complexity of the matter.
The attorney fees are subject to agreement of the parties. Where the fee is accepted by the other party or proved by filing an agreement on the fee and if the fee is not excessive, the court orders the payment of it in the ruling.
10.2 Are costs recoverable from the losing party?
The litigation costs are recoverable.
11. FORTHCOMING LEGISLATION
11.1 What are the important developing and emerging trends in your country’s patent law?
11.2 To the extent it relates to patent enforcement, please outline any major patent legislation in the pipeline.
As Hungary has already enacted the most relevant international legal norms (including the recent introduction of the enforcement rules), no further changes can be expected.
12.1 Please identify any useful works of reference relating to patent law and patent litigation in your country including useful websites.
www.hpo.hu (Hungarian Patent Office)
www.mie.org.hu (Hungarian Association for the Protection of Industrial Property and Copyright)
www.sbgk.hu (SBG&K Patent and Law Offices)
