Implementation of the IP Enforcement Directive 2004/48/EC into Hungarian legislation Presentation by Mihály Ficsor (Vice-President, Hungarian Patent Office) at the Regional Seminar on Enforcement of Plant Variety Rights in Poland Warsaw, May 2006

2 Improving the IP weaponry in Hungary in preparation for EU accession enforcement of IP rights: a real leitmotiv in the preparations for EU accession Enforcement Directive: adopted just a couple of days before enlargement the impact of WTO’s TRIPS Agreement TRIPS as a common denominator for further harmonisation at European level European integration + TRIPS implementation: a completely different landscape of IP enforcement in Hungary

3 Preparations for transposing the Enforcement Directive action plan for transposition – amendments instead of a standalone statute of a horizontal nature point of departure: experts’ study commissioned by the Hungarian Council for the Protection of Intellectual Property and consultations based on that collecting factual data on the operation of existing enforcement mechanisms main results: - growing tendency towards reliance on the criminal justice system rather than civil remedies - companies engaged in infringing commercial activities disappear before they can be taken to court

4 Preparations for transposing the Enforcement Directive (cont.) first draft sent out for comments: mid-September 2005 hearing to discuss comments: 30 September 2005 in the Ministry of Justice October 2005: the draft was submitted to the Government November-December 2005: deliberations in Parliament on the Bill transposing the Directive

5 Transposition of the Enforcement Directive in Hungary Act No CLXV of 2005 amending certain Acts in relation to enforcement of industrial property rights and copyright date of adoption: 19 December 2005 entry into force: 15 April 2006 contains amendments to - industrial property laws (Acts on patents [including plant variety rights], trade marks, designs) - the Copyright Act - the Act on the execution of judgements

6 Implementation of the Directive in Hungary: main issues two sorts of amendments: - those necessary for the proper implementation of the Directive - those needed to remove obstacles to, or to streamline procedures for, enforcement, in accordance with the general objectives of the Directive Art. 2 (1): measures more favourable for right holders - presumption of authorship [Art. 5] - setting of damages [Art. 13 (1)] optional provisions not taken over: - alternative measures [Art. 12] - pre-established damages [Art. 13 (2)]

7 Implementation of the Directive in Hungary: main issues (cont.) scope – the Directive follows a horizontal approach: to be applied to infringement of all IPRs ”this Directive shall apply … to any infringement of intellectual property rights as provided for by Community law and/or by the national law of the Member State concerned” [Art. 2 (1)] Statement by the Commission concerning Article 2 [OJ , L 94, p. 37]: “patent rights, including rights derived from supplementary protection certificates” and ”plant variety rights” are also covered by the scope of the Directive

8 Implementation of the Directive in Hungary: main issues (cont.) however, recital (17) calls on MSs to ensure that due account is taken of ”the specific characteristics” of each case, ” including the specific features of each intellectual property right” real novelties calling for extensive transposition: - right of information [Art. 8] - certain provisional and precautionary measures [e.g. delivery up (Art. 9 (1) b)), precautionary seizure, including the blocking of the alleged infringer’s bank accounts (Art. 9 (2)) communication of bank, financial or commercial documents and data] - corrective measures [Art. 10] - publication of judicial decisions [Art. 15]

9 Implementation of the Directive in Hungary: debates and results provisional measures to be available even before the commencement of proceedings on the merits of the case [Art. 9] - breach of constitutional and human rights requirements? - Articles 9 (4) and 9 (5) - advice from the Commission - result: provisional measures have been made available even before the commencement of proceedings on the merits of the case

10 Implementation of the Directive in Hungary: debates and results (cont.) Article 9 (1) a) – ”counter-guarantee”: at whose request? - textual interpretation: only at the applicant’s (right holder’s) request - counter-argument: no logic – on its own will, the right holder would never ask for a counter-guarantee - consultation with the Commission - result: it is within the discretion of the court to order the lodging of ”counter-guarantees” and permit the continuation of the alleged infringement if the applicant originally requested an interlocutory injunction, but the defendant has no right to request the application of ”counter-guarantees”

11 Implementation of the Directive in Hungary: debates and results (cont.) Art. 9 (3): the courts „to satisfy themselves with a sufficient degree of certainty that the applicant is the rightholder” [i. e. that there is a valid right, too] - infringement and validity: interlinked issues - in Hungary: invalidity cannot be directly raised as a defence to an infringement claim - nullity proceedings to be brought before the HPO with a possibility to appeal to the Budapest Court - the court may stay infringement proceedings pending the decision on the validity of the patent (or other IP title) - the impact of the Merck v. Richter case

12 Implementation of the Directive in Hungary: debates and results (cont.) - argument from the generic pharmaceutical industry: a strong presumption of the validity of patents (and some other titles) is not justified, in particular, where the right being enforced was granted without prior substantive examination, or where nullity procedures have already been initiated - proposals to take account of foreign decisions revoking the same patent - result: a rebuttable presumption of validity, with the court called on to evaluate, among the relevant circumstances, a non-final decision in Hungary to revoke the patent, a non-final decision by EPO to revoke the European patent validated in Hungary, or a decision to revoke the same European patent in another EPC contracting state

13 Implementation of the Directive in Hungary: debates and results (cont.) general rules of the Code on Civil Procedures require the court to satisfy itself that the advantages, beneficial effects of a provisional measure do outweigh the disadvantages, negative effects thereof - need to correct the courts’ restrictive interpretation according to which only the negative effects on the defendant are to be taken into account - analogy with Articles 7, 8 (1) and 30 of the TRIPS Agreement: legitimate interests of third parties and public health considerations - result: when weighing the benefits and drawbacks of the provisional measure sought, the court is to take account of the fact that the measure would obviously and significantly violate the public interest or the legitimate interest of third parties

14 Implementation of the Directive in other MSs: the state of play information from the Commission: ”7 MSs should transpose by the deadline, and a further 3 should do so within three months of the deadline” 9 March 2006: a meeting organised by the Commission on the transposition of the Directive – 9 MSs (CZ, DK, EE, ES, FI, HU, IT, LT, SLO) indicated that they would transpose the Directive by the end of April

15 Enforcing plant variety rights in Hungary until 2003: protection of breeders’ rights through patents (UPOV 1978) since 1 January 2003: sui generis protection for plant varieties (separate chapter of the Patent Act, compliance with UPOV 1991 and the CPVR) enforcement-related provisions in the CPVR; Art. 2(1) of the Directive; and the relationship between national law and the CPVR in respect of infringement

16 Enforcing plant variety rights in Hungary (cont.) Article 114/C of the Hungarian Patent Act: provisions on patent infringements must apply to infringiments of plant variety rights Article 114/V: the same effect with respect to the procedures to be followed in plant variety infringement cases all changes introduced to implement the Directive in the field of patents apply mutatis mutandis to plant variety rights specific features and characteristics of plant variety rights: courts have the authority to take due account of them

17 Enforcement – an outlook the impact of the Directive on the EPLA the relationship between the Directive and the Regulations on Community IP rights new EU proposals concerning criminal sanctions

18 Thank you for your attention. Mihály Ficsor Hungarian Patent Office