Changes to experimental/trial exemptions
Amendments that concern parallel proceedings for European patents validated in Hungary
Amendments concerning enforcement of patent rights
Other amendments
On 11 November 2021, the Hungarian Parliament accepted a substantial amendment to the Patent Law. This article provides a detailed report of the upcoming amendments, which will become effective from 1 January 2022 and shall be applied in proceedings started after this date.
This article is the detailed version of a previously published summary report about the upcoming amendments.
Changes to experimental/trial exemptions
The new text of the Patent Law with regard to experimental/trial exemptions reads as follows. The newly added text is shown in bold:
(6) The exclusive right of exploitation shall not cover:
(a) acts performed for the purpose of private use, and/or being outside the sphere of economic activities;
(b) experimental procedures in connection with the subject matter of the invention;
(c) experiments and research as well as related acts necessary for the authorization of the distribution of a medicinal product in the territory of the European Economic Area or in a third country, including in particular manufacturing, using, distributing, offering for sale, keeping stocks of, importing or exporting, regardless whether the acts are performed directly by the applicant for the authorization or by another person with an economic relationship with the applicant.
(d) the non-regular preparation of a medicine - upon a doctor's prescription - in a pharmacy, and any further procedure in connection with the medicine thus prepared. (Emphasis added.)
The text shown in bold below was removed from subparagraph b:
(b) experimental procedures in connection with the subject matter of the invention including experiments and research necessary for the authorization of the distribution of a product that is considered a new invention or a product that is produced by a technology that is considered a new invention. (Emphasis added.)
The replacement of the short exemption list in the old subparagraph (b) with the detailed listing of the grounds of the exemption in the new subparagraph (c) complies with Directive 2001/83/EC on the Community code relating to medicinal products for human use.
The amendment clarifies the previously vague scope of the provision, which might have caused uncertainty on behalf of both the patentee and the implementer. However, it is also clear that Hungary has now joined the countries that allow a broad Bolar exemption with clear conditions.
Amendments that concern parallel proceedings for European patents validated in Hungary
To eliminate parallel proceedings before the national tribunals and before the European Patent Office (EPO), an amended version of article 84/M(2) of the Patent Law has been introduced. According to this amendment, if a national nullity proceeding has been launched against a validated European patent in especially justified cases, such proceeding can be suspended until the final termination of an opposition against the European patent or the nullity or limitation of the European patent has been requested based on the European Patent Convention.
Amendments concerning enforcement of patent rights
Background
In Hungary, prior to the amendment, patent infringement and invalidity actions against patents are decided in strictly separate proceedings (and by different authorities, since revocation actions start before the Patent Office while infringement proceedings start at the court). In patent litigation lawsuits, the alleged infringers practically always challenge the validity of the ruling patent(s).
Consequently, infringement proceedings on the merits are mostly suspended before the court until the end of the revocation proceeding, which sometimes takes between four and seven years under the respective rules and practice. Therefore, patent owners often seek preliminary injunctions to protect their market while the main action is pending. However, the granting of such injunctions requires the fulfilment of several difficult conditions, which prevents their use. On the other hand, in preliminary injunction proceedings, the court does not examine patent validity challenges, which might lead to injunctions being given up because of the invalidation of the ruling patent. Therefore, via both routes, there are portions of the existing proceedings that prevent an efficient and fast solution being reached. The amendment constitutes a first substantial step in the right direction, but it has not yet solved all of the problems.
Introduction of counterclaims for revocation of ruling patent in infringement lawsuits
As a first step, the exclusive right of the Hungarian Intellectual Property Office (HIPO) to decide as a first-instance authority on the nullity of patents as set forth in article 44(2)(c) was set aside and an exception was defined – namely, when the nullity request was filed as a counter claim in a proceeding directed to the establishment of a patent infringement before the competent court.
To prevent parallel nullity proceedings running before both the court and the HIPO, two new subparagraphs were added to article 80 of the Patent Law:
(6) in case following the request for the establishment of the nullity of a patent filed in the framework of a counter claim before the court a nullity request filed before the HIPO against the same patent, this proceeding should be suspended until a final decision is made in the court proceeding in which the counter claim was filed.
(7) The nullity request will be rejected by the HIPO if in the counter claim proceeding the court has finally rejected the patent based on identical factual grounds.
By these amendments, a nullity request filed at the HIPO after the request before the court cannot interfere with the court proceeding.
The filing of a counterclaim in a patent infringement lawsuit is made possible by a new paragraph (1a) of article 104 of the Patent Law, according to which the defendant of a patent infringement lawsuit can file a nullity claim before the same court against the validity of the patent:
(a) if according to his position the grounds for nullity as defined in Article 42 (1) or Article 84/N (1) are at hand and
(b) for the nullification of the same patent based on identical factual basis there is no ongoing proceeding and no final decision had been brought in the subject of the nullification.
A new paragraph (1b) of the same article states that if the counterclaim is submitted in a lawsuit into which the owner of the concerned patent is not a party, the owner should be invited as a party to the proceeding.
Conditions when counterclaims cannot be used
If a nullity request was filed with the HIPO before the filing of a counterclaim, the old system remains in force. This is a regrettable part of the new amendments as it provides an escape route for potential infringers that might wish to extend the duration of an enforcement lawsuit as long as possible, because then they can start a revocation proceeding before the HIPO prior to the start of an infringement lawsuit. Upon such conditions, the existence of an ongoing nullity proceeding will prevent the possibility for the court to decide on the validity of the patent in a counterclaim.
This position is supported by the following new subparagraph of article 104 of the Patent Law:
(c) In the lawsuit initiated for establishing a patent infringement the court should reject the counter claim directed for the revocation if the conditions defined in paragraph (1a), subparagraph b) as cited above are met.
Procedural amendments when counterclaims are filed
A previously started and still-ongoing nullity proceeding initiated before the HIPO is a ground for the suspension of the patent infringement proceeding, as defined in the following new paragraph of article 104:
(d) If the defendant of a lawsuit initiated for the establishment of a patent infringement proves that he has initiated a nullity proceeding against the same patent at the HIPO prior to the filing of the subject lawsuit then the patent infringement proceeding should be suspended till the final decision of that nullity proceeding. In case the lawsuit for patent infringement was launched based on a European Patent validated in Hungary, in case there is an ongoing opposition against the European Patent, then based on the position of the court the patent infringement proceeding can be suspended when such appears very justifiable.
The subparagraphs 1(e), 1(f) and 1(g) of article 104 are of procedural and administrative nature. It is worth mentioning that subparagraph 1(g) specifies that, in patent infringement lawsuits, the court should apply an accelerated proceeding if the defendant has launched a counterclaim for the revocation of the patent.
With regard to accelerated proceedings, subparagraph 1(h) of article 104 has defined further conditions that concern experts ordered in the proceedings. It states that an expert opinion should be provided within 30 days of a request for an opinion being delivered to the expert and, in case of a delay, the court can decrease the expert's fee or entrust another expert with appropriate expertise.
Amendments concerning preliminary injunction proceedings
The amendment has changed article 104(2) of the Patent Law substantially, as follows:
(2) In lawsuits initiated for the establishment of patent infringement the petitions for preliminary injunctions should be regard pursuant to point d) paragraph (1) of Article 103 of the Law for Civil Procedures as a ground deserving special appreciation unless the contrary is made likely, if the claimant certifies that the invention is protected by a patent and he is the patentee of a licensee who has obtained right to act in case of infringement. When the contrary is made likely, all circumstances of the case should be taken into account including the evidences submitted in the counterclaim filed by the defendant or in the counterclaim against the petition for preliminary injunction initiated pursuant to Article 104, paragraph (4). Furthermore the court has to consider if the patent has been nullified by the HIPO or by the first instance court, or revoked by the Opposition Division of the EPO in case of a European Patent validated in Hungary, or it has been nullified in another member country of the European Patent Organization. The reference to the ground deserving special appreciation cannot be used if since the start of the patent infringement more than 6 months have been elapsed or if the knowledge on the infringement and on the person of the infringer 60 days has been elapsed.
The new aspects of this paragraph are the reference to the counterclaim proceeding and the fact that the court can take into account serious doubts against the validity of the patent from other proceedings.
A new subparagraph (2a) has been introduced in article 104 as follows:
(2a) in a lawsuit initiated for the establishment of patent infringement or if a preliminary injunction was ordered before the start of the lawsuit on the basis of the request of the defendant the preliminary injunction should be set out of effect in case the patent that has constituted the basis of the lawsuit:
(a) has been nullified or ceased to exist,
(b) the patent protection of the European Patent for Hungary was terminated or nullified,
(c) if in the decision of the HIPO or in the first instance decision of the court the patent has been fully revoked or partially revoked so that it excludes the occurrence of the infringement.
A new paragraph (12a) was also inserted in article 104 of the Patent Law:
(12a) If during the lawsuit the court establishes that the request for preliminary injunction has lost its grounds upon request the court obliges the claimant of the preliminary injunction to compensate the damages caused by the preliminary injunction to the adverse party. In the lawsuit the lack of grounds of the preliminary injunction can be established especially in case:
(a) the patent or the validity of the European Patent has become nullified for the territory of Hungary,
(b) because of the acts of the plaintiff or negligence thereof the preliminary injunctions has become ineffective, or
(c) the court establishes that no patent infringement has taken place and based on the available evidences according to the position of the court there is no directly threatening danger for the occurrence of a patent infringement.
These new amendments provide measures that might compensate the damages caused by a preliminary injunction when it proves to be groundless and have broadened the conditions that indicate when the effect of a previously ordered preliminary injunction is likely to have ceased to exist. In light of these amendments, patentees have to exercise a higher degree of caution when claiming a preliminary injunction.
Furthermore, paragraph (14) of article 104 of the Patent Law has been amended as follows:
(14) for the delivery or return of the deposit or counter deposit as defined in point c) of paragraph (5) or in paragraph (6) or paragraph (13) of Art. 104 of the Patent Law the rules of the Law on Civil Procedures concerning deposits should by applied with the conditions that:
(1a) the court has made an order beside the decision on the merits on the return or delivery of the deposit or counter deposit when establishing the termination of the preliminary injunction, and
(b) the return of the deposit provided according to paragraph (13) should be effected even if the return of the damages has also been ordered pursuant to paragraph (12a).
These amendments clearly serve the interests of the parties.
A new article 69/B has been introduced in the Patent Law, according to which, on the request of the applicant, the competent international searching authority (as defined in article 15(5) of the Patent Cooperation Treaty) will carry out an international type search.
For further information on this topic please contact Michael Lantos at Danubia Patent & Law Office LLC by telephone (+36 1 411 8700) or email ([email protected]). The Danubia Patent & Law Office LLC website can be accessed at www.danubia.hu.