The following legal provisions need to be taken into consideration before proceeding in a patent infringement suit:
(1) The Patent Act, Law No. XXXIII of 1995;
(2) The modified Hungarian Civil Code, Law No. IV of 1959,
(3) The modified Law No. III of 1952, the legal provisions containing the Hungarian Civil Procedural Law;
(4) Law No. IX. of year 1998 on the implementation of the Marrakesh Agreement and its annexes establishing the World Trade Organization in the frame of the General Agreement on Tariffs and Trade (GATT);
(5) Law No. LIII. of 1994 on Judicial Enforcement, modified several times.
The legal provision most pertinent to actions for patent infringement is the
Patent Act. The Hungarian Civil Code is also important because the Patent Act,
which represents the law of industrial protection, comes under the civil law.
Thus, if in the course of litigation all issues cannot be settled on the basis
of the Patent Act alone, then the rules of the Civil Law as contained in the
Civil Code are applicable. On the other hand, the provisions of the Civil
Procedural Law are important because in Hungary patent infringement lawsuits
come under the exclusive jurisdiction of a civil court, the Metropolitan Court
of Budapest, so that the rules of procedure are governed by the Civil
Procedural Law, subject to some special procedural provisions of the Patent
Act.
By Law No. IX. of 1998 Hungary joined the GATT-Agreement. The significance of
this Act is that by joining the GATT-Agreement, Hungary became a member of the
so-called TRIPS-agreement (Agreement on Trade-related Aspects of Intellectual
Property Rights), which contains special provisions regarding the protection of
patents, too. Considering that the TRIPS-agreement was enacted in the form of
an Act in Hungary, its provisions are mandatory for any legal or natural person
(thus for the courts as well) and are to be applied indirectly. Main provisions
of the TRIPS-agreement to be applied for patent infringement cases (i.e.
Article 34 – Process patents, Burden of proof; Article 43 – Evidence; Article
50 – Provisional measures; etc.) are described in the related parts in detail.
New provisions of the Law No. LIII. of 1994 on Judicial Enforcement (described
under „Execution“ in detail), effective as of 1 September 1999 are of
definitive significance, while they promote the enforcement of decisions made
by courts concerning the infringement of intellectual property rights.
The Hungarian Patent Act provides the following remedies for patent infringement:
(1) Any person who unlawfully exploits an invention under patent protection commits patent infringement.
(2) The patentee may, according to the circumstances of the case, have recourse to the following civil remedies:(a) Request that the fact of infringement be declared by the court;
(b) Request an injunction in order to stop the infringement and enjoin the infringer to discontinue the infringement;
(c) Demand satisfaction from the infringer by way of a declaration or by other appropriate means; if necessary, the declaration shall be made public by the infringer or at the infringer’s expense;
(d) Claim that the infringer should provide data on the parties taking part in the manufacturing and distribution of the products concerned and on the business contacts established for marketing of such products;
(e) Demand restitution of the enrichment obtained by infringement of the patent;
(f) Request the seizure of the instruments used for the infringement and of the infringing products.(3) The court may rule, according to the circumstances of the case, that the instruments and products seized be divested of their infringing character or be auctioned according to the court procedure; in the latter case, the court shall fix the sum to be collected.
(4) Compensation may be obtained for damages caused by patent infringement under the provisions of the Civil Code.
It should be mentioned that the statutory statement of the facts of a patent
infringement originates also from the rules of the Civil Code that apply to
intellectual property and to the rights of intellectual property owners.
This is substantiated by the following pertinent regulations in the Civil Code.
Section 87 states:
(1) The person whose right to his intellectual product is violated – in excess of the protection defined by separate legal regulation (in this case the Hungarian Patent Act) – may have recourse to civil claims that are standard for violations of such personal rights.
(2) Within the scope of protection concerning intellectual products, and personal, commercial, technical or organizational know-how and experience of pecuniary value, that do not come under the protection of separate legal provisions, licensee may demand that the person appropriating or utilizing his achievements share the financial yields with licensee.
Section 84 of the Civil Code states:
(1) One whose personal rights are violated may have recourse to the following civil remedies, according to the circumstances of the case:
(a) Demand that the fact of infringement be declared by the court;
(b) Demand termination and discontinuance of the infringement;
(c) Demand satisfaction from the infringer by way of a declaration or by other appropriate means and, if necessary, demand that the declaration be given appropriate publicity by the infringer, or at his expense;
(d) Demand termination of the damaging circumstance and restoration of the status quo preceding infringement, either by the infringer or at his expense, and, furthermore, demand destruction of the article produced by the infringement, i.e., that it be divested of its infringing character;
(e) Demand compensation in accordance with the rules of civil responsibility.(2) If the amount fixed for damages is not commensurate with the seriousness of the culpable conduct, the court is entitled to impose upon the infringer a fine expendable on public purposes.
In general, the provisions of the Patent Act must be applied. The provisions for
damages of the Civil Code are applicable in cases of culpability only.
Since in order to establish the fact of patent infringement the infringing
device must include all the characteristics recited in the claim, the drafting
of such a claim is an extremely important task, the consequences of which may
be of unforeseeable significance. Both the Patent Act and the practice of
judging patent infringement suits are unequivocally claim-centered. The
description is solely of an explanatory character and, from the point of view
of a claim, in practice there is only a very limited scope for interpretation
of the claim based on the description. In a patent infringement suit when the
court examines the patent and analyses each characteristic recited in the claim
– be it a product or a process patent – it in fact examines which
characteristics realize the scope of protection of the patent. From the court’s
point of view, it is immaterial whether the litigants are manufacturers or
sellers, local or foreign. The main issue is the substance: whether or not the
infringement exists. Therefore, we must proceed from the applicable legal
provisions; the judicial custom is significant merely from the point of view of
the consequential issues, i.e., the established judicial custom can be
significant as an authoritative factor in passing judgment concerning the
extent and mode of compensation for damages and for enrichment attained.
Regarding the criminal sanctions, the Hungarian Penal Code contains pertinent
provisions, which are less practical and more theoretical in significance.
Section 329 reads:
(a) Whoever gives out another person’s intellectual product, invention, innovation, or industrial design as his own, thus causing financial loss to the rightful owner
(b) By abusing his scope of activity in an economic organization makes the exploitation or the enforcement of another person’s intellectual product, invention, innovation, or industrial design dependant on his receiving a share of the fee, gain, or profit earned thereon commits a criminal act and may be punished by imprisonment for up to three years.
The acts described in Section 329 (b) can be committed only by natural persons, not by corporations.
Moreover, the Hungarian Penal Code was completed with a new provision, the so-called “infringement of industrial property rights” as of 1 March 2000 (Penal Code Section 329/D), according to which
„Any person, who infringes by counterfeiting or by adopting the respective protected right based on patent, utility model, industrial design, topography, trademark or geographical indications protection of the right-holder thus causing damages, commits an offence.”
Manufacturers, dealers, sales representatives, and retail dealers, as well as users (excluding the consuming public), can be parties to a patent infringement suit. Thus, an action cannot be brought against the purchaser of an article produced by infringement.
In principle, the circle of those who can be named as defendants in a patent infringement is wide. From the point of view of the success or the failure of the plaintiff’s claim, however, the selection of the defendant is of no significance as to the merits. Not only the patentee but also the licensee whose name is recorded in the Patent Register, kept with the Hungarian Patent Office, is entitled to bring an action. In the event of patent infringement, the user may call upon the patentee to take appropriate action in order to put a stop to the infringement. If the patentee, within 30 days from the date of notification, fails to take action, the user recorded in the Patent Register may institute proceedings, in its own name, for patent infringement. Again it has no significance as to the merits whether the action is brought by the patentee or by the licensee, since the court decision is based on the facts of the case and not on the persons involved. Whether the patentee or the licensee should bring the action should be decided by the parties on the basis of their internal administrative or contractual circumstances, and in this respect the ensuing financial consequences can be significant (e.g., the saving of travel expenses and the ease of keeping in touch with the local attorney).
In Hungary there is no problem in selecting the proper court for hearing a case of patent infringement, since, partly on account of the relatively small size of the country and partly on account of the need for professional expertise, patent infringement actions are heard exclusively by the Metropolitan Court of Budapest. This exclusive jurisdiction also means that, because of the single appeal system, in such lawsuits the final and irrevocable decision will be rendered by the Supreme Court of Hungary. A bench consisting of three expert judges presides at the Metropolitan Court in the first instance. The chairman of the tribunal is a professional judge; the other two on the bench are a technical and a law specialist, respectively. The verdict is reached by the three judges by simple majority vote, which is then pronounced by the chairman. Thereafter, the decision is put in writing and delivered to the parties. Appeal is to the Supreme Court of Hungary. This court is composed of a three-member tribunal, each member being a professional judge. The Supreme Court of Hungary also reaches its verdict by simple majority vote, pronounced by the chairman. After pronouncement, the decision is put into writing and sent to the parties through the court of first instance. The verdict of the Supreme Court is final and non-appealable.
Essentially the scope of evidence that is utilizable and admissible in civil
actions applies also to patent infringement actions. Thus, documentary evidence
and the testimony of witnesses and experts are equally admissible, and personal
testimony given by the parties also falls within the scope of admissible
evidence. Such representations by the parties will be weighed during judicial
deliberation, although the subjective circumstances also will be taken into
account.
As a main rule, the burden of proof devolves on the plaintiff, however,
judicial authorities have the right to order the defendant to prove that the
process used by him/her is different from the patented process, if the
conditions described in Article 34 of the TRIPS-agreement (the product obtained
by the patented process is new, there is a substantial likelihood that the
identical product was made by the process and the rightholder has been unable
to determine the process actually used are fulfilled). Similarly Article 43
protects the interests of the plaintiffs as well, making possible for judicial
authorities to order the counter-party to present evidence that lies in its
control.
Although these provisions of the agreement provide the courts with necessary
competence, unfortunately these rules are not applied to the necessary extent
in Hungary.
Under Section 208 of the Hungarian Civil Procedural Law preliminary proof – if litigation is not started yet – can be requested for at the court competent on the basis of the address of the petitioner or at the court on the territory of which the proving can be carried out most practically.
Expert evidence is especially significant in patent litigation. There is no such thing as preliminary seizure, although, in principle, an interim order can be issued (e.g., for an interim seizure). Such an interim order has never been issued by a court, however. On the other hand, it is possible that, based on the opinion of the judicial expert appointed by the court, in the course of the trial the quantity and location of articles produced by an infringing process or of allegedly infringing articles will have been determined. This entitles the court when passing judgment – where the circumstances are appropriate and the patentee has established that a claim in the patent has been infringed – to order seizure and also destruction of the given quantity of articles. The expert appointed by the court is entitled to conduct an inspection of the defendant’s premises or elsewhere, if requested to do so by the plaintiff or if considered necessary by the court.
The Hungarian Civil Procedural Law allows a party to request a so-called preliminary evidence procedure if necessary prior to and independently to the court action. It is especially wise for the party contemplating institution of an infringement action to request this pretrial procedure if it is feared and likely that the evidence will not be discoverable later. In such cases the petitioner (future plaintiff) can set this preliminary evidence procedure into motion by filing a request with the state notary public against the addressee (future defendant) and by indicating the subject matter and location of the evidence. If the request is granted, an expert chartered by the Ministry of Justice will be appointed to handle this so-called nonlitigation procedure. On the basis of the state notary public’s appointment, the expert will examine the allegedly infringing product or process at the given location and will provide an expert opinion in the form of a report. The expert opinion, which is similar to the opinion provided by the expert chartered by the Ministry of Justice in the course of the actual litigation, essentially analyzes the circumstances surrounding the alleged infringement and may be a very significant means of proof in the litigation. Thus, this form of evidence, the preliminary evidence procedure, is of great significance, especially in infringement cases. It is also possible that resort to this procedure will render the institution of an infringement proceeding unnecessary.
Under Section 156 of the Hungarian Civil Procedural Law, courts have the right
to order a provisional measure in order to prevent a directly imminent damage
or to protect the petitioner’s right worth of extreme appreciation. Hungarian
legal rules regulating intellectual property rights – and so the Patent Act as
well – define the status of protection of rights of the right-holders –
however, these are effective only as of 1 July 1997.
Elements of the definition of “protection of rights” are: a) a registered
patent, b) the petitioner is the right-holder of the patent, c) the enforcement
of petitioner’s claims shall fall within 60 days of becoming aware of
infringement, d) the likelihood of the fact of infringement. Generally
speaking, the Metropolitan Court rarely orders a provisional measure in
litigation cases. The published decisions show more frequently the reasons for
not ordering a provisional measure (e.g. use of an own patent excludes
infringement, thus there is no
possibility for a provisional measure), and the explanation of the conception
of the imminent damage.
The next question that requires examination is whether it is possible to request some kind of preliminary injunction or interim judgment. Although the concept of interim judgment is known in the regulations of the civil legal procedure that apply to patent litigation, in practice the preferred course of action is to request the court proceed to determine the issue of patent infringement first in a separate proceeding. Thus, without incurring the additional expenses that an extensive trial of all issues would entail, the plaintiff can have the crucial question with respect to his or her legal rights adjudicated: Was there in fact an infringement of plaintiff’s patent? According to Hungarian practice, it is clearly possible in this context to request an interim or partial judgment. However, the granting of such request is discretionary with the court. Thus, the practical solution of requesting an interim judgment is justified in all infringement actions in which there is the slightest doubt as to whether or not the infringement has in fact occurred. It is expedient to institute the proceedings exclusively for the purpose of establishing the fact of infringement. In this case the court fees are payable based only on the so-called general value of the case, these fees being fixed by statutory provision. At the same time, the plaintiff should reserve all rights with respect to other claims, such as the claim for financial compensation for damages. This involves no substantial disadvantage because even in the course of an action to establish the fact of infringement, the plaintiff may ask the court, by extension of the action, to order seizure of the known quantity of articles produced by infringement and an assessment of the quantity of such articles prior to seizure. Furthermore, an injunction may be requested for the immediate discontinuance of the infringement. The only disadvantage of the above-discussed procedure is the added delay before final judgment, which, in the course of a subsequent action brought for establishing the defendant’s liability for damages, can be compensated for by obtaining an injunction ordering the defendant to pay interest on account of delayed payment.
The statement of a complaint for patent infringement is relatively unrestricted
by rules. Before filing a lawsuit, it is not obligatory for the plaintiff to
warn the defendant. At worst, failure to warn the defendant may result in the
plaintiff losing the costs of the proceedings, i.e., in the extreme case, if
the defendant, upon receipt of the writ of summons following institution of the
action, admits without delay the fact of infringement and concedes the merits
of the plaintiff’s case, the costs of the proceedings recoverable may be
reduced, or not determined at all, although the practical significance of this
is minimal. Since it is unlikely that the infringer will not defend itself,
there are no compulsory preliminary or interim procedures. The statement of the
complaint must be made in writing and must contain an exhaustive listing of the
plaintiff’s claims against the defendant. This detailed listing contains the
requests for the various civil remedies available to the plaintiff (see Section
II), i.e., such claims as the plaintiff chooses to enforce. As mentioned
earlier, if at the time of filing of the complaint, the plaintiff, in order to
economize on the costs of the proceedings, requests establishment of the fact
of the infringement only, then the plaintiff may reserve all rights with
respect to any claims he or she may wish to lodge in the future, so that it is
advisable to provide an exhausting listing of such claims in the complaint. So
long as the court of the first instance does not retire for deliberation, and
prior to that, so long as it does not close the proceedings, the complaint may
be supplemented at any time and in any respect. The pertinent representations
in supplementation of the complaint may be made to the court
either in writing or orally. The oral representation will, of course, be
recorded in the same manners as all the other incidents in the proceedings. In
the second instance, allowance is made only for upgrading or downgrading the
complaint; extension of plaintiff’s claims is not possible.
With respect to time limits, the statute of limitations in Hungary for patent infringement is generally five years. In addition, there are other time limits for responding to the court writs that are served in the lawsuit. These time limits are dependent upon the subject of the writ as well as upon the subjective circumstances of the responding party. In general, an answer to a writ of summons must be filed within 8, 15, or 30 days respectively, depending on the aforementioned factors. Nevertheless, in the case of a foreign litigant, the attorney representing the foreigner is entitled to request that a later date for responding be fixed and may request an extension of the term so fixed if circumstances require, i.e. due to the longer times required for communications between the local attorney and the foreign party.
The court may require that a foreign plaintiff (plaintiff domiciled outside of Hungary) deposit, when instituting proceedings, a security for costs unless international agreements between Hungary and the state of plaintiff’s domicile contain provisions to the contrary.
In cases of patent infringement, the parties may be represented by lawyers
(counsel) or patent agents. Foreign parties are required to be represented by
counsel or patent agents. Legal representation is not mandatory for Hungarian
residents at the Metropolitan Court, however, it is mandatory for the party
filing an appeal in a procedure at the Supreme Court – regardless whether he is
a Hungarian resident.
In practice, legal representation in infringement suits is always provided by
lawyers, while it is usually the role of patent agents to help the lawyers when
dealing with technical questions. The lawyers and patent agents mostly work in
cooperation to divide the workload.
The three-member court is presided over by a chairman. The chairman is the first person to pose questions. Questions may be put thereafter by the two other judges and then by counsel: first by counsel for plaintiff, then by counsel for defendant. An exception to this rule is the questioning of witnesses, where counsel for the party who called a witness has the right to question the witness first after the judges. All hearings are public except cases where the court excludes the public upon request of a party. Experts are appointed by the court from the Official List of Experts of the Ministry of Justice. Expert opinions submitted by the parties are simply treated as the testimony of pseudo-witnesses unless such expert opinions are handed over to an expert appointed by the court, in which case the declaration of the court-appointed expert with regard to these “private” expert opinions shall, insofar as embodied in the court-appointed expert’s opinion, be considered to be expert evidence by the court. Witnesses testify in person; no witness evidence is considered as such if submitted in writing. The consideration of witness testimonies in writing as proof is, according to the principle of freedom of evidence, subject to judicial discretion. Cross-examination in the sense that it is practiced in the Anglo-Saxon countries does not exists in Hungary.
The conduct of the trial is not prescribed by definite rules, with the exception of the most essential elements. After the complaint is stated by the plaintiff in the first session in response to the questions of the chairman, the plaintiff declares whether he or she intends to sustain the claims or wishes to modify them. The defendant then pleads in merito, after which the court determines in what order it wishes to hear the parties or, if it so rules, in which order it wishes to direct evidence to be taken (appointing experts, hearing witnesses, procuring documentary evidence ex officio, or calling upon parties to submit documentary evidence, etc.). The court is, of course – as in all civil proceedings – bound by the relief sought by the plaintiff in that its decision may not go beyond the limits of the relief sought and evidence heard may not overstep these limits. The court decides on all proposals to hear evidence individually and justifies its decision in the judgment.
The duration of the trial is not limited by law. Individual hearings, as well as the entire trial, take as much time as the court deems necessary. Neither the length of the hearings nor the duration of the trial is limited.
Two main types of costs must be considered. Legal costs consist of state duties (stamp duties), expert fees, and out-of-pocket expenses, whereas costs incurred by each party include attorney fees and out-of-pocket expenses. As to legal costs, court fees are 6 percent of the value of the claim in the first instance and 6 percent in the second instance (appeal) and a further 6 percent in the supervision procedure. The amount of the expert’s fees depends on the volume of the expert’s reports, the time spent in preparing these reports, and the expert’s out-of-pocket expenses. Other possible expenses include travel expenses, loss of income of witnesses (wages, salaries), etc. As regards attorney fees, the final fee is usually agreed on by taking as a basis either the value of the case or the time spent by counsel on the case. The two methods may be combined, the method of computation being essentially subject to the agreement of the parties. It should be emphasized, however, that stipulations based on “success” or on the bearing of risks by counsel are not permitted. The degree of complexity of the case may, however, be a factor that increases the fee.
Financial claims that may be submitted in a patent infringement case and the rights under which such claims may be raised have already been discussed. A financial claim may include lucrum cessans or damnum emergens or both.
Damages claimed may arise from probable losses actually sustained by plaintiff or damages the value of which may only be estimated, since in practice types of infringement cannot be defined individually because they arise in unlimited variety. One typical factor in the case of lucrum cessans is a claim to assess the infringer’s profits. Hereto belongs also that type of lucrum cessans where the damage arising as a result of a prejudice to the credit of defendant cannot be assessed. The damages assessed may include a lump sum and royalties usually stipulated in contracts based on patent rights. Such royalties may represent an amount of money usually due the patentee if such a contract has been drawn up with a licensee.
Damages are obtainable only in cases where the defendant is culpable. Culpability, however, is not a condition precedent to recovery of unjust enrichment from the defendant.
The hearing of evidence is closed upon the chairman’s declaration to this effect. The declaration is recorded in the minutes of the trial.
Prior to this declaration, the chairman puts the question to the parties as to whether they have any further evidence to present. If any one of the parties replies in the affirmative, the court confers and decides whether to order further evidence to be heard or to declare the hearing closed. If both parties or, in cases of more than two parties, all of the parties respond in the negative and the court, too, finds no cause to order further hearing of evidence, then, after a declaration of the court that the hearing is closed, the parties are invited to plead in merito. After the pleadings, the case is closed, the court withdraws, and after returning the court delivers its judgment. The judgment states not only the decision with respect to the existence of infringement (i.e., that the allegedly infringing article does fall within the scope of the patent claims, or that the case should be dismissed in view of the absence of infringement), but also, in a case where the infringement has been established, the amount of damages to be awarded, but always within the limits of plaintiff’s claim.
Either party is entitled to file an appeal. If no appeal is filed, the judgment
becomes absolute and final. The time within which the appeal must be filed is
15 days from the date of delivery by mail of the judgment. The appeal may be
minuted by the court or – and this is the general practice – it may be
submitted to the court in writing the said 15-day period in a form such that a
copy can be rubber-stamped (date stamped) by the court, or it may be sent by
registered mail before midnight of the last day of the 15-day period. An error
in the address is not prejudicial to the appealing party, but the mailing of
the appeal within the 15-day period, if called into question, must be verified
by a registration slip.
Should filing an appeal against the decision be possible, but none of the
parties exploited this possibility, then the decision shall be absolute and
final from the date following the day of the expiry of the term for appeal.
Enabling the parties to determine the exact date on which the decision became
absolute and final, the new provisions of the Hungarian Civil Procedural Law as
effective of January 1, 2002 prescribe that the chairman of the council acting
at 1st instance shall certify the final status of the decision by stamping a
clause onto the original copy of the decision and shall inform the parties on
same. (Section 230/A)
All court decisions on the merits of the case that are more than merely administrative in nature are subject to appeal. The decision appealed from is reviewed by the Supreme Court. Appeals against judgments are heard in open session. If the Supreme Court decides that the judgment appealed from is not fit to be modified or that extensive additional evidence must be heard in the second instance, it will remand the case to the court of first instance (i.e., the Metropolitan Court) and direct this court to reconduct the trial. If the hearing of new evidence does not require much time, it may be heard by the Supreme Court. The appeal is, however, mainly considered by the Supreme Court less from the point of view of issues of fact than from the point of view of issues of law.
The cost of an appeal amounts to 6 percent of the value of the damages claimed.
In addition to the duties paid in the course of the case in the first instance,
supplementary costs are to be paid if further hearings are ordered (local
inspection, additional expert’s reports, etc.) that involve further costs.
Attorney fees on appeal (if the amount of the claim has been agreed to as the
basis over and above the out-of-pocket expenses incurred) amount to 50 percent
of the fees agreed to in the first instance. If the time factor also figures in
the agreement, this, too, will be considered.
The appeal procedure in Hungary may be generally characterized as a
“cassation-revision” procedure.
Either party is entitled to file a request for supervision procedure of the Supreme Court within 60 days of receipt of the final judgment on the basis of breach of law, giving reasons for the same in the request. Legal representation is mandatory in these procedures and the duties to be paid amount to 6 percent of the value of the claim.
The defendant’s pleading may take a great variety of forms, and the Hungarian judicial practice is also very varied in this area. No advantage is gained from being Hungarian, and a Hungarian party is in no way in a more favorable position than a foreign party.
Counsel for defendant, upon receipt of the complaint, first determines whether the plaintiff has any legal right to institute proceedings. In this connection, defendant’s counsel also considers whether plaintiff has sufficient legal interest in the case (i.e., is a patentee, licensee, etc.). It is also expedient to consider the possibility of prescription or whether defendant has a legal right to a compulsory license or is otherwise authorized to use the patent in question. It should also be determined whether defendant has a prior user’s right. The right of the prior user exists in all respects, i.e., in cases both of product and of process patents, if the defendant can prove that he or she was using the product or process before plaintiff’s priority date. Then, by simply referring to this fact, the defendant will be able to successfully defend the case. Furthermore, the merit of plaintiff’s complaint should be examined, accompanied, necessarily, by detailed technical discussions with the defendant and involving, if necessary, a patent agent or other experts versed in the protection of intellectual property. It should be emphasized that in accordance with Hungarian legal practice, to establish an infringement all characteristics of the allegedly infringed claim must be included in the defendant’s manufacturing process.
Several experts in Hungary have been engaged in a controversy concerning the problem of equivalency. Quite a number of them are of the opinion, also sounded in the technical journals, that the doctrine of equivalency should be judicially applied, since to replace one characteristic of the claim by some trivial solution may render the avoiding of infringement simple and easy. Another group of experts, however, emphasizes that experts should give more care to the construction of the claims. The latter group asserts that practical application of the doctrine of equivalency would be harmful and that the vague borderline dividing equivalency and noninfringement would result in greater legal uncertainty than if the courts were to adhere strictly to the language of the individual claims. On July 1, 1983, the application of the doctrine of equivalency was codified, and this practice has not been changed under the Patent Act of 1995.
If the defendant denies the validity of the plaintiff’s patent, the defendant must institute a nullity proceeding in the Patent Office.
Instituting a nullity proceeding may serve as a basis for suspension of the
action of infringement. Although according to the Hungarian Civil Procedural
Law suspension is subject to judicial discretion, it became automatically
lately. Recognizing the dangers of this, the Supreme Court indicated in one of
its occasional decisions that starting of a nullification procedure cannot be
an automatic ground for suspension, in course of the judgement of the
suspension the interests of the plaintiff should be considered as well, since
the plaintiff’s appreciable interests may be endangered to a higher extent than
those of the defendant especially considering the length of a nullification
procedure.
In the case of a successful claim for nullification, the court dismisses the
action of infringement forthwith since the legal claim has been based on an
invalid patent and was therefore unfounded.
The traditional possibility for legal remedy against the decision of the Patent
Office in a nullification procedure – which may concern the status of the
patent – is a request for a change of the decision by the court. For the
judgement of such requests for a change the Metropolitan Court has an exclusive
jurisdiction.
Under the original concept of the Act No. XXXIII. of year 1995 on Patent
Protection of Inventions, which became effective as of 1 January 1996 there was
a possibility to file an appeal against the decision of the Metropolitan Court,
then, following the procedure of appeal a request for supervision could be
filed as well. This two instance procedural order was changed as of 1 January
1999: under these new provisions only a request for supervision could be filed
against the decision of the Metropolitan Court. The Act No. CV. of year 2001
restored the original conception as effective of January 1, 2002: filing an
appeal against the decision of the Metropolitan Court exists again as a legal
remedy, which may be followed by a procedure of supervision, however, the
provisions of supervision were tightened to a great extent.
A field connected to the validity of patents is the question of the remuneration of inventors to be paid by the patentees upon the utilization/realization of service inventions. According to the main rule of the Patent Act, the inventor shall be entitled to remuneration, proportional to the enrichment achieved by the patentee in case of each utilization or each licensing of utilization or transfer of ownership of the patent. Under the modification of the Patent Act by Act No. XLVIII. of 2001 as effective of January 1, 2002 such an agreement on remuneration of service inventions could be concluded between the parties (employer/future patentee and employee/inventor) in which the parties establish a certain amount of remuneration regarding the inventions of the inventor to be realized in the future (so-called agreement on remuneration of service inventions containing risk sharing).
The status of the defendant is in no way transferable to a third person even if a foreign defendant wants to transfer it sub titulo by having a local subsidiary or importer named as defendant. It is the plaintiff’s prerogative to decide who will be the defendant.
In a patent infringement action in Hungary, no importance is attached to the defendant’s nationality, whether Hungarian or foreigner, save, perhaps, with respect to the fixed terms for responding to a judicial summons. A longer term is fixed for a foreigner, partly because of the longer time periods required for communicating with the other party. Furthermore, a foreign party, if wishing to be heard in person, may request the court to appoint an interpreter.
During the course of a patent infringement, judicial acts ordering inspection by experts or distraints should not be obstructed by the defendant. If, however, they are hindered by the defendant, such acts on the part of the defendant will be prejudicial to his or her case.
The notices served by the plaintiff on the defendant and those served by defendant on plaintiff, as well as their replies, are not bound by formality. However, it is always expedient to touch on all possible circumstances in those communications. As mentioned above, with respect to notices made prior to submitting the complaint, the exchange of letters has no material importance and the absence thereof does not release either party from its obligations. It may, however, influence the amount of recoverable fees.
Defendant is not obliged to support the defense by proofs since the burden of
proofs is on the plaintiff. The defendant will win the lawsuit if the plaintiff
is unable to satisfy this burden. In the case of process patents, if the method
of production of an article is at issue, the article thereby produced is
presumed to have been produced by the patented process unless, of course, other
known methods exist to produce the article in question. If the defendant wishes
to introduce evidence, he or she is entitled to do so in the same way as
plaintiff, until the court closes the case.
If the counterclaim is asserted by the defendant, the claim, if within the
scope of infringement, may be presented to the court of first instance before
the court closes the case. The defendant may also assert that entitlement to a
compulsory license under the plaintiff’s patent.
In the case of a judgment against the defendant, depending on the court’s
disposition, the decision will refer to the amount of damages awarded to the
plaintiff, to performances in kind, to sequestration, to destruction of
objects, to plaintiff’s legal fees, and to dues to the state. These obviously
also include all costs advanced or incurred, as well as the fees of experts
appointed by the court.
At the request of the plaintiff, the court may order compulsory execution in
the event that the defendant does not fulfill the obligations as set forth in
the judgment. Execution against the defendant is enforceable by the assistance
of independent bailiffs appointed to the courts, which is subject to further
fees and costs.
As effective of September 1, 1999, the Act on Judicial Enforecement was modified in order to shorten the length and to promote the success of the enforcement procedure in infringement cases. According to Section 184/A of the Act on Judicial Enforcement „if the fulfilment of an action is necessary in order to enforce a decision passed in a litigation procedure based on patent infringement, the court calls upon the obligant for voluntary fulfilment with a 3-day deadline.
In lack of the obligant’s voluntary fulfilment, the enforcement officer is entitled to call upon the obligant for immediate fulfilment, moreover a fine may be imposed on the obligant. If the decision contains hand-over / delivery / distraint of moveables, the enforcement officer distrains these and should the obligant hinder him in it, s/he is entitled to realize the enforcement with the help of the police.
At the request of one or both of the parties, but in any case with the consent of both parties, the case may be stayed in all phases. In the second instance, however, this may be done only once. Also, the case may be discontinued if plaintiff fails to further prosecute the action at any point, in which case the defendant may demand reimbursements for legal costs. The defendant can bring a halt to the lawsuit only by acknowledging liability, which, however, would entail the obligation not only to honor plaintiff’s claims, but also to pay all costs as assessed by the court.
The amount of attorney fees and other legal costs cannot be estimated prior to suit in the absence of detailed knowledge of the facts of the particular case. Part of the attorney fees are usually paid in advance, legal costs are paid in advance obligatorily, and the costs of certain judicial acts (e.g., expert’s fees) must, in general, be advanced by the plaintiff. In exceptional cases, however, the court may require the defendant to advance these costs if, taking all factors into account, the court determines that it is more expedient to do so. Any attorney fees paid by the losing party directly to the adverse party’s attorney must be passed on to the client if the client has already paid the attorney, provided that the amount of such costs awarded does not exceed the actual attorney fees, in which case the attorney is entitled to the excess.
Until the 1960s, the number of patent infringement suits in Hungary was very small. In more recent years, however, the number of such suits has been steadily increasing owing, probably, to the economic growth and market economy of Hungary. Consequently, the judicial practice and the judgments passed show an increasingly diverse picture.
Prepared by:
Dr. Attila Bogsch
Attorney at Law