Hungary to shift away from a hard bifurcation system in patent matters – Significant amendments to the Hungarian Patent Act on the horizon

After lengthy discussions and the active participation of stakeholders, the Hungarian Parliament on 9 November 2021, passed new legislation amending the Hungarian Patent Act (Act 33 of 1995 on the Protection of Inventions by Patent) that is changing the Hungarian patent litigation landscape as we know it.

The amendment touches on three main topics, such as (i) the Bolar-exemption, (ii) softening of the bifurcating system, and (iii) new provisions on preliminary injunctions. The expectation behind the amendment are faster court proceedings and increased clarity when it comes to compensation for damage suffered as a result of unjustified preliminary injunctions.

The Amendment is waiting for formal signing off by the Head of Parliament and expected to be officially published in the Hungarian Official Gazette in the upcoming days.

We were actively taking part involved in shaping the new provisions through various professional associations and we are certain that this will be the biggest change to the Hungarian Patent Act in the last 25 years. Below, we provide an overview of the new provisions and their expected effect on future patent litigation in Hungary.

Changes to the Bolar-exemption [Art 19 (6) Patent Act]

Provisions on the Experimental- and Bolar-exemption were previously not separated in the Patent Act and there had been uncertainties and scarce case law on what the practical scope of the exemptions could be.

The Amendment aims to establish clarity by setting out that the experimental and Bolar exemptions have distinct scope; Bolar-exemption being strictly applicable for medicinal products, stemming from Article 10(6) of Directive 2004/27 amending Directive 2001/83 on the Community code relating to medicinal products for human use. The new provisions clearly set out the scope of the exemption, (i) extending to the placing of the product on the market both within the EEA or a third country; (ii) with listing exempted activities mirroring the infringing activities listed in the Patent Act, yet the list of exempted activities are not exclusive; and (iii) stating that these acts may be undertaken by the MA holder or any other person having economic links with the MA holder for such purposes. The justification to the amendments states, however, that these acts may only be permissible to the extent necessary for authorization.

These changes are expected to gain effect after official publication of the Amendment.

Changes effecting the bifurcation system [inter alia Art 104 (1a)-(1i) Patent Act]

When it comes to enforcement of patent rights, Hungary has been known to be one of few jurisdictions, where the bifurcating system has been standing strong. With the amendment, this is now started to significantly shift allowing invalidity arguments to be considered to a certain extent.

This means in particular that a counterclaim for invalidity can be introduced in the infringement action; in which case the court will act in an expedited way, without delay. The court shall consult a special expert on invalidity questions, that being primarily the Hungarian Intellectual Property Office. The timeline for providing the expert opinion is limited – and strictly enforced – in 30 days.

The most common holdup in patent infringement cases were the frequent and almost automatic suspension of the infringement action as long as separate proceedings for invalidity were heard. The amendment changes this by stating that the infringement suit will only be stayed if the defendant can show that it had started a separate revocation action against the patent at the Hungarian IPO prior to the commencement of the infringement suit, i.e., there will be no stay for 2-3 years]. While if there is a pending opposition at the EPO in the subject of a Hungarian validated European Patent, the infringement suit may only be suspended in particularly justified cases, i.e., not automatically.

These new rules will be applicable for proceedings commenced on 1 January 2022 or afterwards.

Changes to the provisions on preliminary injunctions [inter alia Art 104 (2); (2a); (12a) Patent Act]

To pair the provisions…

Full article available on PatentHub

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