In Hungary, preliminary relief against patent and trademark infringement is available via preliminary injunctions. This article discusses the key features of preliminary injunction proceedings in patent and trademark cases and explores how they are used in practice.
The primary condition for such relief to be granted is that the probability of infringement can be demonstrated. The court does not take into account whether a revocation or non-infringement proceeding is in progress when establishing the probability of infringement. This probability must be demonstrated at a high level and be based on a comparison of the patent claims and the allegedly infringing product or process. If a probability of patent infringement is established, the court examines whether any of the following conditions are met:
- the plaintiff's special need for legal protection;
- the need to avoid directly threatening damages; and
- the need to maintain the status quo.
The first two requirements are the conditions that are most commonly referred to in patent proceedings. With regard to the plaintiff's need of legal protection, a presumption exists in favour of the patentee or licensee if the preliminary injunction is filed within 60 days of finding out about the infringement and no more than six months after the commencement of the infringing activity. However, the defendant can object to this presumption and the court will take such an objection into account, particularly if the patent has been invalidated at first instance or if the legitimate need of third parties or the public interest is against the ordering of the preliminary injunction. So far, the courts have never relied on public interest as a reason to deny a preliminary injunction.
Features of preliminary injunction proceedings
If any of the aforementioned conditions are met, the court compares the advantages and disadvantages achievable by a preliminary injunction as argued by the parties. The Code of Civil Procedure states that the detriments caused by a preliminary injunction must not outweigh the achievable benefits. The court may require the plaintiff to provide a security deposit in return for receiving a preliminary injunction. The need for such a deposit and the amount thereof is decided by the court. Urgency is not a basic condition of a preliminary injunction; however, ex parte injunctions are available only where urgency is a special condition.
In the framework of a preliminary injunction proceeding, the petitioner can raise further claims, the most important of which concern the business sources and turnover relating to the infringing activity. In special circumstances, the court may freeze the infringer's account. However, it would appear that such a decision has never been made.
Additional features of proceedings for preliminary injunctions include the following:
- There is no need to send a warning letter in advance.
- A decision on a preliminary injunction becomes effective immediately. Any appeal filed against such a decision does not suspend the execution thereof.
- Where a decision is issued and the petition was filed prior to the launch of a patent infringement lawsuit, the lawsuit must be started within 15 days of the decision.
- Where a petition has been rejected owing to non-compliance with a condition or the vague nature of the evidence submitted, the petitioner can file a new petition in which the failures of the previous petition are corrected. Another petition can also be filed if the circumstances have changed. It is often more advisable to file a new petition than to appeal.
After filing a petition for a preliminary injunction, it takes between three and six months to reach a decision. The law sets out a much shorter term, but the court counts this term from the date on which the parties have duly complied with all of the requirements and responded to the court's potential questions.
Appeals against preliminary injunction decisions are similar to those of standard proceedings. However, appellate court decisions are final and parties cannot turn to the Supreme Court.
Use of preliminary injunction proceedings
In patent and utility model cases, the court tends to be reluctant to issue preliminary injunctions. To obtain such a decision, the petitioner must make it likely or clear that the patent claims cover the infringing product (or method) and that there is a real need to stop such illegal activity.
In practice, ex parte proceedings are rare; the court prefers hearing the parties before issuing a preliminary injunction.
Features of preliminary injunction proceedings
The basic conditions for granting a preliminary injunction are the same as those for patents; therefore, this section will deal only with the differences compared with patents.
After filing a petition for a preliminary injunction, it takes between two and five months to reach a decision.
As with patents, preliminary injunction decision can be appealed in a similar way to standard proceedings, and appellate court decisions are final. The filing of an appeal does not defer the effect of an injunction.
Use of preliminary injunction procedures
In trademark cases, the court frequently issues preliminary injunctions and, in the majority of cases, this solves the problem as the infringer disappears or stops infringing. The payment of a security deposit is rarely requested in trademark-related cases, unlike in patent cases. This may be because it is easier and safer for the court to foresee the outcome of trademark infringement. Nevertheless, ex parte proceedings are rare; the court prefers hearing the parties before issuing a preliminary injunction.
A preliminary injunction was granted in a recent exemplary case.
The claimant was the owner of Hungarian Trademark 139055 (Figure 1).
Figure 1: Hungarian Trademark 139055
The term in small letters to the left of the mark, "magyar", means "Hungarian". The term in large letters to the right of the mark, "BAZÁR", means "bazaar". The protection of the trademark was granted for goods in Class 16 (newspapers) and Class 35 (publicity).
The defendant published an advertising paper with the title "keleti BAZÁR", which means "eastern bazaar".
The claimant sued for trademark infringement and requested a provisional injunction. The defendant requested refusal and said that he had filed a trademark application for the title of the advertising paper. Further, he said that he filed a decision of the Ministry of Culture on the registration of the advertising paper. He also argued that the appearance of the two signs was different.
The Metropolitan Tribunal prohibited the defendant from using "keleti BAZÁR" as the title of its advertising paper. The Court found that there was a likelihood of infringement since the dominant element of both signs was the word "BAZÁR", upon which the distinctiveness was granted. The Court considered that the term "keleti" in the title of the advertising paper had only a secondary importance considering the size of letters and that consumers could have been led to believe that the two signs belonged to the same owner. The class of the claimant's mark and that of the defendant's title were not discussed.
The defendant filed an appeal against the decision with the Supreme Court. The appeal was dismissed. The facts stated by the Metropolitan Tribunal were correct. From the documents filed, it could clearly be established that the two signs were confusingly similar in the eyes of the consumers. Moreover, the fact that the defendant had proved no financial disadvantage was referred to, which is required by the Civil Procedural Law (pf IV 25 769/2001).
For further information on this topic please contact Alexander Vida or Michael Lantos at Danubia Patent & Law Office LLC by telephone (+36 1 411 8700) or email ([email protected] or [email protected]). The Danubia Patent & Law Office LLC website can be accessed at www.danubia.hu.