Patent Litigation 2024 Comparisons

The intellectual property rights available to protect inventions in Hungary are patents, utility models and know-how. These forms of protection are all based on statutory law – Act XXXIII of 1995 (Patent Act), Act XXXVIII of 1991 (Utility Model Act) and Act LIV of 2018 (Act on Trade Secrets and Know-how) – but Hungarian and European case law are also duly considered by the authorities.

The grant procedure for patents and utility models requires an application to be filed with the Hungarian Intellectual Property Office (HIPO). A formal examination is carried out and, if all requirements are met, a substantive examination of the requirements of novelty, inventive step and industrial applicability follows for patent applications, but no examination of novelty and inventive step is carried out in the case of utility model applications.

After a period of not less than 18 months from the filing date of the application, the HIPO makes the application available for the public. The applicant may also request an earlier publication. Publication gives rise to provisional protection, on the basis of which the applicant may seek relief against alleged infringers, but in patent cases the infringement procedure is stayed until final protection is obtained.

There is no grant or registration procedure for know-how; protection arises automatically pursuant to the law.

The granting procedure for patents usually takes two to three years, and six to 12 months for utility models. Representation by a patent attorney or a lawyer is mandatory for foreign but not domestic clients before the HIPO, although it is mandatory for everyone before the courts. The average cost to grant a patent is EUR1,000 (excluding lawyers’ fees and depending on the length of time taken); for utility models it is EUR110 (excluding lawyers’ fees).

Patents last 20 years from the filing date, while utility models last ten years from the filing date. The duration of know-how is potentially unlimited, provided the legal requirements are met.

The holder of the patent has the exclusive right to exploit the invention, on the basis of which the patentee is entitled to prevent any person that does not have their consent from:

• making, using, putting on the market or offering for sale a product that is the subject matter of the invention, or stocking or importing the product for such purposes;
• using a process that is the subject matter of the invention or offering the process for use where such other person knows, or it is obvious from the circumstances, that the process cannot be used without the consent of the patentee; or
• making, using, putting on the market, offering for sale or stocking or importing for such purposes a product obtained directly by a process that is the subject matter of the invention.

There is no public information listing applicable patents in relation to certain products or processes, not even in the pharmaceutical space.

Utility Models (Article 12 of the Utility Model Act)

Utility model protection affords the holder the exclusive right to exploit the utility model or to license another person to exploit it, as provided for by legislation. The exclusive right of exploitation shall include the manufacture, use or importation of the subject matter of the utility model, or putting it on the market within the framework of economic activity.

The owners of the above IP rights are entitled to seek remedies against alleged infringers and may allow their licensees to take such action. The costs relating to the above IP rights are to be borne by the owner(s).

Supplementary protection certificates (SPCs) are available for medicinal products on the basis of Regulation (EC) Nos 469/2009 and 1901/2006 (paediatric extensions) and for plant protection products on the basis of Regulation (EC) No 1610/96. Such additional protection is available for a maximum of five years for certain pharmaceutical and plant protection products that have been approved for sale in Hungary and are covered by a national patent (an additional six months of protection is available for medicinal products that are also used for paediatric applications).

During the patent granting procedure, any person may file an observation with the HIPO to the effect that the invention or the application does not comply with a requirement of patentability. Such observation shall be taken into consideration when the requirement objected to in the observation is examined. The person making the observation shall not be a party to the patent granting procedure but shall be notified of the outcome of their observation.

If a final decision of the HIPO fully or partially refuses the grant of a registered intellectual property right, such as patents or utility models, an appeal (ie, a request for reconsideration) may be filed with the Metropolitan Tribunal within 30 days of the date of the notification of the decision. The decision of the Metropolitan Tribunal may be further appealed at the Metropolitan Appeal Court.

Patents, SPCs and utility models lapse if the annual fees are not paid. A possible remedy is to pay an extra 50% late payment fee within six months of the missed deadline. If patent or SPC protection has lapsed due to non-payment of the annual fees, protection shall be restored at the request of the applicant or the patentee. The restoration of patent protection may be requested within three months following the expiry of the six-month grace period, upon the payment of a fee.

If utility model protection has lapsed due to failure to pay annual fees, the HIPO shall, on request, restore the protection upon the payment of a fee if the failure occurred for good reason.

The fee to be paid for restoring the protection of any above IP right is twice the amount of the annual fee, and is to be paid within a year of the lapse occurring.

Owners of intellectual property rights cannot themselves initiate any post-grant proceeding to amend the scope of the issued intellectual property right, but in the course of an invalidity action initiated by a third party they have the right to limit the scope of their right when patents or utility models are concerned.

In the event of infringement, the owner of a technical intellectual property right may consider civil or criminal routes of enforcement or customs measures. Civil law enforcement includes initiating a preliminary injunction proceeding and/or a main lawsuit related to patent or utility model infringement. Wilful infringement of intellectual property rights is also considered a criminal offence and may incur penalties. Customs measures are available in the framework of Regulation (EU) No 608/2013.

Importantly, it is not possible to file a protective letter with a court in Hungary. Third parties who find themselves in potential conflict with a patent or other technical intellectual property rights (eg, a utility model) may have the following options.

• A non-infringement action in front of the HIPO may be started against a patent by anyone who is concerned that an infringement action will be initiated against them by the patentee. In the request, the product or method of the applicant has to be compared to the patent in question. A pending non-infringement action causes the stay of the corresponding infringement action, but does not stay the preliminary injunction proceeding. If non-infringement is declared with a binding effect, there can be no infringement action against the same product or method.
• A revocation action in front of the HIPO against a patent can be commenced by anyone. If there are several revocation requests against the same patent, the proceedings are often joined. A pending revocation action causes the stay of the corresponding infringement action but does not stay a corresponding preliminary injunction proceeding. A first instance decision by the HIPO declaring the invalidity of the patent causes the lifting of a preliminary injunction in place and thus effectively excludes ordering a preliminary injunction. It is possible for the parties to make a settlement in the revocation action; however, the HIPO still has the authority to continue the revocation ex officio, but this seems to be a rather theoretical possibility as there are no cases where the HIPO would have exercised this right, as far as is known. The defendant of a patent infringement lawsuit may also choose to challenge the validity of the patent in suit directly as a counterclaim. Importantly, as long as there is no revocation proceeding at the HIPO, as an alternative, the revocation request can be filed as a direct counterclaim in the infringement court proceeding.
• A compulsory licence may be obtained in the event of lack of genuine use of the patent or dependency of patents, as well as under Regulation (EC) No 816/2006 or for addressing a public health emergency.

Compulsory licences on the grounds of either dependency or lack of use are adjudicated exclusively by the Metropolitan Tribunal. A successful lawsuit for a compulsory licence ensures that the licensee can use the patent and the patentee has to receive remuneration. Compulsory licences shall be registered in the patent register. Please note that no known compulsory licences have been issued by the courts so far, with only one case having been initiated in the past 20 years, as far as is known.

An additional type of compulsory licence was enacted in 2020, in the Patent Act in connection with the COVID-19 pandemic: the so-called public health compulsory licence is to be granted by the HIPO during periods declared by the government as a health crisis, such as the COVID-19 pandemic. In such situations, a compulsory licence can be granted for patented drugs, active ingredients or medical devices, and for patented processes or equipment for the production of such for the purpose of fulfilling domestic needs and – in a limited scope – for export. Detailed rules are provided in the Patent Act. Based on these rules some compulsory licenses have been granted by the HIPO; however, recently, following the exhaustion of appeals, the Constitutional Court ordered that the procedure shall be repeated as the patent owner’s right to be heard had been violated by the procedure of the HIPO (Decision No. 3434/2023 (X.25.)).

The Metropolitan Tribunal of Budapest has first instance court for patent and utility model infringement lawsuits, as well as preliminary injunction proceedings. The Metropolitan Appeal Court acts as second instance, and the Curia (Supreme Court) provides judicial review for questions of law.

For revocation actions, the first instance authority is the HIPO, and any appeals against its decisions are dealt with by the Metropolitan Tribunal acting as first judicial instance. The Metropolitan Appeal Court acts as second judicial instance, and the Curia provides judicial review.

This ensures four instances for revocation (the HIPO preceding three judicial instances) but only three for infringement. Also, it means that patent litigation is bifurcated in Hungary, and infringements and revocations are assessed independently in separate proceedings.

However, the defendant in a patent infringement lawsuit may also choose to challenge the validity of a patent directly in the form of a counterclaim. In this case, the revocation action is one instance shorter: the level of the HIPO proceeding is skipped and the proceeding starts directly before the Metropolitan Tribunal in a unified infringement revocation proceeding.

Lawsuits related to ownership, licensing or remuneration, including any dispute arising from contracts involving patents, belong to one of the tribunals of Hungary (courts acting in the central town of each county), depending primarily on the address of the defendant.

As a specialised authority, the HIPO acts in revocation and non-infringement actions. There is no specialised court for patent litigation (patent infringement, compulsory licensing, judicial level of revocation), although the Metropolitan Tribunal has exclusive competence for these cases and there are designated senates at each judicial level that handle all IP rights cases, and can therefore be regarded as specialised senates.

There are no prerequisites to filing a lawsuit for patent infringement. However, according to the Patent Act, if a preliminary injunction is granted, the main lawsuit shall be initiated within 15 calendar days or the preliminary injunction will be lifted.

In the case of a lawsuit for compulsory licence, the plaintiff (ie, the party seeking the licence) shall demonstrate that the patentee was not willing to grant a licence in reasonable time. This can be regarded as a prerequisite as it implies a mandatory communication between the parties prior to the lawsuit.

In Hungary, licensees can also commence patent infringement lawsuits in their own name, provided that the licensee is registered as such in the patent register and can prove that it called the plaintiff to stand against infringement and the plaintiff remained passive for 30 days.

Foreign individuals and entities appearing at the HIPO must be represented by either a lawyer or a patent lawyer, or a team of such. In court proceedings, legal representation is required by law for both foreign and domestic parties.

In intellectual property cases, preliminary injunctions are available based on the general rules of the Code of Civil Procedure (CCP), but with special rules, eg, as laid down in the Patent Act.

The right holder seeking a preliminary injunction shall demonstrate the probability of infringement as well as the necessity and proportionality in the request. Regarding necessity, a special presumption exists in the Patent Act by which necessity shall be presumed:

• if the invention is under patent protection;
• if the plaintiff is the patentee or registered licensee; and
• if fewer than 60 days have lapsed since the plaintiff gained knowledge of the infringement and fewer than six months have passed since the actual commencement of the infringement.

However, this presumption can be overturned; in the course of evaluating this, the court shall attribute special consideration to certain facts, particularly if the patent has been revoked at least at first instance and in the case of European patents in any European Patent Convention (EPC) member state. The proportionality requirement means weighing up the balance of public interest according to the Patent Act, taking into account the interests of third parties.

Theoretically, a preliminary injunction may also be ordered in the event of direct threat of infringement, before the infringing product is actually launched on the market. However, in these cases the court tends to require convincing and specific evidence that the start of distribution or manufacturing is imminent.

The preliminary injunction is typically aimed at a cease-and-desist order, as well as the seizure and withdrawal of the products from the channels of commerce. Hungarian law applies specific injunctions, meaning that the court specifically identifies the infringing product by name or other identifier.

Either party may appeal a preliminary injunction, although it is enforceable regardless of an appeal. Upon the request and arguments of the defendant, the court often effectively grants a preliminary injunction, subject to a bond to be deposited by the plaintiff.

If the circumstances that gave rise to the preliminary injunction change, the defendant may request the injunction to be lifted and the court will decide on the request, evaluating whether or not the change of circumstances justifies the lifting of the injunction. If the preliminary injunction is lifted, the injunction defendant may seek appropriate compensation from the plaintiff. One relevant Hungarian court case gave rise to judgment in Case C-688/17 (Bayer), which interpreted Article 9(7) of Directive 2004/48/EC on the Enforcement of Intellectual Property Rights.

Ex parte preliminary injunctions are also made available by the law in the event of urgency, such as the threat of irreparable harm. However, as far as is known, the court has so far never decided on a preliminary injunction request in ex parte proceedings in patent cases. Instead, preliminary injunction requests have always been served on the defendant. However, in trade secret cases, preliminary injunctions have already been granted in ex parte procedures.

It is not possible to file a protective letter with the court in Hungary, although potential opponents may commence proceedings for non-infringement. If sued in a preliminary injunction proceeding, the opponent may also request the court to make a bond the condition of the preliminary injunction entering into effect; the amount of the bond is subject to the arguments of the parties.

Very often, when a revocation action is pending, the court determines the bond based on the expected profit loss of the defendant for the duration of the revocation proceedings. According to the rules of the CCP, the bond shall be automatically transferred to the defendant if the court dismisses the petition of the plaintiff for the declaration of the infringement. If infringement is declared in the judgment, the bond shall be returned to the plaintiff.

There is no special limitation period for intellectual property matters; the general five-year limitation applies for all civil law claims. However, judicial practice confirms that the right to remedies, such as declaration of infringement and cease-and-desist orders, is tied to the ownership character of registered intellectual property rights and thus such claims do not prescribe.

If the plaintiff is unable to start an action for a reason that is not their fault, the limitation period is stayed. Also, there are certain acts that interrupt the limitation period and cause it to restart, such as the initiation of a lawsuit if it is concluded on the merits. Importantly, a mere warning letter does not interrupt the limitation period.

Possibilities for obtaining information in patent infringement lawsuits are mostly made available in the context of Directive 2004/48/EC on the Enforcement of Intellectual Property Rights, as well as the Hungarian Patent Act’s earlier harmonisation with the Trade Related Aspects of Intellectual Property Rights Agreement (TRIPS).

The right to information from the defendant is available as part of a preliminary or final injunction. In this context, the court may order the defendant to provide information on the quantities of the infringing products, sales information and information about commercial partners. The same order can be obtained against parties who possess infringing products or have obtained or provided services relating to the infringement on a commercial scale.

Also, during a patent infringement lawsuit the plaintiff may ask the court to order the defendant to provide information or evidence on the infringing product/process, and also to provide financial information. Besides this, the plaintiff may seek an order on the preliminary obtaining of evidence, which would allow the plaintiff to have the court inspect the defendant’s premises to request information in due course.

Notably, neither the preliminary obtaining of evidence nor the enforcing of the right of information against third parties is common in Hungary. Also, the court tends to deny a request to oblige the defendant to provide information in a preliminary injunction proceeding, since the court considers it irreversible, which is against the nature of a provisional measure.

The initial pleadings must be very detailed, according to the rules of the CCP. The court claim and the preliminary injunction request shall contain detailed arguments and all available evidence relating to the infringement. Preliminary injunction requests shall also include detailed arguments regarding necessity and proportionality.

Importantly, following the initial round of court claim and the statement of defence, there is no automatic right to file further motions; the plaintiff may only respond to the statement of defence if the court calls the plaintiff to do so. Parties are thus advised to submit their arguments and evidence in their first submission to the court. An important feature of the Hungarian proceedings is that all foreign language documents submitted as evidence shall be submitted in Hungarian as well.

In revocation actions, the rules are not so strict before the HIPO. There are several rounds of exchanging writs by the parties, and evidence can also be filed during the proceedings before the HIPO, subject to respecting the timing of the hearing – ie, that evidence and pleadings filed too close to the hearing may be ignored by the HIPO. However, following the first instance proceeding of the HIPO, the same rules apply as above when the proceeding reaches the judicial level.

Collective actions are not known for IP litigation in Hungary.

The Patent Act (and other relevant acts, such as the Utility Model Act) does not contain any provisions relating to restrictions, except for the protection of confidential information. The question of patent misuse or abuse has arisen following CJEU judgment in Case C-688/17 (Bayer) in the context of awarding compensation to the defendant when a preliminary injunction was subsequently lifted, but the case is still pending.

In patent infringement cases, the claimant is normally the owner of the patent. If there are co-owners, any of the owners has the right to enforce the patent. Furthermore, the registered licensee (either exclusive or non-exclusive) may submit an action on their own behalf if the patent owner was invited to take appropriate steps against the alleged infringer and failed to do so within 30 days. Furthermore, licensees may act as co-plaintiffs of the patentee or intervene in infringement proceedings initiated by the patentee.

In the case of trade secrets, normally the owner of the right files an action against the infringer; the licensee may file such action only if it has such right on the basis of the licence agreement.

Direct Infringement

In instances of direct infringement of an exclusive right, the patentee shall be entitled to prevent any person from doing the following without consent, under Article 19 of the Patent Act:

• making, using, putting on the market or offering for sale a product that is the subject matter of the invention, or stocking or importing the product for such purposes;
• using a process that is the subject matter of the invention or offering the process for use where such other person knows, or it is obvious from the circumstances, that the process cannot be used without the consent of the patentee; or
• making, using, putting on the market, offering for sale or stocking or importing for such purposes a product obtained directly by a process that is the subject matter of the invention.

In practice, courts interpret the forms of exploitation listed in Article 19 of the Patent Act strictly, and no other activity is considered to be infringing.

Indirect Infringement

In the case of indirect infringement, the patentee is entitled to prevent any person that does not have consent from supplying or offering to supply a person – other than a person entitled to exploit the invention – with means (instruments, appliances) relating to an essential element of the invention or carrying out the invention. This applies when the person knows, or it is obvious from the circumstances, that those means are suitable and intended for carrying out the invention.

For available remedies, see 6. Remedies.

A special legal presumption is established in the Patent Act regarding process patents. Article 19(7) states that, pending proof to the contrary, a product shall be deemed to be produced through the patented process (in suit) if the product is new, or if there is conclusive evidence that the product has been manufactured by the patented process, and the holder of the patent could not define the process actually applied after having taken the steps generally expected in the given situation. Conclusive evidence to verify that the product has been produced by way of the patented process constitutes the probability that it is the only process that has been made available to the public.

There are no special rules for the situation if parts of the allegedly infringing process are practised outside Hungary, and this has not yet been addressed in court practice.

Under Article 24 of the Patent Act (which is in line with Article 69 of the European Patent Convention 2000), the scope of protection of the patent shall be determined by the claims. Claims shall be interpreted on the basis of the description and the drawings. The scope of the patent covers any product or process in which each characteristic of the claim is realised.

The doctrine of equivalence is also implemented into the Patent Act – ie, to determine whether the patent protection extends to a product or process, account shall be taken of any characteristics of the product or process that are equivalent to those specified in the claims.

As the Hungarian patent litigation system allows bifurcation (ie, the defendant of a patent infringement lawsuit may choose whether to start revocation directly as a counterclaim or separately before the HIPO), the natural defence against an infringement case is to file a revocation action. The infringement lawsuit is suspended whenever the revocation proceeding is initiated separately before the HIPO, be it before or during the infringement lawsuit, but preliminary injunction procedures are never suspended.

According to Article 37 of the Patent Act, any person believing that proceedings for patent infringement may be instituted against them may file a non-infringement procedure, requesting a decision ruling that the product or process exploited or to be exploited by them does not infringe a particular patent. Such a procedure shall be filed with the HIPO before the submission of the infringement action. In this instance, courts usually also suspend the infringement proceeding until the final decision in the non-infringement procedure.

Other defences (or rather limitation of the exclusive rights of the patentee) also exist, such as the Bolar exemption, patent exhaustion, prior use rights, farmers’ privileges, transport traffic and compulsory licences.

Regarding the Bolar exemption, Article 19(6)(c) of the Patent Act contains a wide exemption in Hungary for specified pharmaceuticals as of 1 January 2022. According to this exemption, the exclusive right of the patentee shall not extend to acts carried out for experimental purposes relating to the subject matter of the invention, including experiments, studies and related tasks necessary for obtaining an authorisation to place a pharmaceutical product on the market in the EEA or in a third country, particularly the manufacturing, use, distribution, offer for sale, storage, importing or exporting – regardless of whether or not these acts are done by the applicant for the marketing authorisation or by another person in a commercial relationship with the applicant for this purpose.

For non-pharmaceutical products, a more general and technology-neutral experimental exemption applies in Article 19(6)b, according to which the exclusive right of the patentee does not extend to acts done for experimental purposes in connection with the subject matter of the patented invention.

Furthermore, according to Article 19(6), acts that are performed for the purpose of private use and/or are considered as non-economic activities are also exempt, as is the non-regular preparation of a medicine in a pharmacy, upon a doctor’s prescription.

The prior use of the invention is also treated as a limitation of the exclusive rights of the patent holder, if someone had begun making or using the subject matter of the invention in good faith, before the date of priority, in the territory of the country and within the framework of their economic activities.

Article 20 of the Patent Act regulates patent exhaustion, whereby the exclusive right of exploitation conferred by patent protection shall not extend to acts concerning a product put on the market in the territory of the EEA by the patentee or with their express consent, except where the patentee has legitimate interests in opposing the further marketing of the product.

According to the farmers’ privilege, the sale or other form of commercialisation of plant propagating material to a farmer by the patentee or with their express consent implies authorisation for the farmer to use the product of the harvest for propagation or multiplication on their own farm. Similarly, the sale or other form of commercialisation of breeding stock or other animal reproductive material to a farmer by the patentee or with their express consent implies authorisation for the farmer to use the patented livestock for agricultural purposes.

According to Hungarian practice, the court shall appoint a court expert if necessary – ie, if the court does not possess the required professional knowledge on a particular fact. Either party may file a motion for the appointment of a court expert, and the court may appoint a court expert ex officio. Essentially, the court formulates the questions to the expert, who then provides their expertise in writing. The court may invite the court-appointed expert to the hearing if the written expertise is not clear enough and/or there is any contradiction. At court hearings, the expert is first questioned by the judges; the parties may question the expert only if the judges allow it.

According to Hungarian procedural rules, two other kinds of experts are also recognised: a private expert and an expert appointed in another proceeding. Under the rules, both court-appointed experts and private experts must be chosen from the official list of registered experts.

The main difference between the different types of experts is that if the court appoints an expert, there can be just one expert for the same question, whereas if private experts are used, both sides can propose their own private expert’s opinion. In revocation actions before the court, however, it is not possible to use party-appointed private experts.

The party shall choose from among the experts, pursuant to the principle of efficiency in legal procedures, which does not allow for a party to offer multiple, parallel expert opinions as evidence regarding the same issue. However, only court-appointed experts can be used in revocation proceedings at the court.

There are no separate procedures for construing the terms of the patent’s claims.

Generally, there is no system in Hungary for the court to accept amicus briefs. A provision specific to IP cases is that the HIPO is entitled to submit its legal standpoint to the court about the case in proceedings for the judicial review of the decisions of the HIPO (eg, in revocation actions), even though the authority is not a party to the proceedings. The HIPO tends to exercise this right from time to time in more significant cases.

The revocation of a patent may be requested by anyone without time limit and without any legal or commercial interest, except where the patent is granted for someone who is not entitled to it; only the real and true inventor or predecessor of the inventor may file such a request.

If a patent is invalid, it shall be revoked ex tunc, with retroactive effect, from which it follows that no patent infringement can be established on the basis of a revoked patent. However, importantly, the Hungarian patent litigation system allows bifurcation, which means that the revocation action starts before the HIPO unless it is initiated as a counterclaim against the infringement petition by the defendant of an infringement lawsuit.

According to Article 42(1) of the Patent Act, the patent shall be revoked ex tunc if:

• the subject matter of the patent does not satisfy the requirements laid down in the Patent Act (lack of novelty, inventive step, industrial applicability, exclusion from patent protection);
• the description does not disclose the invention in a clear and complete manner (insufficiency);
• the subject matter of the patent extends beyond the content of the application as filed at the date of filing or – in the case of division – beyond the content of the divisional application (added matter); or
• it was granted to a person who was not entitled to it.

The revocation of patents – either national patents or the Hungarian part of European patents – falls under the competence of the HIPO at first instance, or under the Metropolitan Court if the revocation action is introduced as a counterclaim by the defendant in an infringement lawsuit.

A registered patent may also be cancelled if the renewal fees have not been paid, or due to withdrawal by the patent owner.

A patent can be revoked in whole or in part. According to Article 42(2), if the grounds for revocation affect the patent in part only, the scope of the patent shall be limited accordingly.

The patent owner may request an amendment of the claim in a revocation procedure, and may file the suggested wording of the amendment. The scope of protection conferred by the amended claim must be narrower than that of the original. In addition, the amended claims shall be disclosed in full in the original application, and shall fulfil all the patentability requirements.

There is no cancellation proceeding for patent owners in Hungary.

Revocation and infringement proceedings are not generally heard together, according to the basically bifurcated Hungarian patent litigation system. If the revocation proceedings are ongoing the main infringement procedures must be suspended until the final decision in the revocation procedure; the decision in the revocation procedure always prevails over the decision of the main infringement procedure.

Softening the strict bifurcation system, as of 1 January 2022, the defendant of the patent infringement lawsuit may also choose to file the revocation request in the form of a counterclaim against the infringement petition, in which case both infringement and revocation actions are decided in the same court proceeding. In any case, the decision in preliminary injunction procedures always prevails over the final decision in the revocation procedure, so the patent owner has a chance to stop the infringing activity until the end of the revocation procedure.

There are different rules for litigating utility models. In a utility model infringement lawsuit, the court may decide not to suspend the lawsuit if the patentee presents a so-called positive opinion on protection, which can be obtained by the HIPO. In utility model infringement proceedings, if the court does not suspend the lawsuit, it may adjudicate the merits of the invalidity objection of the defendant and dismiss the infringement petition on this basis. This is, however, not an erga omnes decision on invalidity.

The general rules contained in the CCP (Act CXXX of 2016) contain special provisions relating to court proceedings concerning the meritorious decision of the HIPO in respect of intellectual property rights (patents, utility models). These special provisions relate primarily to the definition of the competent court, the composition of the court, exclusion, publicity and representation.

An IP-specific provision for court proceedings for infringement and revocation is that the exclusive jurisdiction of the Metropolitan Tribunal of Budapest shall apply. At the request of either of the parties, the court may decide to hold the hearings in closed sessions, even in the absence of the conditions set forth in the CCP.

In addition to the general cases of exclusion set forth in the CCP, the persons who participate in passing the decision of the HIPO, as well as their close relatives (according to the Civil Code), shall be prohibited from taking part in the case and from participating as a judge. In cases brought in connection with IP rights, in addition to lawyers, patent attorneys may take action in the proceedings as representatives, including in cases of mandatory legal representation.

Main infringement proceedings may take one to two years at first instance, depending on the complexity of the case and how many experts are needed. Cross-examination is not practised in Hungary; it is primarily the judge who asks questions of the experts or witnesses, but the judge may allow the parties to ask questions directly as well. Experts are typically heard at first instance, but can also be heard at second instance if such a need arises.

During the trial, there is a preparatory and one or several main hearings but, in theory, if the case is simple the preparatory hearing may turn into a main one and the court can reach a decision on the first hearing. The length of the proceeding is increased by years if there is a revocation action at the EPO or at the HIPO against the patent, due to which the infringement lawsuit is suspended.

As the option of challenging patent validity before the court as a counterclaim to infringe is very new (applicable from 1 January 2022), there is no practice with regard to the length of the combined infringement revocation lawsuit. Higher instances of the case typically involve one hearing and are usually decided in a year. If a declaratory judgment and damages are sought together, it is typical for the court to first make an interim decision on infringement and to only proceed with the pecuniary claims once the interim decision becomes final.

There are also some special rules relating to preliminary injunctions (see 2.7 Interim Injunctions).

Each revocation and non-infringement proceeding before the HIPO is heard and decided by a panel of three members, two of whom are patent examiners and one of whom is a legal member.

The Metropolitan Tribunal of Budapest has exclusive jurisdiction for reviewing the decisions of the HIPO. The Metropolitan Tribunal of Budapest also has exclusive jurisdiction for IP rights infringement lawsuits, including preliminary injunction proceedings. It has a specialised IP panel consisting of three judges, two of whom have a technical background.

In both the review of the HIPO’s decisions and infringement lawsuits, the court of second instance is the Metropolitan Court of Appeal (or Metropolitan Appeal Court) in Budapest, which proceeds with three legal judges. Similarly, the Curia proceeds with a panel of only legal judges.

The types of patent lawsuits that do not fall under the exclusive jurisdiction of the Metropolitan Tribunal of Budapest (eg, entitlement lawsuits, employee remuneration, licence disputes) are adjudicated by local courts corresponding to the seat of the defendant, decided by one or three legal judges, depending on the instance of the proceedings.

In all the above examples, the parties have no influence on who is appointed as decision-maker, since it is defined by law (exclusive jurisdiction) and judges are assigned in accordance with the respective rules applicable for the courts.

In cases of trade secret infringement, the competent court corresponds to the seat of the defendant, and the first instance court proceeds with a single judge.

There is no statutory provision regarding commercial entities’ obligatory attempt to settle their dispute out of court prior to the court procedure. Also, the Hungarian litigation system does not involve any form of mandatory settlement conference. It is often the case, however, that parties wish to settle the proceedings themselves, which they can do at any point, as long as a final and binding decision has not been made. There are essentially two ways to do this.

• First, the parties may settle out of court and mutually request the court to terminate the lawsuit. Here, the court only orders on costs if needed, and the case is terminated without res judicata. In this instance, the obligations of the parties are contractual obligations towards each other, and can be enforced as such.
• The other form is that the parties may also ask the court in infringement lawsuits (but not in proceedings for the review of the decisions of the HIPO) to approve their agreement, in which case the order made by the court in this subject has the effect of a judgment and results in res judicata. Quite often, parties mutually request the stay of the proceeding for the duration of their settlement negotiation.

Parties may also settle during the HIPO phase of a revocation action. However, the HIPO is entitled to continue the proceeding ex officio. As far as is known, the HIPO has never exercised this right, although logically the settlement of the parties should not determine the validity of the IP rights.

The Hungarian system is basically bifurcated, which means that validity and infringement proceedings are decided in separate proceedings and in different forums: patent infringement proceedings fall within the exclusive competence of the Metropolitan Tribunal at first instance, while revocation actions are initiated before the HIPO, the decision of which can be appealed before the Metropolitan Tribunal.

If parallel revocation proceedings are pending, according to the established court practice of the Metropolitan Tribunal, the infringement proceedings are always stayed until the final conclusion of the revocation proceedings. The exception is that, as of 1 January 2022, the defendant in an infringement lawsuit may decide to file a revocation action as a direct counterclaim in the infringement lawsuit, so that the court decides on both issues in a unified proceeding. Importantly, the ongoing revocation action does not stay the preliminary injunction, and does not prevent the court from making a decision and – if justified – granting a preliminary injunction.

According to recent court practice, the revocation action against the Hungarian-validated part of a European patent may be stayed until the resolution of the EPO opposition proceeding if that is still pending.

If the court finds the patent to be infringed, it shall order a final injunction (eg, declaration of infringement, cease-and-desist obligations). Importantly, the court may only order such remedies that were contained in the statement of claims of the patentee; even in that case, the court may not order it in a form that was not specifically requested by the plaintiff. Following the implementation of Directive (EU) 2016/943 (“Trade Secret Directive”), unlike in the case of registered technical IP rights, in trade secret litigation the court has a degree of discretion regarding the remedies ordered, subject to proportionality.

As to monetary remedies, the patentee may request the return of any enrichment (profit or an unpaid licence fee) gained through the infringement of the patent, or may demand compensation for damages in accordance with the provisions of civil liability.

The main difference between the return of enrichment and damage compensation is that the first one is objective and the second one depends on the infringer’s liability. The plaintiff shall, however, prove the amount of enrichment, and that it resulted directly from infringement. Damages, on the other hand, depend on the liability of the defendant.

If the patentee failed to submit the Hungarian translation of a European patent as required by law, and the infringer’s home address or registered office is located in Hungary, the infringement may not be imputed to that person unless the patentee is able to verify that the infringer should have understood the original text of the European patent even in the absence of a translation.

There are no punitive monetary sanctions under Hungarian law.

The court may order the provision of information, the delivery and destruction of the infringing products, the publication of the decision in newspapers or magazines, or on the internet, at the expense of the infringer, and the recall of the infringing products from the channels of commerce.

If the fact of an infringement of an effective IP right is established, the court grants an injunction without considering the other facts of the case (eg, the revenue loss of the defendant or the interest of third parties or wilful infringement).

Remedies are enforced in line with the general rules of foreclosure, with special rules applying for IP cases that involve recurring penalties for non-complying defendants regarding injunctive relief orders.

If the court rejects the infringement claim, the defendant shall be awarded the legal expenses that have arisen in connection with the lawsuit (lawyers’ fees, translation costs, duty fees, etc).

Due to the bifurcated system, a preliminary injunction may be granted against the defendant, and the patentee can then start the infringement proceedings within the legal deadline, and as a usual defence the defendant files a revocation request against the patent-in-suit. If the patent has been revoked as a result of the revocation proceedings, and the preliminary injunction is lifted, the defendant may claim damages. Regarding the legal basis of such damages, CJEU judgment in Case C-688/17 (Bayer), which was a referral initiated by the Metropolitan Court of Budapest, is to be taken into account.

Available remedies are determined uniformly by the Patent Act, regardless of different IP rights.

An appeal will suspend the enforceability of the first-instance decision on the merits, unless the judgment of the court of first instance expressly states that the decision is enforceable notwithstanding an appeal.

Preliminary injunctions are always enforceable, irrespective of an appeal.

Under Hungarian law, there are no special legal provisions for IP rights appeal proceedings. This also applies to patent/utility model infringement and validity proceedings, which are equally governed by the general rules of civil procedures contained in the CCP. In these cases, which come under the exclusive jurisdiction of the Metropolitan Tribunal of Budapest, the Metropolitan Court of Appeal is competent to adjudicate the appeals with a panel of three legal judges. In infringement lawsuits, the Appeal Court shall hold a hearing, while a hearing is only held upon the request of either party in proceedings for the review of HIPO decisions.

Judgments and meritorious orders are subject to appeal in all proceedings, either contentious (eg, infringement lawsuits) or non-contentious (eg, preliminary injunction proceedings and reviews of HIPO decisions). The deadline for appeal is 15 days from the receipt of the decision. In IP cases, the Metropolitan Court of Appeal adjudicates the appeals and conducts a full review of the facts and points of law within the limits determined by the appeal submitted.

The appellant must accurately set out the grounds on which the appeal is based by indicating the specific provision or part of the decision challenged by the appeal. The appeal shall contain a definitive request for the changes to be made by the appeal court in the specific provision or part of the judgment of first instance that is contested, or for abolishing such provision or part, and shall provide its reasons respectively.

In the appeal phase of the proceedings, the submission of new facts or evidence is limited. There is no appeal against the decision of the Metropolitan Court of Appeal. A final and binding decision can be referred to the Supreme Court of Hungary (Curia) for judicial review, but this is only possible regarding questions of law.

Costs arising for the plaintiff prior to a lawsuit typically relate to the following categories:

• obtaining evidence – this typically includes the costs of test-purchasing a sample of the infringing product and the technical analysis of it, if required, or obtaining expert opinions;
• the costs of pre-trial correspondence with the other party, although this is not mandatory; and
• the preparation of the court claim and its legal arguments.

Revocation actions and non-infringement proceedings have a fixed procedural fee of approximately EUR440 for the HIPO stage. During the court phase, the duty fee is determined by a hypothetical value of the proceedings, which is set by law. This makes the duty fee rather minimal. The duty fee in revocation proceedings is not dependent on the value of the patent or the market concerned.

In infringement lawsuits, the duty fee is 6% of the value of the lawsuit. However, according to practice, the value of the lawsuit can only be determined when the claim contains a pecuniary claim – eg, a claim for damages. If there is no pecuniary claim, the value of the lawsuit is hypothetical, and the duty fee is very low (less than EUR50 per patent and per defendant). The same (somewhat increased) volume of duty fee is to be paid at higher court instances.

In principle, the losing party shall be responsible for paying court fees, expenses and the other party’s legal costs. All expenses must be validated by invoices, including the fee of the legal representative. However, the HIPO and the court have the right to reduce the legal costs that are to be awarded to the winning party, and often do so.

The court may also decide that each party is to bear its own costs, especially if the winning ratio is close to 50% (eg, by only partially granting what the plaintiff requested). Such a decision is quite common in technical intellectual property cases. Also, if a party causes extra costs (eg, if its delaying tactics make a further hearing necessary), the court may order the party to bear these costs regardless of the winning ratio.

The legal costs awarded by the court are to be paid once the decision becomes final and binding.

There is no specific regulation regarding arbitration on the actions of IP rights in Hungary.

However, according to Article 44 of the Hungarian Patent Act, the HIPO shall have exclusive competence in procedures for the revocation (invalidation) of patents (at first instance). Therefore, a decision on the validity of a Hungarian patent will not be recognised by the HIPO or Hungarian courts and, as a result, cannot have effect on a patent’s validity (either national or validated European patent) as registered by the HIPO.

No legal regulation prohibits the use of ADR in patent infringement situations, but there have been no such situations that would have been settled by arbitration, as far as is known.

An intellectual property right can be assigned in Hungary and theoretically in most cases no written agreement is required. However, written form is required in case of assignment from an employee to their employer.

In case of registered IP rights (eg, patents, utility models) in order for the new right-holder would be able to act against third parties the assignment must be registered with the HIPO, enclosing at least a short assignment form. There is no need to submit the detailed IP transfer agreement. Service inventions made under employment are automatically assigned to the employer on disclosure, on the condition that the employer accepts said inventions in writing within 90 days of the disclosure.

It is recommended that the assignment is registered by the HIPO, preferably using a simplified assignment form. However, there is no restriction on the content of the assignment agreement for this purpose, provided that it clearly contains the necessary identification data of the IP right, the assignor, the assignee and the fact of assignment.

The licensing provisions are included in the Patent Act and apply to all other kinds of industrial property rights. An intellectual property right can be licensed in Hungary without any formal requirement, although it is recommended to be in writing.

All kinds of intellectual properties (ie, industrial properties), including their applications, copyrights and trade secrets (know-how), and their combination can be licensed. The licence can be non-exclusive or exclusive, with the opportunity to grant the right to sub-license. However, according to the general rules of the Patent Act the licence is treated as non-exclusive with no right to sub-license; therefore, exclusivity and sub-licensing must be explicitly agreed by the parties.

The licensor shall guarantee both the freedom to operate and the technical operability of the IP; this also can be excluded by the parties. The licence terminates upon the expiry of the protection of the IP, or earlier, on the date set by the parties in their agreement.

In the case of registered IP rights, the licensee can be registered with the HIPO, although such registration is not obligatory. However, the licensee (exclusive or non-exclusive) has no standing to sue if it is not registered.

There is no restriction on the content of the licensing agreement for the registration purposes, provided that it clearly contains the necessary identification data of the IP right, the licensor, the licensee and the fact of licensing.

Hungarian IP law acknowledges the compulsory licence, but it is rarely used in practice. Please see 2.2 Third-Party Remedies to Remove the Effects of Intellectual Property regarding the types of compulsory licence. The public health compulsory licence has been enacted due to the COVID-19 pandemic; although compulsory licence cases are generally quite rare, the public health compulsory licence is of specific interest.