Maximising value of European patents validated under the London Agreement

Introduction
Problem
Proposed solution
Comment

Introduction

Hungary has been a member of the London Agreement since January 1 2011 and some practice has already accumulated with regard to European patents validated under the agreement. The amendment of Hungary's Patent Law, which took effect on the same date, allowed European patents granted with an English description to be validated in Hungary upon submission of a Hungarian translation of the claims alone. The granting and printing fee is calculated on the basis of the combined length of the printed English description, the drawings and the Hungarian claims. In the case of a patent granted with a description in either French or German, the rights owner has the option of submitting an English or Hungarian translation of the description and adding a Hungarian translation of the claims. The printing fee is calculated according to the same principles, irrespective of the original language of the description - that is, on the total length of the disclosure (for further details please see "Validation of European patents under London Agreement").

Problem

The amendment to the law does not allow for:

• the submission of a Hungarian specification if the European patent was granted with an English description; or
• any later submission for publication of the Hungarian translation of the description.

Thus, the first date on which full Hungarian disclosure can effectively be submitted is the date on which enforcement proceedings or national proceedings concerning the validity of the patent are initiated. This is foreseen in Hungary's accession regulations to the agreement.

Under the amendment to Article 35(3) of the law, the possibility of claiming damages following the prohibited use of a validated patent is substantially linked to the date on which the Hungarian translation of the specification is made available to the potential infringer and to the court. This could happen on the date of publication of the validated patent in the case of European patents granted in French or German, provided that the validation employed a full Hungarian translation. Alternatively, it could happen on the start date of the infringement proceedings.

The root of the problem lies in the wording of Article 35(3), which states that:

"Where a patent is infringed, the patentee may also claim damages under the rules of civil liability. Where the translation of the specification of the European patent has not been supplied by the patentee under Article 84/H, and the infringer is resident or has a seat in the territory of the Republic of Hungary, he shall not be held liable for the infringement until the patentee complies with Article 84/G(2), except where the patentee proves that the infringer may have understood the specification of the European patent without the translation thereof." (Emphasis added.)

In accordance with this paragraph and the rules of civil law, where the defendant's liability is a precondition for the court to decide on the payment of damages, situations may arise in which damages under the rules of civil liability may be claimed only for the period following the filing of the Hungarian translation of the specification, which may be several years after the date of validation.

Proposed solution

IP professionals have recognised the problem, and a proposal initiated by the Licensing Executives Society Hungary has indicated to the Hungarian Intellectual Property Office that:

• the law should allow an applicant to file a Hungarian translation of the specification, instead of the English specification, within the validation period; and
• as the effective date for claiming damages is related to the public availability of a Hungarian translation of the specification, the law must enable a patentee to file a Hungarian translation at any time during the period of validity of the European patent.

This proposal has been accepted and a proposed bill is being submitted to Parliament. The proposal would implement the following changes:

• The rights owner would have the option of validating a European patent in Hungary by submitting the full translation, irrespective of the language of the prosecution. In this case, the granting and printing fee would be payable according to the length of the Hungarian translation.
• Where a European patent has been validated in Hungary without the submission of a Hungarian translation of the description, a new legal procedure would allow for the subsequent, separate submission of a translation of the Hungarian description at any time; however, a separate printing fee, calculated according to the length of the description, would be payable.

It is believed that the bill will pass before the end of 2011.

Comment

If passed, the proposed bill will address key issues for patent stakeholders. It will provide owners of European patents with the cheapest way of effectively enforcing their rights by validating their patents in Hungary with the full Hungarian translation (and thus paying only a single printing fee).

A patent owner which is considering bringing a patent infringement lawsuit - or any party which simply wishes to take precautionary measures - will be able to file a Hungarian translation of the description at any time, thereby fixing the date from which subsequent damages can be claimed.

For further information on this topic please contact Michael Lantos at DANUBIA Patent & Law Office LLC by telephone (+36 1 411 8800), fax (+36 1 266 5770) or email ([email protected]).