Hungarian legislators have proposed a new bill banning the use of symbols of totalitarian regimes for commercial purposes. The proposed ban would be the most recent development in the long history of Hungarian legislation directed against totalitarian symbols. It has been forbidden for most of the past 25 years to present or use a swastika or a five-pointed red star in Hungary, although in 2006, the European Court of Human Rights found the broad scope of the ban to violate the freedom of expression. Since then, the use of totalitarian symbols was forbidden only in case it would disturb public order or hurt the feelings of the victims of totalitarian regimes meaning that simply the wearing of a five-pointed red star on someone’s jacket was not a violation of the law. However, the proposed new legislation would extend the prohibition also to commercial acts. In other words, the use of totalitarian symbols would be prohibited not only if it was able to hurt the feelings of the victims or to cause public disorder but also in promoting commercial interests. This would mean most importantly that products with trade marks containing such symbols on their packaging would be forbidden in Hungary.
One of the companies most affected by the proposed legislation is Heineken which markets its products in packaging containing a five-pointed red star, which is also a protected trade mark. The new legislation actually seems to have arisen out of a legal battle between Heineken and a small Romanian beer producer whose partial owner is an ethnic Hungarian who is a citizen of Romania. The essence of the story is that Heineken owns a Romanian brewery in the Csík region of Romania which is populated mostly by ethnic Hungarians. The brewery which had been operating for several decades before Heineken purchased it in 2003, produces a beer called “Ciuc” after the Romanian name of the region. The name of the beer is protected by a trade mark, which is now also owned by Heineken. However, the Hungarian population of the region has always called the beer by the Hungarian name of the region, namely Csíki. The Hungarian name, however, was not protected as a trade mark before 2014.
In 2013, an ethnic Hungarian entrepreneur and his foreign business partners started a beer-producing venture in the same region. The company applied for the EU trade mark Csíki, which is the Hungarian version of the name Ciuc, and put their own beer on the market with a name containing this word meaning “real Csíki beer” in 2014. Heineken opposed the application. The EUIPO have initially decided in favour of the applicant on the grounds that the two words Ciuc and Csíki could not be mistaken for each other. Heineken has appealed the decision to the General Court very recently and therefore the EU mark Csíki is still not registered.
In the meantime, Heineken also filed lawsuits based on trade mark infringement and unfair competition in Romania and won a final ruling in January this year. The Romanian appellate court confirmed that the marketing of the Csíki beer violated Heineken’s intellectual property rights and constituted unfair competition with regard to Heineken. Accordingly, the Romanian court banned the marketing of the “real Csíki beer” in Romania and ordered all tools and equipment connected to its production to be destroyed.
As the current Hungarian Government protect strongly the rights and interests of Hungarian minorities in neighbouring countries including Romania, it considered the legal steps taken by Heineken as an attack against a Hungarian company and Hungarian interests in general, and proposed the aforementioned bill in response.
It is unclear if the proposed bill will be adopted and if so, with what exact content. According to the current draft of the bill, it would ban the use or the visualisation of totalitarian symbols for commercial purposes and the marketing of products wearing totalitarian symbols. This would affect Heineken and maybe other internationally operating companies (e.g. San Pellegrino), as well. Although the bill allows for the filing of requests for exemption from this regulation, it expressly prescribes that the holding of a trade mark in itself cannot be regarded as a ground for exemption.
The law – in its current draft – also provides for severe fines against those who violate the proposed ban. The fine could be imposed both on the producer and on the retailer who markets or sells products that have a totalitarian symbol on them. The fine could amount up to 5% of the annual proceeds of the company or 2.000.000.000,- HUF (ca. 6.500.000,- EUR) at maximum. The bill would also penalise the violation of this ban with a criminal punishment of up to 2 years in prison, although, as mentioned, it is unclear whether the bill will be passed in its current form.
In any case, companies operating in Hungary and in other Central and Eastern European countries have to be aware that some symbols that are regarded as harmless in the West can cause trouble for them due to historical reasons, depending on fluctuating political circumstances. Due to the mixed ethnical composition of many of the countries in Central and Eastern Europe, it is also advisable to register word trade marks in the minority languages of the area concerned, as well.