International Patent Litigation in Hungary

The patent holder may bring proceedings for patent infringement. Also, an applicant whose invention has been granted temporary protection may sue for patent infringement. However, the proceedings will be suspended until a final decision has been made with respect to the registration of the patent.

Any licensee of the patent may ask the patent holder to take the necessary measures to prevent the infringement. Should the proprietor fail to take such measures within 30 days of the request, the registered licensee may bring proceedings for patent infringement under its own name.

Patent infringement proceedings may be brought against any number of defendants if:

• the proceedings relate to common rights or obligations of those parties that can only be decided together or if the decision would otherwise affect all defendants even without their participation in the proceedings;
• the claims originate from the same legal relationship; or
• if the claims originate from the same legal and factual basis and the same court has jurisdiction with respect to each of the defendants.

The defendants may be joined in first instance proceedings.

Any third party may join the patent infringement proceedings who / which has a legal interest in the outcome of the proceedings, as a joiner (i.e. not as a party to the original proceeding). The joiner may perform all actions that the party it joined is entitled to, except for settlement, approval of claims and waiver of rights. However, the actions of such joiner shall be effective to the extent that the party it joined omits to perform that action and to the extent that the party does not perform a contrary action.

The Hungarian Patent Act does not set any specific time limit for bringing an action for patent infringement. The general limitation period of five years is not applicable to the “main claims” in patent infringement cases (e.g.a claim requesting the termination of infringement, seizure of goods or a declaration of non-infringement). Nevertheless, “complementary claims” (e.g. claims for damages) must be made within the general limitation period of five years commencing from the date the infringing activities terminated.

It is not a requirement, but an opportunity to simultaneously assert claims that derive from the same factual and legal basis or from legal relations related to each other on a factual and legal basis.

As a general rule, the Metropolitan Court of Budapest has exclusive jurisdiction in patent infringement proceedings, while the Hungarian Intellectual Property Office has jurisdiction for invalidity proceedings. However, if no invalidity proceedings have been initiated before the Hungarian Intellectual Property Office, the defendant of the patent infringement court proceedings may submit a counterclaim for the termination of the allegedly infringed patent, upon which the court may decide on the patent infringement and invalidity of the patent in a single proceeding and in an expedited procedure. The court shall consult a special expert on invalidity questions, that being primarily the Hungarian Intellectual Property Office. The timeline for providing the expert opinion is limited – and strictly enforced – to 30 days.

Upon the request of any of the parties, the invalidity proceedings may be conducted under a simplified procedure if infringement proceedings have already been initiated at the court.

Hungary has signed but has not yet ratified the UPC Agreement.

Under the Hungarian Patent Act the patent holder may ask the court to confirm that patent infringement has occurred. A party may also apply for “declaration of non-infringement”. Any person who is afraid of being sued for patent infringement may request the Hungarian Intellectual Property Office to declare that the product or process exploited by it does not infringe a certain patent. If the Hungarian Intellectual Property Office declares that the use does not infringe a given patent, it is not possible in the future to initiate an infringement lawsuit based on those facts.

Usually, a first hearing is scheduled within four to six months from submitting the statement of claim. First instance proceedings (consisting of more than one hearing) are usually finished in one and a half to  two years.

Depending on the complexity of the case, trials last approximately two to three years.

The Metropolitan Court (having exclusive jurisdiction in infringement cases) has a panel of three professional judges, two of which will have a higher degree of technical / scientific or equivalent professional qualification. In second instance, the court is composed of three professional judges.

The proceedings may be suspended, when justified, until the final conclusion of the opposition proceedings at the EPO.

Yes. Any person may request the nullification of a patent on the grounds of:

• the object of the patent being ineligible for the requirements to be under patent protection;
• the description of the invention not being in compliance with the method and detailedness prescribed by law;
• the object of the patent being broader than the description indicated in the application; or
• the patent had not been granted to the person being entitled to it under law.

Hungarian legislation does not differentiate in terms of actions for FRAND. As to compulsory licenses, if within four years from the date of filing the patent application or within three years from the granting of the patent, whichever period expires last, the patentee has not exploited the invention in the territory of the country to satisfy the domestic demand or if it has not undertaken serious preparations or has not granted a license for such purpose, a compulsory license shall be granted to the applicant for the license.

Furthermore, upon request, a compulsory license shall be granted if the patented invention cannot be exploited without infringing another patent (the “dominant patent”) and to the extent necessary for the exploitation of the dominant patent, to the holder of the dependent patent, provided that the invention claimed in the dependent patent involves an important technical advance of considerable economic significance in relation to the invention claimed in the dominant patent, unless the patentee justifies the lack of exploitation.

Citing FRAND terms in patent infringement cases is not regulated in Hungary. Parties have the opportunity to invoke such terms but citing FRAND terms alone in patent infringement cases may not be eligible for a successful defence (i.e. other evidence shall be provided regarding the lawfulness of the utilisation of the patent). There is no substantial, available Hungarian court practice regarding FRAND in patent litigation cases.

Under Hungarian law the expert is not considered to be a “witness” as such. If special expertise is required in the proceedings in relation to some fact or circumstance which the court is lacking, the court will appoint an expert. When asking the court to appoint an expert, the party may indicate their preference. However, it is at the court’s discretion to decide which expert to appoint. Upon request of any of the parties the court may appoint another expert replacing the one originally appointed if it becomes necessary. The court may order the expert to present its report in writing and may also summon the expert to the hearing to present the report and to answer the parties’ questions. The parties may also appoint a “private expert” to support their statements, but only upon the approval of the court to appoint a private expert. The evidentiary value of the opinion of such private experts is equal to that of an expert appointed by the court. In case the party does not submit an application for the appointment of a private expert or the court denies granting approval to use the opinion of the private expert, the opinion prepared by private experts will not qualify as an expert opinion: the court will only take it into consideration as representing the views of the instructing party.

Under Hungarian law, as a general rule, the burden of proof lies with the claimant, and so it is the patent holder who must submit evidence to prove that the infringement has occurred. The court is not actively involved in determining what kind of documents shall be submitted. However, the court may order the opposing party – at the request of the claimant party – to present documents in its possession, which it is obliged to present under the rules of civil law, especially those documents which:

• have been prepared in its interest;
• verify a legal relationship that it is engaged in; or
• relate to a negotiation on such legal relationship.

Upon order of the court, the potential infringer may be obliged to provide information regarding the identity of the persons involved in the production and distribution of the infringing goods or the provision of infringing services and of their distribution channels.

Under Hungarian law there is a procedure called “preliminary taking of evidence” which provides parties with a means of obtaining evidence before proceedings have commenced (this is not the same as the “preliminary discovery” concept under common law). In patent infringement proceedings, such proceedings may be conducted if the patent holder proves the infringement or the threat of infringement to a reasonable extent. The application for preliminary taking of evidence must be submitted to the Metropolitan Court. If the patent holder fails to bring action for patent infringement within 15 days from filing such application, the court – upon request of the other party - will revoke its decision.

Seizure of evidence / documents can also be requested in preliminary injunction proceedings and at the main trial.

An appeal from the Metropolitan Court lies in the Court of Appeal. A further application for review may then be made to the Supreme Court in certain cases.

An appeal may be brought against the first instance judgment on any ground. The first instance proceedings will be repeated if:

• the court of first instance had not been properly formed or if a judge (who should have been disqualified by law) took part in the judgment; or
• the hearing has to be repeated or completed due to a material infringement of the main procedural rules by the court of first instance which has affected the court’s decision in the case; or
• the decision of the court of first instance contains formal deficiencies of such significance which make the material review of the decision impossible. On appeal the court will only decide the merits of the case (without repeating the proceedings), and the first instance judgment will either be maintained or partially /  fully altered.

Based on our experience first instance proceedings last one and a half to two years and the appeal proceedings take approximately one year.

If one of the parties submits an appeal, the decision of the court of first instance shall not be effective until the appellant court decides on the appeal.

This is hard to predict, as legal costs may vary depending on various factors (the number of hearings, necessity of experts, the amount of duty payable being proportionate to the amount of the damages claimed). As a very rough estimate first instance proceedings may cost thirty five thousand euros (35,000 EUR) to fifty thousand euros  (50,000 EUR).

Lawyers’ costs are only reimbursed in part from the other party even when a party is successful.

It is difficult to predict the costs of an appeal as they will vary significantly depending on various factors. Overall, the legal costs of second instance proceedings are 50% of those spent on first instance. As a very rough estimate the appeal proceedings will cost seventeen thousand five hundred euros (17,500 EUR) to twenty five thousand euros (25,000 EUR).

The party winning the patent infringement case may request the opposing party to reimburse all costs incurred by the winning party over the course of the litigation proceedings, except for lawyers’ costs, which may only be reimbursed partly (as indicated above).

Arbitration may be used if this is agreed in a relevant contract between the (potential) parties. Another option of alternative dispute resolution under Hungarian law is mediation.

The Metropolitan Court has exclusive jurisdiction in patent infringement cases. Therefore, the arbitration court may not act in patent infringement cases (although note that other patent disputes may be dealt with by arbitration).

Before adjourning the initial stage of litigation, the court may attempt to mediate between the parties in order for them to reach a settlement, if the court deems that such efforts may be successful and informs the parties of the possibility of mediation and the related procedural rules.

The court may order:

• a declaration of infringement;
• an injunction to stop the infringing activities or the termination of the threat of infringement;
• that the defendant provides information on the parties in the manufacturing / supply chain;
• the infringer to make amends for its action and,  if necessary, that such amends should be given publicity at the expense of the infringer;
• restitution of economic gains from the infringement;
• seizure / surrender or destruction of infringing goods, material, equipment;
• that the assets, materials and products seized or recalled and withdrawn from commercial circulation be deprived of their infringing nature (under justified circumstances the court may also order, instead of destruction, sale of the seized assets and materials);
• damages.

All of the above measures of the court may be taken upon request of the party. None of these measures or any injunctions are automatic.

There is no official method for the calculation of damages applied by the courts. All cases are evaluated on a caseby-case basis. The Hungarian court practice is fairly immature in this respect and there is a tendency that the courts almost always rely on expert opinions in determining the amount of the damages payable. Based on our practice, the courts tend to take into consideration the value of the original (non-infringed) products as the basis for the calculation of lost profits on sales.

Under Hungarian law, the amount of the damages suffered must be proven by the party that requests the damages. The court does not carry out an enquiry, but it will order the payment of damages only if it has sufficient grounds to establish that the party has in fact suffered loss as a result of the infringement. We note that proving that the infringement resulted in damages is the hardest part of a patent infringement lawsuit. For this purpose, upon order of the court, the potential infringer may be obliged to provide information regarding the circumstances of the infringement.

In certain cases – which may be rather rare in patent infringement cases – when the occurrence of infringement and damages is established, the court may make an interim decision, after which the proceedings progress only for the purpose of establishing the exact amount  of damages.

No.

Yes, the removal of infringing products is one of the remedies explicitly listed in the Patent Act that may be requested by the party entitled to the patent. There is no specific limitation period for this claim.

Yes. The court, upon request, may order the preliminary injunction, if, without the preliminary injunction:

• the later restoration of the status quo would be impossible;
• the applicant could not exercise its rights later;
• the evasion of the disadvantage directly threatening the applicant would be impossible; or
•  for the special protection of the applicant’s rights.

In granting a preliminary injunction, the court shall consider if:

• it is deemed necessary to prevent any imminent threat of damage or to preserve the status quo giving rise to the dispute or with a view to underlying the requirement for the special protection of the applicant’s rights; and
• where the advantage to be gained outweighs  the potential disadvantages of the measure.

In case of patent infringement lawsuits, the condition related to the special protection of the applicant’s rights shall be considered fulfilled if the applicant is able to prove that the patent is registered / applied for and that it is the holder or the licensed user of the patent and is entitled to file for court proceedings due to infringement in its own name. This assumption related to the special protection shall not apply after six months from the commencement of the infringement or if 60 days have passed since the patent holder gained knowledge of the infringement and of the person of the infringer.

No, the other party must be informed of the application and is given the opportunity to express its opinion. However, in extreme urgency the injunction may be ordered without allowing / requiring the other party to express its opinion but in such cases the party will still be notified.

Under Section 104 of the Hungarian Civil Procedure Code, the court shall decide on the application for preliminary injunction within eight days. If the court grants the preliminary injunction and the defendant appeals against the decision, the court shall make its final decision on the preliminary injunction (either upholding or terminating it) within 15 days of the defendant’s application. However, based on our experience, these deadlines are not kept and obtaining preliminary injunctions can take several months.

Yes, is it possible to appeal against an injunction and the appeal does not suspend the effect of the injunction.

The court may order that the party requesting a preliminary injunction shall provide a security upon the request of the allegedly infringing party if this party evidences that the requested injunction may cause a disadvantage to  it which would establish a claim for damages or compensation for infringement on personal rights.

It should be mentioned that the patent holder may request the court to require the alleged infringer to deposit a certain amount, if in exchange the patent holder allows the alleged infringing activity to be continued. In cases where the patent holder requests the court to order the termination of the infringing activity but the court did not comply with such request, the court is entitled to order the deposit in the absence of the patent holder’s request to do so.

Yes, the order regarding the preliminary injunction is enforceable without the need to carry out any further proceedings on the merits. It will remain in effect until the decision in the main trial of the first instance court.

Yes. Cross-border injunctions are available.

If the allegedly infringing party proves that before the commencement of the patent litigation proceedings against it, it has initiated a termination procedure in respect of the same patent before the Hungarian Intellectual Property Office, then the patent infringement litigation proceedings shall be suspended until the final decision is made in the annulment procedure.

However, as detailed above, the bifurcation rules have been softened with effect as of 1 January 2022, allowing the patent infringement claim and the counterclaim for the termination of the allegedly infringed patent to be decided on in single court proceedings, provided that no termination proceedings were initiated earlier before the Hungarian Intellectual Property Office.