Hungary

1. TRADE MARK

1.1. Sources of law

The main source of law relating to trade marks is Act XI of 1997 on the protection of trade marks and geographical indications (Trade Mark Act).

  Hungary is a member of the European Union and therefore certain EU Regulations and Directives influence the governing laws on trade marks, such as:

  • Council Regulation (EC) No 207/2009 of 26 February 2009 on the Community trade mark (CTMR); 
  • Directive 2008/95/EC of the European Parliament and of the Council of 22 October 2008 to approximate the laws of the Member States relating to trade marks (TMD); and 
  • Directive 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of intellectual property rights (Enforcement Directive). 

  Hungary is also member of several international conventions relating to trade marks. The Paris Convention for the Protection of Industrial Property and the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) are the most important. Other important conventions are the Madrid Agreement Concerning the International Registration of Marks and the Trade Mark Law Treaty which was adopted at Geneva in 1994.

  When a conflict arises between the sources of law, the first thing to determine is whether there is a EU Regulation or Directive. If a Hungarian act or statute conflicts with a regulation of the Council of the European Union or the European Commission, the regulation prevails. The order of priority is: sources of primary and secondary laws of the European Union, Hungarian acts and statutes. 

1.2. Substantive Law

The trade mark proprietor has the exclusive right to use the trade mark in connection with the goods and services for which it is registered either directly or through third parties by way of a licence. The proprietor has the right to prevent third parties from using an identical or similar mark in relation to identical or similar goods or services without permission. Registered trade marks with a reputation have a wider protection; they are also protected in relation to the use of an identical or similar later mark on dissimilar goods and services if such use is without due cause and would take unfair advantage of, or be detrimental to, the distinctive character or the repute of the earlier trade mark. Unregistered trade marks with reputation are protected by the Trade Mark Act and can be relied upon as a ground for opposition. In addition, pursuant to Article 6 of Act LVII of 1996 on the prohibition of unfair and restrictive market practices (Competition Act) they can be used as grounds for a passing off action.

  In Hungary the trade marks belonging to the luxury industry do not enjoy broader protection than other trade marks and they cannot be enforced in a different way either. 

1.3. Enforcement

The trade mark proprietor has the right to prevent others from using, without his consent, any sign that is identical with, or confusingly similar to, the trade mark or without due cause would take unfair advantage of, or be detrimental to, the distinctive character or the repute of the earlier trade mark.

  A trade mark has a reputation if it is well-known among Hungarian consumers (in the case of national trade mark) or within a substantial part of a Community (in the case of Community trade mark). Reputation may be proved by various means of evidence such as:

  • invoices proving sales or marketing expenditure;
  • online and offline promotional materials; 
  • consumer survey and expert evidence analysing such surveys.

  Oral testimony or affidavit are not enough to prove the extent of use the trade mark, however they may be used to supplement other means of evidence. 

  There is no certain threshold of reputation in percentage or territory that must be reached by the trade mark, all relevant facts and circumstances are taken into account by the competent authorities, such as:

  • market share of the products/services bearing the trade mark; 
  • the extent, territory and time of use; and 
  • the costs incurred in advertising the mark to the public. 

  The trade mark proprietor may also prevent others from using a sign that is identical or similar to the mark as a domain name if such use is in the course of trade. The registration of a domain name in itself does not amount to use in the course of trade, but, if the registrant is a company, then it is assumed that the company will use the domain name in the course of business.

  Unauthorised use by a third party of a company name, trade name or shop name which is identical or similar to an earlier mark in connection with the marketing of goods which are identical or similar to those in relation to which that mark was registered constitutes use which the proprietor of that mark is entitled to prevent, where the use is in relation to goods in such a way as to affect or be liable to affect the functions of the mark.

  Without the express prior consent of the competitor, goods of a fungible nature (hereinafter referred to as "goods") or services may not be produced, placed on the market or advertised with such distinctive appearance, packaging or marking (including the indication of origin). Furthermore, any such name, marking or indication of goods may not be used by which the competitor or its goods and/or services are normally recognized. This means that distinctive signs which are unregistered trade marks are afforded protection under Article 6 of Competition Act, however a registered trade mark with earlier priority than the date when the sign became distinctive can be enforced against such sign.

  A trade mark can also be enforced against its use as a metatag. The use of the metatag in the source-code or link of a website is an infringement, because the customers are able to perceive the trade mark, and the customers can reach the website if they search for the trade mark on the internet.

  A trade mark can also be enforced against its unauthorized use in social media, if the use is made within economic activity.

  A trade mark can be enforced against its use in comparative advertising if the comparative advertising is detrimental to the reputation of the trade mark, or is likely to cause confusion between the compared products or trade marks, or the advertising leads to unfair profit. It may, however, be indispensable, in order to make comparative advertising effective, to identify the goods or services of a competitor, making reference to a trade mark or trade name of which the latter is the proprietor. Such use does not infringe the trade mark if it complies with the conditions laid down by Directive 2006/114/EC of the European Parliament and of the Council of 12 December 2006 concerning misleading and comparative advertising. Namely if the use of the third party's trade mark is made solely to distinguish between the compared products or services and thus to highlight differences objectively.

  Trade mark rights cannot be enforced to restrict free speech or parody as long as they are not used in economic activity: Article XI of the Fundamental Law of Hungary protects free speech.

  A trade mark owner may take actions claiming both trade mark infringement and unfair competition for the same set of facts. For example, if the infringer copies the product's packaging or appearance, the trade mark proprietor may initiate trade mark and unfair competition proceedings in parallel and separate proceedings before the competent court where the infringer is domiciled. It means that the Metropolitan Court has exclusive jurisdiction over trade mark infringement actions, while over the unfair competition claim the General Courts have jurisdiction, depending on the domicile of the alleged infringer. 

2. COPYRIGHT

2.1. Sources of law

The principal source of law is the Act LXXVI. of 1997 on Copyright (Copyright Act) and there are also several ministerial statutes. As a member of the European Union, the resolutions of the Council of the European Union and the European Commission, further the directives also have influence on the Hungarian laws. Hungary is also member of international conventions related to copyright, for example the Universal Copyright Convention, the WIPO Copyright Treaty, or the Berne Convention for the Protection of Literary and Artistic Works. 

2.2. Substantive law

In Hungary, artistic works, literary works, and academic works are copyrightable. The Copyright Act contains an open list of copyrightable works that includes, for example, public speeches and computer programs.

  Objects of industrial designs are expressly listed in the Copyright Act and are protected if they fulfil the same criteria of originality as other copyrightable works.

  Copyright protection bestows on the owner both moral rights as well as economic rights. Moral rights include the right to be identified as the author, and the right of integrity of the work.

  A legal entity can acquire rights in the works created by its employees. Employees works created by state officials may be acquired by the state.  The employer will be entitled to the work if the employee's job is to create copyrightable work. The employer acquires the rights over the work when the employee hands the work over to the employer. The employee can restrict the employer's acquisition of the work by written contract. The employee has a right to an appropriate remuneration. Authors are entitled to appropriate remuneration if the employer authorizes a third person to use the work or assigns the economic rights in connection with the work to a third person. Authors are entitled to receive the remuneration that they are due after the assignment of use rights pursuant to Copyright Act, even in the event of the employer acquisition of the right. These provisions shall not apply to software and databases.

  The authors' rights over the work are also limited. The employer has the right to publish the copyrightable work after the employee has handed it over. Before the hand-over, the employee has the right to publish the work. The right to be identified or right of paternity cannot be transferred to, and must be respected by, the employer. The employer has the unlimited right to change the work, but must exercise its right in good faith. If an employee creates a copyrightable work and doing so does not fall within the scope of his/her employment duties, the employer is not entitled to the assignment of the copyright in the work.

  In the Hungarian system the assignment of copyright is prohibited unless allowed by law (for example in the case of database or software). License and assignment agreements must be in writing and must identify the parties, the author and the user, the work, the compensation for the author and the scope of the grant. The agreement must also define the measure of the utilization, which means the duration and the territory of the use, further the range of uses which are in particular the reproduction of a work, distribution of a work, public performance, presentation to the public by broadcast or some other manner, retransmitting broadcast works to the public through an organization other than the original, adaptation and exhibition.

  If the employee creates a copyrightable work, and he hands it over to the employer, the employer acquires the rights over the work (if it is the employee's duty to create a work according to the employee's field of activity). Therefore, it is important to define the employee's field of activity in the labour contract. The employer and the employee can draft a contract in which they can limit the employer's right to acquire the copyright. In this case, it is prudent to define which right the employer and which right the employee can exercise. If creating a copyrightable work is not the employee's duty, the employer does not acquire any right with the hand-over. In this case, the parties can agree to enter into a license contract according to the general rules.

  The author cannot transfer his or her moral rights, but the licensee shall be entitled to take action in defence of an author's specific moral rights if the author has given his/her express consent to such  in the license agreement. The author cannot waive his or her moral right either.

  The term of copyright protection is 70 years post mortem of the author. The 70-year period starts to run from the first day of the year following the author's death. In the case of joint-works, the 70-year period starts the first day of the next year after the last surviving author dies. If the author of the work cannot be determined, the protection time also lasts 70 years, but it starts to run from the first day of the year following the first publication of the work. However, if the identity of the author is subsequently established the protection time is counted according to the general rules. If the work was published in separate parts, the year of publication must be counted separately for each portion. When a work was created by joint-authors the time of protection also lasts 70 years and it starts to run from the first day of the year following the first publication. The term of protection in case of cinematographic works starts to run from the first day of the year following the last author's death. In the case of cinematographic works, the director, the screenwriter, the author of the dialog, and the author of the soundtrack, if the music was expressly composed for the film, are considered authors. 

2.3. Enforcement

In Hungary no registration is necessary for a work to enjoy protection under copyright law. The protection starts with the creation of the work. There is no need for any registration, deposit or notice to enforce the copyright. However registration of work at the Hungarian Intellectual Property Office is beneficial, since, in case of litigation, it can prove the ownership in favour of the registrant.

  Industrial designs are protected by copyright like any other work and do not need to satisfy specific aesthetic requirement, although they cannot be purely functional and the owner must establish that the work is of personal intellectual creation. In most cases, the judge cannot decide whether the work is original, therefore, the Council of Hungarian Copyright Experts is called to determine originality. 

  Copyright infringement is assessed by Hungarian courts based on substantial similarity. One-to-one copying is not necessary. If the judge cannot decide on substantial similarity, for example in case of copyright infringement in relation to software, he will ask the Council of Hungarian Copyright Experts to provide expert opinion on substantial similarity.

  Copyright may be enforced against other intellectual property rights if the subject matter of the other right is substantially similar or the same as the protected work. Obtaining a registration for an industrial property right does not exclude the infringement of an earlier copyright. Additionally, in case of trade mark and industrial design application, an earlier copyright is considered a prior right on which opposition or cancellation may be based.

  Everybody can use the copyrightable works for their private usage, therefore everyone can use copyrightable works in social media as long as the intention is not to gain profit from it.

  Rules regarding unauthorized use of trade mark in comparative advertising by analogy apply for copyright as well, since under product or sign to which the comparative advertisement refers can be any immaterial right, including other intellectual property rights (also design right) may be understood. Due to overlaps between rights on the same subject matter one cannot exclude copyright or design right from scope of the rules of comparative advertising.

  Parody is an expression of the freedom of speech and it is a limit to copyright. However, it must satisfy certain requirements to be considered a legitimate exercise of free speech instead of copyright infringement. The first requirement is that the public has to be able to recognize the original work, which means that the public associate to the original work. Parody has to be a result of individual creating activity, and it has to be original. If these requirements are fulfilled, then the original author cannot enforce his or her copyright against the parody.

  As a defense to a claim for copyright infringement, the alleged infringer can argue that he or she was free to use the copyrighted work. There are exceptions to copyright that enable its use without the author's permission, such as quoting, borrowing, school exercises, copying for private use, certain organization's copying for private use, copying for educational reasons, temporary copying and digital copying and so on. In these cases the user can use the work for free and without permission.

  There are no other rules that could bar the copyright holder to enforce its right. The general 5 year statute of limitation also applies to copyright infringement.

  Copyright and design infringement actions, as well as unfair competition actions may be taken simultaneously and parallel to each other. However, according to the latest practice of the courts, they have to be filed before different courts. The Metropolitan Court has exclusive jurisdiction in design and copyright infringement matters, while unfair competition case must be brought before the General Court where the seat of the defendant is located. 

 

3. DESIGN

3.1. Sources of law

The principal sources of international law and regulation relating to designs are the Paris Convention for the Protection of Industrial Property, several Hague Agreements, Locarno Agreement Establishing an International Classification for Industrial Designs. Besides the Act XLVIII of 2001 on design protection (Design Act), the protection of Community registered and unregistered designs is provided by Regulation (EC) No 6/2002 of 12 December 2001 (CDR) 

3.2. Substantive law

A product can be any industrial or handicraft item, including inter alia parts intended to be assembled into a complex product, packaging, get-up, graphic symbols and typographical typefaces, but excluding computer programmes. Design rights do not protect naturally occurring or living organism. Moreover, features solely dictated by technical functions and features which must fit another product and designs which are contrary to public policy or to accepted principles of morality are expressly excluded from design protection.

  Design protection shall be granted to any design that is new on a worldwide level, thus differing from any existing design more than in immaterial details, and has individual character, thus producing a different overall impression on the informed user from any existing design. In assessing individual character, the degree of freedom of the designer - taking into consideration the nature of the product to which the design is applied or in which it is incorporated, and in particular, the industrial or handicraft sector - in developing the design must be taken into account.

  The rights conferred by a design may be assigned, transferred and encumbered, with the exception of the rights of the designer stemming from the design. Under a contract of exploitation (design license contract), the holder of the design shall give authorization for the exploitation of the design, and therefore the licensee shall be required to pay a fee. Design licensing contracts are governed by the relevant provisions of the Patent Act pertaining to patent license contracts.

  Service design means any design developed by a person in the execution of his duties stemming from employment that includes working out solutions within the domain of the design. In connection with service designs, the right to the design shall vest in the employer. Employee design means any design developed by a person who is not required to do so under his contract of employment, however, the utilization of such design falls within the sphere of activities of his/her employer. In connection with employee designs, the right to the design shall vest in the designer; however, the employer shall be entitled to exploit the design. The employer's right of use is non-exclusive, and the employer may not license the use of the design. The provisions of the Patent Act governing service and employee inventions shall also apply to service and employee designs and to the appropriate remuneration of designers.

  The designer cannot waive or transfer his/her moral rights.

  Upon registration, a design shall be protected for a period of five years as from the date of filing of the application. The right holder may have the term of protection renewed for up to four periods of five years each. In the case of renewal, the next term of protection shall commence on the day immediately following the day of expiry of the previous one. Protection may not be renewed beyond twenty-five years from the date of the filing of the application.

  A design which meets the requirements under Section 1 CDR shall be protected as an unregistered Community design for a period of three years from the date on which the design was first made available to the public within the Community. 

3.3. Enforcement

Any person who unlawfully exploits a protected design, commits infringement of design protection. The holder of the design protection may have recourse to civil remedies against the infringer in the same way as a patentee, by virtue of the Patent Act, may have recourse thereto against the infringer of his design. Actual copying is not required by law, however the accused product only infringes the asserted design if they are identical or do not produce a different overall impression on the informed user. Unregistered Community design only confers right against copying to the right holder, thus the accused infringer may escape infringement, if they can present that the infringing use resulted from an independent work of creation by a designer who may be reasonably thought to be unfamiliar with the design made available to the public. Recent ruling of the CJEU implied that burden of proof may shift to the accused infringer (to prove independent work of creation), if copying can be presumed or is substantiated by the right holder, thus national courts shall provide for the burden of proof to be adjusted or lightened towards the right holder (cf. CJEU C-479/12 - H. Gautzsch Großhandel GmbH & Co. KG v Münchener Boulevard Möbel Joseph Duna GmbH)

  Design right may be enforced against other intellectual property rights if the subject matter of the other right does not produce a different overall impression on the informed user. A registered right does not preclude the infringement of an earlier design right. Additionally, in case of trade mark and industrial design applications, design right is considered a prior right on which opposition or cancellation may be based. Also, in case of a patent application, a disclosed design may be capable of influencing the novelty or inventive step of the patent.

  The rights conferred by a design shall not be exercised in respect of acts done privately and for non-commercial purposes; thus if the use in social media falls within private and non-commercial use the design right cannot be enforced.

  Parody under design law is not fair use as in copyright law. The right holder can enforce its design right against such use.

  A protected design shall not entitle the holder to prohibit a third party from using such design for the purpose of repairing a complex product in order to restore its original appearance, where the design is applied to or incorporated in a product which constitutes a component part of a complex product upon whose appearance the protected design is dependent, provided he uses it in accordance with honest practices in industrial or commercial matters.

  There are no other rules which could bar the right holder from enforcing its right. The general five year statute of limitation applies to design infringement.

  Copyright and design infringement actions, as well as unfair competition actions may be started simultaneously and parallel to each other. However, according to the latest practice of the courts they have to be filed before different courts. The Metropolitan Court has special jurisdiction in design infringement cases, while copyright and unfair competition cases must be brought before the General Court where the seat of the defendant is located. 

 

4. RIGHT OF PUBLICITY

5. PRODUCT PLACEMENT

Product placement has been permitted in Hungary since 2011. It was legalized by the new Act CLXXXV on Media Services and on the Mass Media.

  There are several limits relating to product placement. The requirements of product placement are the following:

  • (2) Product placement in programs shall be admissible:
    • a) in cinematographic works intended for showing in movie theatres; cinematographic works, films and series made for media services; sports programs and entertainment programs; 
    • b) in programs other than the ones mentioned in Paragraph a), provided that the manufacturer or distributor of the product in question, or the supplier or agent of the service does not provide the producer of the given program with any financial reward either directly or indirectly with the exception of making available a product or service free of charge for the purpose of placement. 
  • (3) Product placement shall be prohibited: 
    • a) in news programs and political information programs; 
    • b) save where Paragraph b) of Subsection (2) applies, in programs made specifically for minors under the age of fourteen; 
    • c) in programs reporting on the official events of national holidays; 
    • d) in programs of religious or ecclesiastic content.
  • (4) Programs shall not contain product placement with respect to the following products: 
    • a) tobacco products, cigarettes or other products from companies whose principal activity is the manufacture or sale of cigarettes and other tobacco products; 
    • b) products that may not be advertised pursuant to this Act or other legislation; 
    • c) pharmaceutical products, therapeutic products or processes available only on prescription; 
    • d) gambling services provided without the state tax authority's authorization".

  If the other party fails to perform the agreement properly, then the communication is qualified as trade mark infringement. The entitled of the trade mark may have the same recourse of actions as in case of trade mark infringement. 

 

6. . PROTECTION OF CORPORATE IMAGE AND REPUTATION

Part of the law relating to right of publicity and/or privacy extend to legal entities as well. The entities also have legal capacity. The legal capacity of entities shall cover all rights and obligations that do not inherently pertain solely to natural persons.

  Legal persons may be established in a form defined by law, for the pursuit of activities and objectives which are not prohibited by law. Each legal person shall have their own name, seat, shall have their own assets and representative body.

  In principle it is possible to include specific clauses to protect corporate image and reputation of the legal person if those are in accordance with rules of competition law.

4.1. Sources of law

The main source is Act V of 2013 of the Civil Code which contains the regulations on the protection of name, image, likeness and other aspects of the identity. 

4.2. Substantive law

The legal capacity is the only requirement to enjoy the right of publicity.
Only natural persons may have the majority of the rights. But there are some exceptions according to which also legal persons may have such rights.

  Each person, if born alive, shall have legal capacity retroactively from the day of conception.

  The right of publicity ends with the death of the person. Should the entitled person grant a licence regarding the use for his/her name, image, likeness or other unequivocal aspects of his/her identity during his/her lifetime, the licensee shall be entitled to exercise these right and enforce infringement claims.

  Authors cannot assign or waive their moral rights or assign them to another person in any manner, since they are personal rights.

  Generally, any kind of infringement of the right of the publicity is an unlawful action. It is not possible to completely assign the right of publicity. However the consent of the owner rules out the unlawfulness. Such consent is a special type of license of use which is permission to use his/her name, image, likeness or other unequivocal aspects of his/her identity.

  This special type of license must be in writing, it has to be explicit and it shall not be interpreted extensively.

  Based on 2:51. § of Act V of 2013 of the Civil Code a person whose personality rights have been violated shall have the right to demand within the statute of limitation based on the infringement as appropriate by reference to the circumstances of the case:

  • a court ruling establishing that there has been an infringement of rights; 
  • to have the infringement discontinued and the perpetrator restrained from further infringement; 
  • that the perpetrator make appropriate restitution and that the perpetrator make an appropriate public disclosure for restitution at his own expense; 
  • the termination of the injurious situation and the restoration of the previous state, and to have the effects of the infringement nullified or deprived of their unlawful nature; 
  • that the perpetrator or his successor surrender the financial advantage obtained by the infringement according to the principle of unjust enrichment.

  The agreement shall be considered valid after one of the parties' death, since the rights shall be deemed as transferred to the heirs. The agreement will be terminated upon death or dissolution of the obligor without succession, if it concerns a service that can be performed personally; or upon death or dissolution of the obligee without succession, if the service is to be performed specifically for the obligee by virtue of its very nature. 

4.3. Enforcement

Based on 2:50. § Act V of 2013 of the Civil Code, in the case of any violation of the memory of a deceased person, the relative and/or the person having been named heir apparent in the will of the deceased shall be entitled to bring court action.

  If somebody breaches the personality right of someone else in a public place and third parties experience it, restitution is up to the measures of the publicity and the damage which suffered from the violation. In this case it is enough to prove the fact of the violation and the representative of the entitled will give details about the losses and the commercial value. Regarding the above, the legal representative may use any kind of evidences like oral testimony or affidavit.

  For the alleged infringer any options for defence shall be available which is in accordance with the Hungarian civil procedure.