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Enforcement through the courts

At trial
What level of expertise can a patent owner expect from the courts?

The Budapest Metropolitan Tribunal (which has exclusive competence) decides patent issues in a panel of three judges. Two of the judges must have technical university degrees or equivalent qualifications. They have a reasonably high level of expertise and generally consider and reason their decisions diligently.

The Metropolitan Appeal Court also adjudicates patent issues in a panel of three judges, although these judges have no technical qualifications. Consequently, appeals consider less technical details and more legal issues. Further, although the appeals court can appoint court experts to clarify technical issues, it rarely does so.

Are cases decided by one judge, a panel of judges or a jury?

A panel of three judges decide cases.

If jury trials do exist, what is the process for deciding whether a case should be put to a jury?

Jury trials do not exist for patent litigation. 

What role can and do expert witnesses play in proceedings?

Parties may present expert witnesses and the courts can appoint court experts who are registered in an official registry. Statements from the parties’ expert witnesses are formally considered to be the same as the statements of the interested party, although they are somewhat more influential for the court due to the reputation of experts. Court-appointed experts are considered non-partial, although their statements may be challenged by the parties. The cost of court experts is usually advanced by the interested party – typically the claimant – and borne by the losing party. If a party unnecessarily motions to appoint a court expert or collect further evidence, the court may order it to bear the costs of the unnecessary actions, regardless which party succeeds.

Does your jurisdiction apply a doctrine of equivalents and, if so, how?

Hungary applies a doctrine of equivalents. According to Article 24(4) of the Patent Act, to determine whether the patent protection extends to a product or process, due account must be taken of any characteristics of the product or process which are equivalent to those specified in the claims.

Is it possible to obtain preliminary injunctions? If so, under what circumstances?

Preliminary injunctions can be obtained. In patent litigation, provisional measures (until the contrary is rendered probable) are considered necessary to protect the plaintiff’s rights if the plaintiff proves that the invention is patented and it is the rights holder or an exploiter entitled to institute proceedings for infringement.

The provision relating to the necessity of protecting the plaintiff’s rights will not apply where:

  • six months have elapsed from the beginning of the infringement; and
  • 60 days have elapsed from the date on which the plaintiff became aware of the infringement and the identity of the infringer.

The court will use its discretion to evaluate the balance of interest of the parties when granting preliminary injunctions. Security deposits are usually requested. Further, the courts will also consider whether the measures obviously and considerably prejudice public interest or the legitimate interests of third parties.

The party requesting the preliminary injunction may request all remedies applicable to patent infringement. However, the courts always consider the provisional character of the remedies and will avoid granting claims where the injunction would cause irreversible detriment to the potential infringer (eg, provision of information).

How are issues around infringement and validity treated in your jurisdiction?

Hungarian courts generally follow a bifurcated system. If the validity of a patent is challenged via a revocation action during or before patent infringement proceedings, the infringement proceedings will be suspended until the revocation action is adjudicated with final effect. This does not affect preliminary injunctions.

Will courts consider decisions in cases involving similar issues from other jurisdictions?

The courts will consider foreign decisions, although they are not binding. According to Article 104 of the Patent Act, during preliminary injunction proceedings all circumstances of the case will be considered – in particular, if the patent was revoked by the IP Office or by the court of first instance and, in the case of a European patent validated in Hungary, if it was revoked by the European Patent Office or in another member state of the European Patent Organisation.

Damages and remedies
Can the successful party obtain costs from the losing party?

Court costs are generally borne by the losing party. These costs may be proven by filing the corresponding invoices or are established by the court ex officio. The court tends to mitigate the costs claimed by parties (even though they are certified by invoices) if it considers that they are exaggerated compared to the complexity or value of the case.

Where the winning and losing party cannot be established clearly (eg, where the rights holder voluntarily abandons a claim during a revocation procedure), the court may decide that the parties must bear their own costs.

What are the typical remedies granted to a successful plaintiff?

Court costs are generally borne by the losing party. These costs may be proven by filing the corresponding invoices or are established by the court ex officio. The court tends to mitigate the costs claimed by parties (even though they are certified by invoices) if it considers that they are exaggerated compared to the complexity or value of the case.

Where the winning and losing party cannot be established clearly (eg, where the rights holder voluntarily abandons a claim during a revocation procedure), the court may decide that the parties must bear their own costs.

What are the typical remedies granted to a successful plaintiff?

According to Article 35 of the Patent Act and the circumstances of the case, a rights holder may have recourse to the following civil remedies:

  • declaration of infringement by the court;
  • injunctions against the infringer to cease the infringement or any acts directly threatening the patent;
  • provision of information on the infringement;
  • satisfaction by way of a declaration from the infringer (possibly public);
  • surrender of the enrichment obtained by the infringement; and
  • seizure, transfer, recall and definitive removal or destruction of the infringing products, as well as the means and materials used for infringement.

Where a patent is infringed, the rights holder may also claim damages under the rules of civil liability.

Plaintiffs generally claim all of these remedies, if applicable.

In preliminary injunctions, the courts are usually hesitant to grant claims for the provision of information due to the protection of business secrets and because this action is irreversible, even if the patent is ultimately found invalid. 

How are damages awards calculated? Are punitive damages available?

It is important to differentiate between the reimbursement of enrichment and civil law damages.

Reimbursement of enrichment (Article 35(2)(e) of the Patents Act) may be claimed pursuant to the Patent Act. The plaintiff must prove that the defendant gained its enrichment due to the patent infringement. Claimable enrichment (profit) is calculated by deducting the costs from the total turnover obtained through the unlawful exploitation of the patent (eg, by selling the product embodying the patent). No further circumstances are considered.

Damages may be claimed pursuant to the Civil Code (Act V/2013). Any person that causes damage to another person will be liable for the damage. The damaging party will be relieved of liability if it can prove that its conduct is not actionable.

According to Article 6:522 of the Civil Code, the damaging party must compensate the aggrieved party for all of its losses in full. Under the principle of the right to full compensation, the damaging party must cover:

  • any depreciation in value of the property of the aggrieved party;
  • any pecuniary advantage lost; and
  • the costs necessary for the mitigation or elimination of the financial losses sustained by the aggrieved party.
     

In practice, this means that the defendant has more grounds to be exempted from paying damages, but that further amounts may be claimed beyond the profit already gained by the defendant (ie, prospective profits).

Punitive damages are not available. In exceptional cases, the court may award compensation in an amount that is lower than the amount of the total loss (Article 6:522 (4) of the Civil Code).

No solid legal practice regarding damages for patent infringement exists. This is because parties usually settle before a final decision is handed down.

How common is it for courts to grant permanent injunctions to successful plaintiffs and under what circumstances will they do this?

In practice, once patent infringement is established by the courts, an injunction is granted. However, theoretically, it should not be an automatic legal consequence, as there is no corresponding provision in the Patent Act.

Timescale and costs
How long does it take to obtain a decision at first instance and is it possible to expedite this process?

The Budapest Metropolitan Tribunal will issue first-instance patent infringement decisions in between one and a half and five years. Many factors influence this broad timeframe – in particular, whether the defendant uses an invalidity defence, in which case the infringement suit is stayed until final adjudication of the revocation action. Further factors may influence the length of procedure, including:

  • whether court experts are needed;
  • the parties’ activities (ie, whether they have filed many writs); and
  • availability of evidence (the courts often allow deadline extensions, particularly if one party is a private person).

Court procedures for patent infringement may not be expedited. However, by law, preliminary injunctions must be adjudicated in an expedited procedure and have strict deadlines. A first-instance decision usually takes between two and four months.

How much should a litigant plan to pay to take a case through to a first-instance decision?

Actual costs vary greatly, depending on the circumstances of the case. Generally, rights holders should budget between €20,000 and €80,000, depending on:

  • the complexity of the arguments;
  • translation requirements; and
  • the use of expert witnesses.

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