Hungary Amends Patent Act

Amendments to the Hungarian Patent Act entered into force on January 1, 2022, introducing changes regarding the Bolar exemption and affecting the bifurcation system and the grant of preliminary injunctions.

Clarification of the Bolar Exemption

Prior to the amendments, the Hungarian Patent Act regulated both the experimental use exemption and the Bolar exemption together within the same provision. The amended law separates the two exemptions, which appears justified from both the substantive and the technical point of view because these two exemptions only partially overlap.

While the experimental use exemption permits the use of a patented invention when such use is experimental in nature, the Bolar exemption permits the use of a patented invention for research and development purposes and for obtaining the required regulatory approval. These exemptions are especially relevant for pharmaceutical companies, because they allow generic drug manufacturers to prepare generic drugs before the patent expires.

The amended Act, which is now harmonized with the EU Directive 2001/83/EC, clarifies the scope and conditions of the Bolar exemption. The following uses of a patented invention will not constitute patent infringement:

• Private use, not involving an economic activity;
• Use for experimental purposes relating to the subject matter of the invention;
• Trials, tests and any acts necessary to obtain the marketing authorization for placing the product on the European Economic Area market or in a third country, including manufacturing, use, placing on the market, offering for sale, keeping in stock, importing into or exporting from the country, whether or not these activities are carried out directly by the marketing authorization applicant or by any person having economic links with the applicant for that purpose; and
• Preparation, in a pharmacy, of a medicine in accordance with the medical prescription, or acts concerning the medicine so prepared.

Revocation and Infringement Proceedings

The former Hungarian Patent Act provided for a bifurcated patent litigation system, meaning that the first instance authority in patent revocation proceedings was the Hungarian Intellectual Property Office, while in infringement cases it was the Metropolitan Court of Budapest. In a patent infringement case, the court did not rule on patent validity – if the validity of the basic patent was disputed, the court proceedings had to be suspended until the Hungarian IPO’s decision in the revocation case became final. Practice has shown that this resulted in excessive duration of the litigation proceedings in some cases.

In order to speed up the proceedings, the amendments aim at a partial revision of the bifurcation system by allowing the defendant in an infringement case to file a counterclaim for patent revocation with the court. In that case, the IPO will suspend any parallel revocation proceedings until the court decision in the revocation counterclaim proceeding becomes final. The amendment does not alter the IPO’s competence in relation to revocation proceedings if they do not involve a patent infringement proceeding.

Preliminary Injunctions

The amendments put more emphasis on the consideration of the counterclaim for patent revocation when ordering a preliminary injunction. Particularly, new provisions have been added on the repeal of a preliminary injunction and on compensatory damages resulting from a preliminary injunction that has subsequently been revoked due to the revocation of a patent.

Prepared by: Zita Szilágyi and Erika Farkas

For more information, please contact hungary@petosevic.com.

Source: Hungarian Official Gazette