Hungary, in line with most other countries, offers protection to intellectual property, although in some cases certain steps need to be taken to benefit from that protection. Hungary is a signatory to the most of international Intellectual Property conventions and is a member of WIPO. Following the re-regulation of Hungarian Intellectual Property law in the '90s and the continuous legislative developments, it is in compliance with the latest developments, in particular the relevant EU requirements.
Patents
Protection of innovations though patents goes back to 1895 in Hungary. Following discussions between Hungary and the United States on intellectual property and taking into consideration the requirements of harmonization with EC law and the TRIPS Convention, Act XXXIII of 1995 on the Protection of Inventions by Patents was passed and came into force on 1 January 1996. The Patent Act has already been amended several times since its enactment. Patent protection is offered in relation to inventions that are new and susceptible of industrial application, including biotechnological inventions, but excluding, per definition, discoveries, theories, mathematical methods etc., and compared to the U.S. viewpoint, software and business models. Any application for a patent must be filed with the Hungarian Patent Office. If the patent is granted then the protection is for twenty years from the filing date. As of Hungary's EU accession, a supplementary protection certificate (i.e. extension of time of protection with a maximum of five years) will be available in respect of medicinal products and plant protection products according to the relevant EC regulations and subject to the transitional arrangements stipulated in the Accession Treaty, the effect of which can be summarized as a ten years delay in the protection of the supplementary protection certificates. Registered patents qualify as pecuniary rights, thus they may be transferred, charged etc. The granting of a patent gives protection to the holder against infringement. However, as of Hungary's accession to the EU, importation of goods lawfully placed on the market within the EEA will no longer constitute an infringement pursuant to the community exhaustion rule. The rules on customs control measures protecting intellectual property will also be amended to reflect the introduction of the community exhaustion rule. Patent infringement matters are exclusively dealt with by the Metropolitan Court and special remedies are available, including the granting of interim junctions. The Hungarian Patent Office acts through a tribunal of three members in proceedings of annulment, of negative findings, and in the course of the interpretation of a patent description. The courts may overturn a decision of the Hungarian Patent Office. In all patent matters under the jurisdiction of the Hungarian Patent Office, a foreign person must commission a patent attorney or a lawyer resident in Hungary to represent him, however, this rule will not apply to EU citizens and EU resident legal persons following Hungary's EU accession. Special rules apply to patented inventions created within the framework of employment. Most importantly, the employer can acquire the patent or a license to use the patent (depending on exact circumstances), but must pay the employee an inventor's fee and a share of certain proceeds from the use of the patent. Besides the protection of inventions through patents, Hungarian law also offers protection to new varieties of plants, topographies and microorganisms. Hungary is a signatory to, inter alia, the Paris Convention, the Patent Cooperation Treaty, the European Patent Convention (Münich Convention) and the TRIPS Convention, further, the Patent Act is harmonised with the Strasbourg Convention concerning the International Patent Classification and the rules of the Luxemburg Treaty (that has never entered into force, but is widely applied). The infringement of a patent may also qualify as a criminal offence.
Trade Marks and Geographical Indications
Protection of trademarks dates back to 1858 in Hungary. Nowadays the principal source of protection for trademarks is Act XI of 1997 on the Protection of Trademarks and Geographical Indications that has been already amended several times, last time in 2003, which amendment has introduced, effective as of the EU accession, the objection system, the community exhaustion rule and the registration of community trademarks through the Hungarian Patent Office. The basic principle is that trademarks must be registered to enjoy protection although this principle is mitigated somewhat by the position regarding wellknown marks and exceptions to the "first-to-file" rule. As of the EU accession, well-known marks will also include community trademarks that are well-known in a considerable part of the EU. The protection of a trademark lasts for ten years, and is renewable for further ten-year periods without limitation. A trademark represents pecuniary rights, and thus it is transferable, it can be charged, etc. Pursuant to the objection system, effective as of Hungary's accession to the EU, the Hungarian Patent Office will not take into account identity with or similarity to earlier registered trademarks as a ground for refusal, but only the so-called absolute grounds for refusal and therefore it will be the trademark holder's own responsibility to monitor new trademark filings and raise an objection against trademark filings infringing its trademark(s). Therefore, trademark holders are well advised to review their trademark policies. We note that the Hungarian Patent Office will offer certain payable services in this respect upon request of the trademark holders. The deadline to raise an objection will be three months from the publication of the trademark filing. The holder of a trademark may exclusively use the trademark on those goods for which it is registered and may grant a license to others for the use of the mark. However, as of the EU accession, the community exhaustion rule will also apply to trademarks, and thus the holder of a trademark will not be able to object to importation of goods bearing its trademark once these goods have been lawfully placed on the market within the EEA. The registration of a trademark gives protection to the holder against infringement. Trademark infringement matters are exclusively dealt with by the Metropolitan Court and special remedies are available, including the granting of interim junctions. The Hungarian Patent Office deals with trademark disputes concerning trademark registration, renewal, cancellation, expiration etc. in a panel of three members, and if necessary or requested by the parties, it holds hearings. The Hungarian Patent Office's decisions can be challenged before the courts. The latest amendment to the Trademark Act has introduced provisions relating to community trademarks necessary to give effect to the relevant EC regulations. As of Hungary's EU accession, it will be possible to file an application for a community trademark also through the Hungarian Patent Office. While the new provisions of the Trademark Act are of implementing nature only, the Act of Accession contains some very important provisions in relation to existing community trademarks that, upon accession, will automatically extend to Hungary. Pursuant to these provisions, the holder of a Hungarian trademark bona fidei registered prior to the accession may, within certain time limits, seek to prohibit the use in Hungary of a community trademark infringing its earlier registered Hungarian trademark, and for this purpose objections can already be made in respect of applications for community trademarks filed in the half year preceding the accession date. Therefore, trademark holders are well advised to check whether are there any community trademarks identical or similar to their Hungarian trademarks. It is important to note that the holder of a community trademark will not be able to bring an action against the use of an earlier registered Hungarian trademark, even if the above time units have lapsed without an objection against such community trademark by the holder of the earlier Hungarian trademark. Foreign persons are required to authorise a patent attorney or lawyer resident in Hungary to represent them in all trademark matters falling under the competence of the Hungarian Patent Office, however, this rule will not apply to EU citizens and EU resident legal persons following Hungary's EU accession. The protection of geographical indications and geographical designations is similar to the protection of trademarks, except for certain additional requirements relating to the goods concerned, and except that in respect of these the objection system will not be introduced, and thus identity with or similarity to earlier registrations will still be examined ex officio. As of Hungary's accession to the EU, Community designations of origin and geographical indications of agricultural products and foodstuffs will also be protected and available in Hungary. Hungary is a signatory to the Paris Convention, the WIPO Trademark Law Treaty, the Madrid Agreement and the Madrid Protocol concerning the International Registration of Marks , the Nice Classification Treaty, the Luxemburg Treaty concerning geographical indications and other trademark related conventions. The infringement of a trademark may also qualify as a criminal offence.
Copyright
Copyright protection has age-long traditions in Hungary, nowadays Copyright and related rights are protected principally by the Civil Code and Act LXXVI of 1999 on Copyright. Copyright subsists in individual and original works, thus it more effectively protects the form of the expression than its contents. However, copyright protection may extend to original and specific characters appearing in the work protected by copyright.. Copyright protection is due to the creator of a work, but it is also due to a rewriter, adapter, or translator of a work without injury to the rights due to the author of the original work. As a general rule, the author of the original work must be cited in all subsequent works. In addition to the traditional subjects of copyright protection, such as literary works, public speeches, plays, musicals, ballets, photographic works, cartographic works, architectural works and plans, designs, applied art works, radio and television plays, etc., copyright protection also extends to software programs and documentation as well. The protection of rights related to copyright extends to artists' performances, rights of music publishers, film producers, radio and television broadcasters and to databases. Notably, the Civil Code also protects works that are not eligible for copyright protection, for instance, due to the lack of required level of originality (e.g. folklore driven works). Importantly, there is no need to make a filing to gain copyright protection for a work. Rights conferred to copyright are divided into moral rights and pecuniary rights, where the first cannot be transferred or waived, whilst pecuniary rights can be, with certain exceptions transferred. Based on the moral rights, the author can protect the integrity of their work and their authorship, while based on the pecuniary rights, the author can control the exploitation of their works, as generally each and every use of the work necessitates the author's license. This is, however, somewhat mitigated by limitations and exceptions relating to certain uses (i.e. "free uses"), and by common licensing of certain uses in connection with certain types of works. Since the latest amendments to the Copyright Act, that will enter into force on Hungary's EU accession, in certain cases collective licensing will become optional only, thus the authors will be able to, subject to certain criteria, opt-out collective licensing and individually license also these uses. Collective licensing is an important issue for any undertaking making any use of already published copyright protected works (e.g. hotels, broadcasters, etc.). The Copyright Act comprises mandatory and non-mandatory rules concerning license agreements, including software license agreements. Copyright gives protection to the author, or if certain criteria are met, the licensed user against infringement. Copyright infringement cases belong to the competency of county courts. An infringement action can also be brought against persons assisting in the infringement and against the by-passing of technical measures protecting copyright. Unless otherwise agreed, the delivery of work to the author's employer means that the pecuniary rights are transferred to the employer as successor in title to the author, if the creation of the work falls within the scope of the author's employment. Also, the delivery of a work to the author's employer is considered as an act of consent to the disclosure of the work to the public. The author is entitled to a royalty if the employer licenses to another person the work or transfers the pecuniary rights relating to the work.The author's right to receive royalties if the employer licenses to another person the work does not apply to software, as the specific nature of software development projects has been taken into account. It is important to note that employment does not comprise other popular forms of contracts of work (e.g. mandate etc.), thus in these cases specific provisions should be incorporated into the respective contracts. Copyright lasts for the lifetime of the author and for seventy years from the first day of the year following the death of the author. The time of protection is shorter in case of rights related to copyright, namely fifty years in general and fifteen years in respect of databases. As mentioned, protection of rights related to copyright has been extended to databases, which are defined as systematic collections of individual works or data. The protection of a database is due to its creator ie. the person or entity who has initiated, organised and invested in the compilation of the database. The protection is granted, however only to Hungarian and EU citizens and persons having their place of residence or seat in Hungary or in the EU (in the latter case a real connection to the EU is necessary too). As for other types of work, alicense from the author of a database is required for the reproduction or use of the database, too. Hungary is a member of the Berne Copyright Convention, the WCT, the Universal Copyright Convention, the Montevideo Treaty and the Geneva Treaty concerning the Protection of Audio Recordings. Copyright infringement of may also qualify as a criminal offence.
Registered designs
With effect from 1 January 2002 Hungarian rules relating to designs have been reregulated, and the latest amendments to Act No. XLVIII on registered designs have introduced the rules necessary to ensure the protection of community designs and to enable application for community designs through the Hungarian Patent Office. Under the Registered Designs Act a design is defined as the appearance of the whole or part of a product resulting from the features of, in particular, the lines, contours, colors, shape, texture and/or materials of the product itself and/or its ornamentation. A design is protectable if it is new and original (has an individual character). Upon registration with the Hungarian Patent Office a design is protected by the design right for a period of five years from the date of filing of the application. The rightholder may have the term of protection renewed for a maximum of four periods of five years each, up to a total term of twenty five years from the date of the filing. The design right confers an exclusive right to prevent the making, offering, putting on the market, importing, exporting or using as a product or stocking such a product. As of the date of accession the above exclusive right will be subject to the community exhaustion rule and thus the holder will not be able to object to the marketing of a product once it has been lawfully placed on the market within the EEA. There are special rules relating to designs created by employees similar to the rules dealt with above concerning service inventions. The infringement remedies available in case of infringement of a registered design are similar to the remedies available in case of patent infringement, dealt with above. Hungary is a signatory to the Hague convention, thus the extension of protection of foreign registered designs to Hungary, and the extension of Hungarian registered designs to foreign countries is also possible and can be handled through the Hungarian Patent Office. Similarly to other intellectual property rights, registered designs may also be protected by criminal law.
Industrial designs
Act No. XXXVIII of 1991 on the protection of industrial designs offers protection to industrial designs, defined as the structure and construction of a product, if such industrial design is new, innovative and susceptible of industrial application. The requirements of novelty and innovation are similar to those applied to patents, however, a lesser degree of innovation is also eligible. It is important to emphasise that industrial designs protect the structure and construction of a product, but not its appearance (this is the difference compared to registered designs). The protection last for ten years and it cannot be renewed. Special rules apply to industrial designs developed within the framework of employment that are similar to rules of service inventions. The holder of the industrial design has the exclusive right to exploit the industrial design and similar infringement remedies are available as those available to patent holders. Industrial designs may also be protected by criminal law.
"Passing off"
(unfair competition)
Under the Competition Act, it is prohibited to manufacture, distribute or advertise goods or services having the characteristics (such as appearance, packaging, markings (including the marking of origin) or designation) with which the goods or services of a competitor are normally associated or to otherwise use names, designations or makings which are associated with a competitor or its products or services, unless the competitor has given its consent thereto.. The above provision gives considerable protection in cases where other forms of protection are not available, e.g. in case of unregistered trademarks or when a trademark is registered, but cannot be enforced for any reason. However, to be eligible for protection, it is necessary to show that the goods (or services) being infringed have been placed on the market prior to the infringing goods, and are well recognised in the market, further that the infringing goods (or services) are sufficiently similar to cause confusion for the average consumer. "Passing-off" cases are dealt with by the county courts and the available remedies are similar to those available in case of infringement of other forms of intellectual property (e.g. trademark), however it is more difficult to obtain an interim junction. "Passing of" may also qualify as a criminal offence.
E-commerce
Act CVIII of 2001 on E-Commerce took force on 23 January 2002. The Act has been already amended at the end of 2003 to further limit the liability of service providers acting as intermediaries and to promote e-commerce by increasing transparency and reliability of such services through introduction of more effective sanctions and introduction of electronic alternative dispute resolution methods. The E-Commerce Act contains both general and specific consumer protection measures dealing with information to be provided to consumers, data protection issues etc. and rules relating to the specific functioning of electronic commerce, such as the conclusion of contracts via the Internet, the sending of spams, the liabilities of service providers and intermediary service providers and the objection system available in case of web content infringing one's rights.
Electronic signatures
Act XXXV of 2001 on electronic signatures came into force on 1 September 2001 and its purpose was to promote e-commerce by regulating electronic signatures in line with the provisions of the EU Directive on electronic signatures. Subject to certain exceptions, acceptance of an electronic signature or electronic document cannot be refused solely on the basis that it is in electronic form. Furthermore, except in certain cases, if a particular document is required to be in writing by law, then this requirement is deemed to be met by incorporation into an electronic document provided that such document has been signed with a so-called "advanced electronic signature" (ie. A signature uniquely linked to the sender which is capable of identifying the signatory). The Act also introduces the concept of a "qualified electronic signature" which is to be certified by third party intermediaries authorised to provide such services. Unfortunately, the use of electronic signatures has not become a widespread practice yet, but the necessary implementation rules are already in place, and the first service providers has already launched their service, thus advanced electronic signatures are available to those interested in their use.
For further information please contact Gabriella Ormai.
