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Enforcement through the courts
What level of expertise can a patent owner expect from the courts?
The Budapest Metropolitan Court (which has exclusive competence) decides patent issues in a specialised panel comprising a legal judge as chair and two technical judges. This panel is well experienced, makes thorough decisions and is up to date on European patent law developments.
The Metropolitan Appeal Court also adjudicates patent issues in a three-judge panel, although these judges have no technical qualifications. Consequently, appeals focus more on legal details rather than technical details.
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 in Hungary.
What role can and do expert witnesses play in proceedings?
In main infringement proceedings, the party with the burden of proof may call a forensic expert. The parties may agree on the expert; if they fail to do so, the court appoints a forensic expert. Court-appointed experts are considered to be impartial, although their statements may be challenged by the parties. Parties can also file private expert opinions both in the main suit and in preliminary injunction proceedings; however, these expert opinions cannot replace the opinion of the court-appointed forensic expert, which counts as the opinion of the party. Nevertheless, as the technical questions are highly specific and there are only a few qualified experts, a private expert opinion may carry greater weight. The cost of court-appointed experts is usually first paid by the interested party – typically the claimant – and borne by the losing party.
Does your jurisdiction apply a doctrine of equivalents and, if so, how?
The doctrine of equivalents is included in Article 24(4) of the Patent Act, in line with the European Patent Convention 2000, in order to determine whether 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. The Hungarian courts employs the so-called ‘triple identity’ test – namely, equivalence is established when, compared to the patent claim, the given feature serves an essentially identical function in an essentially identical way providing an essentially identical result.
Is it possible to obtain preliminary injunctions? If so, under what circumstances?
A preliminary injunction may be requested even before the main suit, and theoretically even ex parte (although this has not occurred in practice). The patentee or licensee must prove that infringement is highly probable and that the preliminary injunction is necessary to protect its rights. A presumption applies to these rights if the preliminary injunction is filed within 60 days from gaining knowledge of the infringement, provided that the latter has commenced less than six months previously.
Alternatively, the patentee may demonstrate that the preliminary injunction is needed to prevent immediate damage. In both cases the balance of advantages and disadvantages must be demonstrated. In many cases, the preliminary injunction is subject to the deposition of a security to be paid by the plaintiff. A pending revocation or non-infringement action does not prevent the court from ruling on a preliminary injunction request.
How are issues around infringement and validity treated in your jurisdiction?
The Hungarian courts follow a bifurcated system. If the validity of a patent is challenged via a revocation action (or an opposition, in case of European patents) during or before patent infringement proceedings, the infringement proceedings will be suspended until the revocation action has been finally adjudicated. This does not affect preliminary injunctions, as these can be requested and ruled on even if a revocation or opposition action is pending. As long as there is no first-instance invalidity decision against the patent, the courts generally consider the patent’s validity sufficiently proven for the purpose of an injunction.
Will courts consider decisions in cases involving similar issues from other jurisdictions?
The Hungarian courts are not obliged to follow or consider decisions adopted by other jurisdictions, and in many cases this is emphasised by the courts and the Hungarian Intellectual Property Office. A preliminary injunction proceeding for a European patent is the only case where the Patent Act specifies that the court may take into account whether the European patent at issue was revoked by the European Patent Office or nullified in another jurisdiction.
Damages and remedies
Can the successful party obtain costs from the losing party?
The losing party bears all of the court costs. If the winner-loser ratio is different, the same ratio is applied to the court costs. Often, if the winning ratio is indistinguishable, the parties are ordered to bear their own costs. The parties must certify their costs via invoices. However, if the court considers the costs to be disproportionate to the complexity or value of the case, it may mitigate them and establish a lower amount. In practice, the court often sets the costs at a lower level.
What are the typical remedies granted to a successful plaintiff?
According to Article 35 of the Patent Act, the patentee may seek the following civil remedies:
- a declaration of infringement;
- a cease and desist injunction (also available in a preliminary injunction);
- an order to obtain information on the identity of persons involved in the production and distribution of the infringing goods;
- satisfaction from the infringer by way of declaration or other appropriate means;
- surrender of the profits obtained through infringement of the patent;
- seizure, transfer, recall and removal or destruction of the infringing products, as well as the means and materials exclusively or principally used for infringement; and
Plaintiffs generally claim all of these remedies, if applicable. In preliminary injunction requests the courts are usually hesitant to grant claims other than injunctive relief due to their irreversible character (eg, the provision of information due to the protection of business secrets because this action is irreversible, even if the patent is ultimately found invalid).
How are damages awards calculated? Are punitive damages available?
The Patent Act differentiates two types of pecuniary compensation:
- Infringer’s profits gained through infringement – this is an objective penalty for the infringement and does not depend on whether the infringement was wilful. In patent cases the court typically considers the revenues and costs directly linked to the infringing product or process.
- A claim for compensation of the patentee’s damages in line with the Civil Code – this typically entails compensation for the patentee’s lost profits.
Importantly, the amount of the pecuniary claim must be proven by the plaintiff. Further, if the plaintiff is claiming damages, it must prove the link between the infringing activity and the damages (eg, a decrease of their profit).
There are no punitive damages under Hungarian law.
How common is it for courts to grant permanent injunctions to successful plaintiffs and under what circumstances will they do this?
Under Hungarian court practice a declaration of infringement is followed quasi-automatically by an injunction. To date, no cases have challenged this approach.
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 Court takes between 18 months and six years to issue a first-instance decision in a patent infringement suit. Many factors influence this broad timeframe – in particular, whether the defendant uses an invalidity defence, in which case the infringement suit will be 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, how many times the parties exchange submissions); and
- the 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, a preliminary injunction must be adjudicated in an expedited procedure and has a strict deadline. A first-instance decision usually takes between four to six weeks. Patent revocation actions last typically two-and-a-half to five years unless a pending infringement action justifies accelerated proceeding, which reduces proceedings by approximately one year.
How much should a litigant plan to pay to take a case through to a first-instance decision?
The actual costs vary greatly, depending on the circumstances of the case. Generally, rights holders should budget between €20,000 and €80,000 per patent, depending on:
- the complexity of the patent to be discussed;
- the available evidence;
- the number of hearings;
- the involvement of experts; and
- any translation requirements.
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