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Hungary

Case law on Trade Secrets in Hungary

Relevant topics related to the 2016 Trade Secret Directive (EU 2016/943)

Table of contents
  1. 1. Requirement to undertake reasonable steps to keep the information secret - art. 2(1)(c)
  2. 2. Reverse Engineering - e.g. art. 3(1)(b)
  3. 3. Infringing products - e.g. art. 2(4) and 4(5)
  4. 4. The (IP-like) catalogue of remedies - e.g. art. 10 and 12
  5. 5. Exceptions / allowed uses (and their relationship to contractual secrecy provisions) - art. 1 and 5
  6. 6. Secrecy in court proceedings (“confidentiality club”) - art. 9
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1. Requirement to undertake reasonable steps to keep the information secret - art. 2(1)(c)

PJD2022. 20. (Pf. 20.380/2021/8.)

The court held that the employer undertook reasonable steps to keep the information secret by

  • incorporating clauses in the employees’ contracts obliging them to keep the employer’s trade secrets both during and after the employment relationship and not to disclose them to third parties, and to return to the employer, on the last day of the employment relationship, all assets, data, files and documents relating to the employer’s business activities;
  • obliging the employees in their termination agreement to uphold their confidentiality obligations;
  • having in force a detailed privacy notice regulating the use of company IT assets, prohibiting employees from saving work-related documents on their personal devices;
  • sending an email reminding all employees that the company email account could not be used for private purposes and that the employer was entitled to check correspondence on work email addresses.

Pf. 20.228/2021/8.

The court held that the employer undertook reasonable steps to keep the information secret by

  • making IT equipment related investments, which served cybersecurity purposes;
  • establishing an IT policy applicable to all employees, setting out the requirements, expectations and prohibitions relating to the use of the IT system to protect the employer’s trade secrets;
  • organising an internal mail system and a virtual private network (VPN) under its own domain, to which all computers of its employees were connected.

Mf. 31.343/2020/7.

The court of appeal held that the judgment of the court of first instance was unlawful. The court of first instance incorrectly held that not terminating the employee’s access to files containing trade secrets, at the same time of terminating the employee’s employment relationship and releasing the employee’s obligation to perform work, meant that the employer did not undertake the reasonable steps to keep the information secret.

Pf. 20.785/2021/8.

The court held that the employer did not undertake reasonable steps to keep the information secret by

  • merely incorporating a general confidentiality provision in the employment contract of the employee, quoting the Labour Code;
  • merely specifying the knowledge to be protected in general terms;
  • not specifying in an identifiable manner the facts, data and solutions which are the subject of both trade secrets and know-how, and to regulate the conduct which the party is obliged to refrain from while in possession of the secret.

2. Reverse Engineering - e.g. art. 3(1)(b)

No relevant national case law yet.

3. Infringing products - e.g. art. 2(4) and 4(5)

No relevant national case law yet.

4. The (IP-like) catalogue of remedies - e.g. art. 10 and 12

Gf. 20.033/2022/7.

The cessation of, or the prohibition of the use or disclosure of the trade secret; or the provision of information concerning the persons involved in the production, distribution or supply of the infringing goods and the business relationships established for the infringing use may also be ordered against other persons than the infringer, even if this third person is not involved in the production, offering, placing on the market or use of infringing goods, or the importation, export or storage of infringing goods for those purposes. However, in this case the infringer and the third party must be sued together, as the above remedies may only be based on a judicial decision taken on the merits of the case.

P. 21.382/2019/67.

As per the general rules of the Code on Civil Procedure, a claim for declaring the existence or non-existence of a right or legal relationship may be filed only if there is no legal ground for imposing an obligation. However, as per the special rules, the cessation of, or the prohibition of the use or disclosure of the trade secret may be sought, irrespective of whether the defendant may also be ordered to pay damages.

5. Exceptions / allowed uses (and their relationship to contractual secrecy provisions) - art. 1 and 5

Pf. 20.010/2021/8.

As an exception from trade secret protection, the acquisition, use or disclosure of a trade secret required or allowed by legal act shall not qualify as infringement of the right in the trade secret. Under the Freedom on Information Act, data related to the

  • use of the central budget,
  • budget of local governments, and European Union funds,
  • benefits and allowances involving the budget,
  • the management, possession, use, utilisation and the disposal and encumbering of central and local government assets, and
  • the acquisition of any right in connection with such assets

does not qualify as trade secrets, rather as data accessible on public interest grounds. Access to such data, however, shall not cause disproportionate harm with respect to the performance of business activities, provided that this does not prevent the possibility of access to data accessible on public interest grounds.

6. Secrecy in court proceedings (“confidentiality club”) - art. 9

BDT2020. 4268. (Gpkf.II.25.694/2019/2)

The right to a trade secret cannot be interpreted broadly, a member or manager of a company keeping a trade secret cannot be considered to be a trade secret holder, even indirectly.

PJD2022. 20. (Pf. 20.380/2021/8.)

Even after the restriction of access by the parties and their representatives to any document containing trade secrets or alleged trade secrets that are the subject of the action, the documents are part of the litigation documents, and the parties may study the documents, take notes and make statements in their regard.