RESTRICTEDWORLD TRADE
ORGANIZATIONIP/Q4/HUN/1
22 October 1998
(98-4111)
Council for Trade-Related Aspects
of Intellectual Property RightsOriginal:  English
REVIEW OF LEGISLATION ON ENFORCEMENT
HUNGARY1
The present document reproduces the introductory statement made by the delegation of
Hungary, the questions put to it and the responses given in the review of legislation on enforcement atthe Council's meeting of 17-21 November 1997.
2
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I. INTRODUCTORY STATEMENT
We have noted with pleasure the deep interest of certain Members in the Hungarian legal
situation concerning enforcement of intellectual property rights as reflected by the great number oftheir questions that we have received.  However, we would like to indicate that we already offereddetailed information on most of these questions when we responded to the Checklist of Issues onEnforcement.
3  In addition, we also notified the relevant laws and regulations to the Council for
TRIPS in due time.  We believe that the materials made available include sufficient information inrespect of a number of questions addressed to us.  We would have preferred if those sources ofinformation had been used to a larger extent by those Members that showed specific interesttowards our legal system.  Answering these questions caused unnecessary extra work for us,therefore we kindly ask our partners to use the available information more efficiently in the future.
Aspects of enforcement of intellectual property rights had been gaining importance in
Hungary even before the TRIPS Agreement entered into force.  However, since then, Hungary'sefforts to increase the efficiency of intellectual property law enforcement have been reinforced andextended.  As a result, the present Hungarian legislation fully complies with the requirements of theTRIPS Agreement, including Part III.  In order to permit effective action against any act ofinfringement of intellectual property rights covered by the Agreement, Hungary has ensured thatadequate remedies and appropriate procedures are available under its law in all relevant branches oflegislation.
As regards specific areas of enforcement of intellectual property rights, let me highlight the
following features of Hungarian laws and regulations.
                                                     
1 As regards laws and regulations relevant to the area under review and notified by Hungary under
Article 63.2 of the Agreement, reference is made to documents IP/N/1/HUN/1/Rev.2 (Annex I) andIP/N/6/HUN/1.
2 The minutes of this meeting have been circulated as document IP/C/M/16.
3 Document IP/N/6/HUN/1.IP/Q4/HUN/1
Page 2
Civil procedures and remedies, including provisional measures
In 1995, the rules of the Code on Civil Procedure (Act No. III of 1952) were amended in
order to bring Hungarian legislation in line with Article 50 of the TRIPS Agreement as well as inlight of experience gained from industrial property and copyright infringement cases, and of thepractical needs appearing in this field.  A detailed description of the amended provisions can befound in Hungary's reply to question 10 of the Checklist of Issues on Enforcement.
4
A further step to increase the efficiency of civil law remedies and procedures in
infringement cases was taken by Hungary this year.  As part of the new Trademark Act (ActNo. VII of 1997), special provisions on provisional measures applicable in the case of infringementof any intellectual property right have been adopted.  These provisions have introduced a statutorypresumption in favour of intellectual property right holders that there is a need to protect a right"deserving special appreciation" (as is required by the general rules of the Code on CivilProcedures), if the applicant certifies that the work, invention, trademark or other subject matter islegally protected, and that he is entitled to that protection, i.e. he is the owner, or the dulyauthorized licensee of the intellectual property right in question.  Furthermore, courts have been putunder the obligation to decide on requests for provisional measures within fifteen days, at the latest,counted from the day of submission of such a request.
Another important development introduced by the new Trademark Act is that courts have
been given the authority to subject the ordering of preliminary production of evidence to providing asecurity.  This is seen as a legislative means to increase the willingness of courts to issue  ex parte
orders concerning production and preservation of evidence.
In addition to the new rules on provisional measures and search orders, provisions on the
production of evidence have been made more favourable to intellectual property right holders.Under the new rules introduced by the Trademark Act where, in the course of proceedings forintellectual property infringement, one of the parties has already made the facts likely to a dueextent, the court may, at the request of the party producing evidence, require the adverse party topresent any relevant document and other exhibits in his possession, and to make inspection possible.It is in this way that Hungarian law complies with Article 43.1 of the TRIPS Agreement.
Substantial civil law remedies have also been complemented by the new Trademark Act.
Under the new rules, any intellectual property right holder may, in the case of infringement,demand that the infringer give information on the identity of third persons involved in theproduction and distribution of the infringing goods and in the supply of such services, and on thechannels of distribution.
Furthermore, by virtue of the new Trademark Act, it has become possible to request the
seizure of the tools and materials used exclusively or predominantly for infringement, and of theinfringing products or the packaging thereof.  The court may rule, at the request of the right holder,that the infringing features of the tools, materials, products and packaging seized be removed or,where it is not possible, that they be destroyed.  Seizure of the tools and materials used forinfringement, and of the infringing products and packaging, is admissible even though they are notin the ownership of the infringer if the owner knew or had reasonable grounds to know of theinfringement.
                                                     
4 Document IP/N/6/HUN/1.IP/Q4/HUN/1
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Border measures
One of the most important legislative steps to make Hungarian legislation fully compatible
with enforcement-related provisions of the TRIPS Agreement was the adoption, in July 1997, of
Government Decree No. 128/1997 on Border Measures Applicable against Infringement ofIntellectual Property Rights in Customs Administration Procedures.  The Decree, which entered into
force on 1 August 1997, is not only in conformity with Articles 51 through 61 of the TRIPS
Agreement, but it goes beyond some of their minimum requirements.  For instance, the Decree is also
applicable to the exportation and re-exportation of infringing goods, while the mandatory provisions
of the TRIPS Agreement are limited to the importation of such goods.
Criminal procedures
As to criminal procedures, let us point out that in Hungary the first line of attack against
infringement of intellectual property rights was a criminal law-oriented one.  In May 1993, the
Hungarian Criminal Code was amended to qualify infringement of copyright and neighbouring rights
as a crime, the most serious penalty of which is imprisonment of five years.  Infringement of
copyright and neighbouring rights constitutes a crime even in those cases where it is committed bynegligence or on a non-commercial scale.  Therefore, the Hungarian Criminal Code provides for a
more far-reaching protection against, and a more powerful deterrent to, infringements than what is
required by Article 61 of the TRIPS Agreement.  Under  the relevant provisions of the Criminal Code,
confiscation of those objects (goods, tools, etc.) that result from, or that are used for, the commission
of the offence is admissible even when the owner of  the goods is not the offender but is aware of the
commission of the crime.
In addition, as a result of an amendment to the Criminal Code in 1994, false indication of
goods also amounts to a crime which can be punished by imprisonment up to three years.
In conclusion, Hungary has established an appropriate legislative framework for the
enforcement of intellectual property rights in accordance with the relevant provisions of the TRIPSAgreement.  It is on this solid basis that Hungary intends to further increase the efficiency ofenforcing  intellectual property rights by, among other things, providing intensive training for theofficials concerned, or strengthening the cooperation between the authorities in charge of lawenforcement.
Finally, let me mention that we have recently received a few further questions from the
European Communities
5 to which we intend to reply according to the usual procedures for
responding to follow-up questions as set out by the Council for TRIPS.  However, I would like todraw the attention of the disti nguished representative of the Euro pean Communities, that some of
these new questions have already been responded to in the reply to their question 1.
II. REPLIES TO QUESTIONS POSED BY THE EUROPEAN COMMUNITIES AND
THEIR MEMBER STATES
1. Hungarian courts typically award quite modest damages to successful plaintiffs in cases
involving intellectual property rights.  Given this practice, please explain how Hungarycomplies with Article 45.1 of the TRIPS Agreement ("...adequate to compensate for theinjury...") and 41.1 of the TRIPS Agreement ("...remedies which constitute a deterrent tofurther infringements").
                                                     
5 These are contained in question 7 from the EC below.IP/Q4/HUN/1
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Damages awarded by Hungarian courts to successful plaintiffs in cases involving intellectual
property rights vary from case to case, depending on the circumstances.  Whether damages awardedby the court are adequate to compensate for the injury the right holder has suffered because of aninfringement can only be judged on a case-by-case basis.  It seems obvious that plaintiffs in casesinvolving intellectual property rights are not satisfied with the damages the court awards to them ineach and every case.  However, it does not appear well founded to state that it is typical ofHungarian courts to award only "quite modest" damages to successful plaintiffs in intellectualproperty cases.
Under Article 35(2) of Act No. XXXIII of 1995 on the Protection of Inventions by Patents
(hereinafter referred to as the "Patent Act"), the patentee may, in addition to other remedies, claimdamages in accordance with the rules of civil liability.  Similar provisions can be found in all otherintellectual property laws of Hungary.  Therefore, Article 355 of the Civil Code (Act No. IV of1957) is the legal authority determining the factors to be considered in establishing the amount ofcompensation.
It reads as follows:"(1) The person liable for the damage shall restore the original state, and if it is not
possible, or if the damaged person does not so wish for a well-founded reason, heshall compensate for the pecuniary and non-pecuniary damage of the damagedperson.
"(2) Damage shall be compensated for in cash, unless the circumstances justify
compensation in kind.  Compensation in kind may be especially justified if theobject of compensation for damages is produced by the person causing the damage,too, or it is otherwise at his disposal.
"(3) An annuity can also be stipulated as compensation.  Usually, an annuity shall be
ordered if compensation is aimed at the support or supplementing the support of thedamaged person or his relative entitled to be supported by him.
"(4) Under the title of compensation for damages, the decrease in value of the property
of the damaged person and pecuniary advantage lost due to the circumstance havingcaused the damage, as well as the indemnity or costs necessary for lessening oreliminating the pecuniary and non-pecuniary damages sustained by the damagedperson shall be compensated for."
Therefore, Hungarian law complies with Articles 41.1 and 45.1 of the TRIPS Agreement.2. Please clarify:
(a) how long the civil procedures for enforcing an intellectual property right will
take under current court practice in Hungary (from initiation of the procedurethrough the issuance of a judgement by the court of first instance);
(b) what would be regarded as the average length of time involved in the
disposition of a criminal case involving intellectual property right
infringements;IP/Q4/HUN/1
Page 5
(c) whether, as a result, Hungarian law implements Article 41.2 of the TRIPS
Agreement, which states that enforcement procedures shall not entailunwarranted delays.
Civil procedures for enforcing intellectual property rights take, under current court practice,
approximately one year from the initiation of the procedure through the issuance of a judgement bythe court of first instance.
The average length of time involved in the disposition of a criminal case involving
intellectual property right infringements is one to two years.
In our view, Hungarian law implements Article 41.2 of the TRIPS Agreement which states
that "enforcement procedures shall not entail unwarranted delays".
There are two kinds of time-limits established by Hungarian law for judicial and
administrative proceedings.  On the one hand, time-limits are established for courts oradministrative bodies.  On the other hand, time-limits are also set for the parties.  As to the former,it is only customs administration procedures in which time-limits for the customs authorities apply.Provisions of the latter kind can be found not only in the Border Measures Decree (GovernmentDecree No. 128/1997 (VII. 24.) Korm. on Borders Measures Applicable against Infringement ofIntellectual Property Rights in Customs Administration Procedures) but also in the Code of CivilProcedure (Act No. III of 1952) and the Code of Criminal Procedure (Act No. I of 1973).  In theCode of Criminal Procedure some time-limits are established for the inspecting authorities and forthe prosecutor as well.  However, neither the Code of Civil Procedure nor the Code of CriminalProcedure contains any time-limit to be respected by courts in the course of their proceedings.
Time-limits in customs administration procedures:
- Article 5(1) of the Border Measures Decree establishes a time-limit of five working
days following the filing date of the application for the customs authorities to rendera decision on the merits of the case.
- The applicant must verify within ten working days following the receipt of the
decision by the customs authorities ordering the direct supervision of the infringinggoods that a civil action for infringement has been instituted by  the applicant, in
which an application for a provisional measure by the court has been submitted.That time-limit can be extended by another ten working days when justified(Article 5(4) of the Border Measures Decree).
Time-limits in criminal procedures :
- The inspecting authorities must, based on the denouncement of the crime, decide on
the commencement or refusal of the investigation within three days following thefiling date of the denouncement.  This time-limit can be extended, if circumstancesso require, by fifteen plus fifteen plus thirty days by the heads of inspectingauthorities (Article 126(1) of the Code of Criminal Procedure).
- A criminal investigation has to be terminated within two months following the
ordering thereof.  This time-limit may, in appropriate cases, be extended by two
plus two months and, after that, by the Director of Public Prosecutors (Article 131of the Code of Criminal Procedure).IP/Q4/HUN/1
Page 6
- The inspecting authorities must forward the documentation to the prosecutor within
eight days following the date of notice on the termination of the investigation(Article 145(1) of the Code of Criminal Procedure).
- The prosecutor must examine the documentation and accordingly decide on the
continuation of the case within fifteen days.  In extraordinary circumstances, thistime-limit can be extended by another fifteen days (Articles 145(2) and 145(4) ofthe Code of Criminal Procedure).
- In the court phase, the judge, within eight days following the submission of the
documentation, decides on the continuation of the case, and, if no additionaldecisions are necessary, fixes a date for the hearing (Article 167(1) of the Code ofCriminal Procedure).
Time-limits in civil procedures :
- The usual time-limit established by the judge for the parties to carry out certain
actions in a lawsuit is fifteen days.
There are a number of provisions in the enforcement system in Hungary that ensure
expeditious remedies.  Criminal procedures and customs administration procedures, by their verynature, have the purpose of taking effective action against any act of infringement of intellectualproperty rights.  However, it is mainly in respect of remedies available in civil procedures whereHungarian legislation has quite recently made significant progress.  In particular, the specialprovisions on provisional measures and the preliminary production and preservation of evidence areworth mentioning.  These provisions, which were introduced this year, by the new Trademark Act(Act No. XI of 1997 on the Protection of Trademarks and Geographical Indications), are of aninterpretative nature in relation to the Code of Civil Procedure.  They have introduced a statutorypresumption in favour of intellectual property rights holders that there is a need to protect a right"deserving special appreciation" (as is required by the general rules of the Code of CivilProcedure), if the applicant certifies that the work, invention, trademark or other subject matter islegally protected, and that he is entitled to that protection, i.e. he is the owner, or the dulyauthorized licensee, of the intellectual property right in question.  Furthermore, courts have beenput under the obligation to decide on requests for provisional measures within fifteen days, at thelatest, counted from the day of submission of such  a request.  For further details of expeditious
remedies available under Hungarian law, see our replies to the questions related to specificprocedures and remedies.
As to deliberate delays, the short time-limits established by the Border Measures Decree
have the effect that parties are forced to avoid delays.  In addition, under Article 5(1) of the Codeof Civil Procedure the court has to prevent all actions which are aimed at, or may lead to, theunjustified prolongation of a lawsuit.  Articles 5(2) and 5(4) provide that the court should impose afine on a party or a representative who, by making false allegations or a declaration or undulydelaying in making statements, hinders the conclusion of the lawsuit.  According to Article 120, thefine may amount to Ft 50 000.
In addition, several other provisions in the Code of Civil Procedure (e.g. Article 105(1)
providing that parties are generally not allowed to validly perform an act once omitted, or
Article 107 establishing a time-limit of fifteen days  following the deadline omitted for justifying an
omission etc.) also raise obstacles to deliberate delays.IP/Q4/HUN/1
Page 7
3. In practice, the expenses awarded to a successful complainant in a civil enforcement
action are significantly less than the party's actual expenses.  In addition, the courts have adiscretion to establish the rate of attorney's fees awarded.  The level of such fees varies to agreat extent.  In light of this practice, please explain how Hungarian law complies withArticle 45.2 of the TRIPS Agreement.
Under Article 75 of the Code of Civil Procedure, the costs of proceedings are all costs
incurred either in or out of court in relation to the practical and bona fide conducting of a suit by theparties (costs of preliminary inquiries and correspondence, official fees of proceedings,authorization, etc., fees of witnesses and experts, remuneration of interpreters, costs of on-the-spottrial and inspection, etc.).
Disbursements and remuneration of the counsel of a party must also be added to the costs of
proceedings.
Under Articles 78 and 79 of the Code of Civil Procedure, the defeated party must refund
the costs of litig ation of the prevailing party.  The court determines the amount of costs of litigation
taking into consideration the data provided and duly certified by a party.  Such costs, in accordancewith Article 45.2 of the TRIPS Agreement, include appropriate attorney's fees.
An additional provision can be found in Article 95(3) of the Patent Act which provides that
the expenses and fees of the patent attorney representing a party are to be added to the costs of theproceeding.
However, it belongs to the discretionary power of the court, whether the total amount of the
invoice of the counsel of the right holder (the total retainer fee stipulated by the right holder and hiscounsel) will be regarded as a justified expense.  Normally, a maximum of 5% of the total amountdisputed or in extremely complicated cases 5% + 50% thereof, i.e. 7.5% is awarded as a justifiedcounsel's fee.  This calculation is based upon the mandatory rule (Article 1) of the Decree of theMinister of Justice No. 12/1991 (IX. 29.) IM on the legal counsels' expenses.  It is to be noted thatthe actual costs (telecommunication, photocopying, travel, accommodation, typing and similarmiscellaneous costs) paid in connection with the legal counsel's activity are to be reimbursed on topof the fee on the basis of a detailed account of the said costs to be filed by the legal counsel(Article 2).  In practice, Hungarian counsels frequently neglect this obligation, they file no accountof costs, i.e. they do not use the possibility to have the actual costs reimbursed on top of their fee.
4. Please explain how Hungary complies with Article 48.1 of the TRIPS Agreement,
which provides that "judicial authorities shall have the authority to order a party at whoserequest measures were taken and who has abused enforcement procedures to provide to aparty wrongfully enjoined or restrained adequate compensation for the injury sufferedbecause of such abuse".
In the sphere of  civil law, general principles such as the doctrine of acting in good faith and
the doctrine prohibiting the abuse of rights can be mentioned as means available to prevent
unlawfully initiated procedures.  The Civil Code establishes those doctrines in Articles 4 and 5 inthe following way:
"4(1) In the course of the exercise of civil rights and the performance of obligations,
parties shall act in accordance with the requirement of good faith (...).IP/Q4/HUN/1
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"5(1) The abuse of rights is prohibited by law.
"5(2) Exercise of a right shall qualify as abuse of rights if it is directed to an aim
irreconcilable with the social purpose of the right, especially if it leads to (...)harassment of persons, injury of their rights or legitimate interests, or theacquisition of unjust advantages."
The doctrine of acting in good faith also appears in Article 5(1) of the Code of Civil
Procedure and Article 120 provides a possibility for the courts to impose a fine up to Ft 50 000 on aparty acting in bad faith.
In addition, various other provisions of the Code of Civil Procedure also raise obstacles to
unlawful action, e.g. Article 121. 1 requiring that the institution of  an action should involve the
indication of the facts providing grounds for the right to be enforced and also the enclosure of thenecessary evidence thereof, especially documents verifying those facts.  If a party does not meetthose requirements when filing an action, the judge will give the submission back to that party forcompletion, fixing a short time-limit, the unsuccessful lapse of which will cause the rejection of thepetition, i.e. the failure of taking the action (Article 95(1) of the Code of Civil Procedure).  Article95(2) requires the simultaneous payment of fees by parties submitting a petition.  As to furtherfinancial consequences, under Article 78, the defeated party must refund the costs of the prevailingparty and under Article 80(2) a party who is unsuccessful in certain acts or fails to meet a deadlineor causes unnecessary costs in any other way cannot, under any circumstances, claim the refundingof its costs originating thereof.
In respect of customs administration procedures, Article 3(4) of the Border Measures
Decree lists the persons entitled to apply for such measures to the customs authorities, and under
Article 4(1) an applicant must verify both the existence of the trademark, geographical indication orcopyright protection and its entitlement to file the application.  Articles 4(1) and 4(2) contain otherspecific criteria that must be met by the applicant, and a security must also be deposited at thecustoms authorities (Article 8(1) of the Border Measures Decree).  If those requirements are notmet, the application will be rejected and, therefore, no measures will be taken by the customsauthorities (Article 5(2) of the Border Measures Decree).  In the case of a successful application,the applicant must institute a civil action for infringement and apply to the competent court for aprovisional measure and the applicant must also present sufficient evidence to support its claim(Article 5(4) of the Border Measures Decree).
In criminal procedures, general principles such as the doctrine of the right of defense and
the presumption of innocence (Articles 3 and 6 of the Code of Criminal Procedure) are applicable
against abuse which can also be prevented, even before the case enters the court phase, by theinspecting authorities that are entitled to deny or to discontinue the investigation.  The prosecutormay also omit to refer the case to the court or, during the court phase the prosecutor may drop thecharge (Articles 127(1), 139(1),145(2) and 170(1) of the Code of Criminal Procedure).  In addition,false charge is a crime under Articles 233-236 of the Criminal Code (Act No. IV of 1978).
As to damages suffered because of an abuse, a general provision (Article 339(1) of the Civil
Code) can be applied which provides that any person who unlawfully causes damage is obliged togive the injured party compensation for it.
5. Please explain how Hungary complies with the requirement of Article 50.1 of the
TRIPS Agreement to provide "prompt and effective" provisional measures.IP/Q4/HUN/1
Page 9
Under Article 156 of the Code of Civil Procedure, the court may order by a provisional
measure, on request, compliance with the action claim (counterclaim) or with any special claimcontained in the request for a provisional measure.  A provisional measure can be obtained if it isnecessary to prevent imminent damage, or to preserve circumstances giving rise to litigation or toprotect the petitioner's rights deserving special appreciation.  Furthermore, the court should besatisfied that the drawbacks caused by the measure do not outweigh the benefits attainable by it.The court may subject the ordering of a provisional measure to a security to be provided by theapplicant.  The facts on which the request is based must be made likely.  The request for aprovisional measure can only be submitted after the statement of claim has been filed.  The court,however, may decide on the provisional measure even before the first trial.  The court is required todecide on a provisional measure promptly, but prior to that, it has to hear the parties personally orallow them to present their cases in writing.  The hearing of the parties may only be omitted if theprovisional measure is urgently needed, or if the party concerned does not comply with the time-limit or period fixed for the hearing.  Although an appeal may be lodged against the court's decisionordering a provisional measure, it does not necessarily have a suspensive (delaying) effect on theexecution of the measure, i.e. it can be executed in advance.
These provisions of the Code of Civil Procedure (as amended by Act No. LX of 1995) meet
the requirements of Article 50 of the TRIPS Agreement.
Special provisions on provisional measures applicable in the case of infringement have been
included in Hungarian industrial property and copyright laws by the Trademark Act and arecontained in the Trademark Act itself.
Those provisions are of an interpretative nature in relation to the Code of Civil Procedure,
and are designed to reflect the specialties of intellectual property cases so that they should enhancethe efficiency of enforcement.  They have introduced a statutory presumption in favour ofintellectual property rights holders that there is a need to protect a right "deserving specialappreciation" (as is required by the general rules of the Code of Civil Procedure), if the applicantcertifies that the work, invention, trademark or other subject matter is legally protected, and that heis entitled to that protection, i.e. he is the owner, or the duly authorized licensee, of the intellectualproperty right in question.  However, this presumption does not apply where six months havealready elapsed from the beginning of the infringement, or sixty days from the date on which theapplicant became aware of the infringement and the identity of the infringer.  (Nevertheless, in sucha case a provisional measure can still be obtained, but only under the general rules of the Code ofCivil Procedure, i.e. without the "help" of the statutory presumption.) Furthermore, courts havebeen put under the obligation to decide on requests for provisional measures within fifteen days, atthe latest, counted from the day of submission of such a request.
The relevant provisions are the following: Articles 95 (2)-(4) of the Trademark Act,
Articles 52 (3)-(5) of the Copyright Act (Act No. III of 1969), Articles 20 (3)-(5) of the IndustrialDesign Decree (Law Decree No. 28 of 1978), Articles 104 (3)-(5) of the Patent Act.
Furthermore, Articles 207-211 of the Code of Civil Procedure provide that, upon request of
the party concerned, preliminary production of evidence is admissible either before or during theaction, if, among others, it seems likely that evidence could not successfully be taken during theaction or in a later stage of the action, or it would entail considerable difficulties.  In urgent cases,the court may decide on the preliminary production of evidence even without hearing the adverse
party.  In cases of infringements of intellectual property rights, courts may subject the ordering of
preliminary production of evidence to providing security (Article 95(6) of the Trademark Act,IP/Q4/HUN/1
Page 10
Article 52(7) of the  Copyright Act, Article 20(7) of the Industrial Design Decree, Article 104(7) of
the Patent Act).
See also Hungary's reply to question 10 of the Checklist of Issues on Enforcement.6
6. Please explain whether Hungary provides procedures for the suspension of release by
customs authorities of suspected counterfeit trademark goods or pirated copyright goods asrequired by Articles 51 to 60 of the TRIPS Agreement.
Under the provisions of the Border Measures Decree, in order to prevent the internal entry
into free circulation (i.e. the importation), the export or re-exporting of the illegal (infringing)goods either a specific  or a general
 application may be submitted to the competent customs
authority.  The action of the customs authority may be requested regarding specific illegal
(infringing) goods or shipments in the case of a specific application, whereas, in the case of ageneral application, the action may be required in relation to a specified producer or country oforigin for a period of up to six months.
The specific application must be submitted at the customs office where the import or export
of the illegal goods is expected to take place or where the customs clearance of such goods has beeninitiated.
Specific applications - where the place of the customs clearance is unknown - and general
applications must be submitted to the National Headquarters of the Customs and Finance Guard.
A written application by the right holder is required which must contain the following:(a) the verification that the protection of the trade mark, or the geographical indication,
or of the copyright or neighbouring rights in question exists in relation to thecustoms goods;
(b) a statement that the person is entitled to act against the infringement;(c) that person's request that the customs authority should take the appropriate
measures to place the illegal goods under direct customs supervision;
(d) the description and relevant characteristics of the customs goods to facilitate
identification, and the circumstances, data, documents which suggest that theinfringement is probable;
(e) the acknowledgement of the obligation to provide the security which is required by
Article 8 of the Decree;
(f) in the case of a general application, the period for which the observation is
required.
The right holder must communicate the following to the customs authority, provided he is
aware of them:
(a) the place where the customs goods can be found or their place of destination;
                                                     
6 Document IP/N/6/HUN/1.IP/Q4/HUN/1
Page 11
(b) such detailed data that enable the shipment, consignment or the package to be
identified (with special regard to the data concerning the packaging and value of thecustoms goods and the transport vehicle);
(c) the denomination of the importer, exporter or the owner of the customs goods;(d) the expected time and place of arrival or departure of the customs goods;(e) all information concerning the customs goods or those involved which may be of
assistance to the customs authority.
Under Article 5 of the Border Measures Decree, the customs authority has to take a
decision on the merits within five working days of the date when the application was lodged.  If aspecific application has been lodged to request a measure in relation to customs goods which havebeen submitted for customs clearance, the customs authority has to take its decision within fivedays, taking into account the needs of the customs clearance proceeding.
On the basis of an accepted application, the customs authority places the customs goods
under direct customs supervision for ten working days ,  and the right holder is forthwith notified
thereof.  This deadline may be prolonged by ten working days in a justified case.
Under Article 8 of the Border Measures Decree, the right holder must provide a security
for the customs authority in order to cover the costs of warehousing the customs goods which areplaced under customs supervision.  The security is also required of the applicant for the costs ofdestroying if the customs goods are to be destroyed, and for the possible damages payable to theperson submitting th e goods for customs clearance.
The amount of the security is 5% of the value of the customs goods if their value can be
established.  If their value cannot be established, the security is a monthly Ft 60 000 (approximatelyUS$ 300) for each application.  If a general application for a border measure cannot indicate thevalue of the goods, and, at the same time, it is filed for a period of six months, the amount ofsecurity is as high as Ft 360 000.  If the application specifies more countries of origin, or more thanone type of goods, it obviously entails the corres ponding multiplication of the amount of Ft 60 000
(which is the basic amount of security).
If the amount of the security does not cover the costs mentioned above, the right holder
must pay for the difference.
The customs authority, taking into account the binding decision of the court on the merits of
the case, must account for the amount provided by the applicant as a security in accordance with therules of Act No. C of 1995 on Customs Law, Customs Proceedings and Customs Administration.
The right holder must prove within ten working days of receiving the notification on the
suspension of infringing goods that he has taken an action for infringement and has applied for aprovisional measure to be ordered by the  court.
If the right holder makes a statement that he does not wish to exercise his rights, or fails to
prove that he has applied for a provisional measure, or if the application for such a measure has
been rejected by the court, the customs authority must forthwith notify the person submitting thegoods to customs clearance, and, following this, the customs goods must be treated in accordanceIP/Q4/HUN/1
Page 12
with the application of this latter person.  At the same time, the customs authority notifies the right
holder of putting an end to the direct customs supervision.
Under Articles 5 and 6 of the Border Measures Decree, the right holder must prove within
ten working days of receiving the notification that he has taken an action for infringement and hasapplied for a provisional measure to be ordered by the  court.  The court decides, within fifteen
working days of receiving the application for an interim measure, at the latest, whether to maintainthe suspension as a seizure or release the goods.
The importer, consignee or owner might lodge an application for compensation for injury
caused by wrongful detention or through the detention pursuant to Article 55 of the TRIPSAgreement to the competent court, in a separate procedure.
7. With regard to cases that involve the infringement of intellectual property, could the
Government of Hungary provide data on the number of:
- law suits that have been filed including their respective outcome and the
average length from the filing of a complaint until the final judgement;
- injunctions that have been issued (as defined in Article 44 of the TRIPS
Agreement) and explain how such injunctions are being enforced;
- provisional measures (as defined in Article 50 of the TRIPS Agreement) that
have been granted and the average length to obtain such measures (from therequest);
- suspensions at the border of counterfeit trademark, pirated copyright goods or
in relation to goods where other intellectual property rights are infringed;
- criminal cases including the sentences that have been applied;  whether they
have been executed;  and please also explain what kind of infringement of anintellectual property right would be regarded as a violation of criminal law;
- seizures and/or destruction of counterfeit trademark and pirated copyright
goods.
Furthermore, could the Government of Hungar y explain and give practical examples of:
- how the compensation for damages of the infringement of intellectual property
rights is calculated (Article 45.1 of the TRIPS Agreement);
- what would be regarded as "expenses of the right holder" which have to be
reimbursed pursuant to Article 45.2, first half of the first sentence, of theTRIPS Agreement and how they would  be calculated;
- whether attorney's fees can be reimbursed and how such fees would be
calculated;
- whether Article 45.2, second sentence, of the TRIPS Agreement has been
implemented in Hungary and how such "damages" would be calculated?IP/Q4/HUN/1
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The Government of Hungary would like to confirm its previous position relating to the
submission of statistical data.  Articles 63.1, 63.2 and 63.3 of the Agreement required Members to
publish, or make publicly available, laws and regulations and final decisions and administrative
rulings of general application and also laid dow n notification requirements with regard to these.
However, neither these provisions, nor any other pr ovision of the Agreement created any obligation to
collect, publish and notify statistical data on infringement cases and on enforcement measures.Hungarian authorities could only provide such specific data if they developed a separate system for
collecting intellectual property rights-related data.  This would require the establishment of an
information system within the judiciary distinct fr om that for the enforcement of laws in general,
which would not be in harmony with Article 41.5 of the Agreement.
To the last four points of the question, see the replies to question numbers 1 and 3 from the
EC.
III. REPLIES TO QUESTIONS POSED BY JAPAN
1. Please indicate the "competent authorities" stipulated in Article 51 of the TRIPS
Agreement.
The competent authority in Hungary authorized to accept applications for a request to
suspend release of suspected infringing goods is the customs office where the import or export ofillegal goods is expected to take place, or wher e the customs clearance of such goods has been
initiated, or, in the case of a so-called general application, it may be the National Headquarters ofthe Customs and Finance Guard.
2. Please explain whether "proceedings leading to a decision on the merits of the case"
stipulated in Article 55 of the TRIPS Agreement, are judicial or administrative.
The "proceedings leading to a decision on the merits of the case" are judicial proceedings.The right holder must prove within ten working days of receiving the notification of the
suspension of infringing goods that he has taken an action for infringement and has applied forprovisional measure to be ordered by the court.
3. Are there any ways other than the application stipulated in Articles 51 and 52 of the
TRIPS Agreement (hereafter referred to as "the Application") which enable a right holder torequest the competent authorities to suspend the release of the goods which infringeintellectual property rights or which are suspected to infringe intellectual property rights?
There are no any ways other than the application (stipulated in Articles 51 and 52 of the
TRIPS Agreement) which enable a right holder to request the competent authorities to suspend therelease to the goods which infringe intellectual property rights or which are suspected to infringeintellectual property right, but the customs authority shall take measures ex officio, to place thecustoms goods under direct customs supervision, or must place the customs goods to a bondedwarehouse if it obtains such data through its other proceedings, on the basis of which it is probablethat the goods submitted for customs clearance are illegal goods.
4. Please explain what term your country regards as "a reasonable period within which
the competent authorities shall inform the applicant whether or not they have accepted theApplication" stipulated in Article 52 of the TRIPS Agreement.IP/Q4/HUN/1
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Under Section 5 of Government Decree No. 128/1997 (VII. 14.) Korm. on field of customs
administration proceedings against the infringement of intellectual property rights (the BorderMeasures Decree), the customs authority has to take a decision on the merits within five workingdays of the date when the application was lodged.  If a specific application has been lodged torequest a measure in relation to customs goods which have been submitted for customs clearance,the customs authority has to take its decision within five days, taking into account the needs of thecustoms clearance proceeding.
On the basis of an accepted application, the customs authority places the customs goods
under direct customs supervision for ten working days , and the right holder is forthwith notified
thereof.  This deadline may be prolonged by ten working days in a justified case.
5. Please explain the term during which the Application is effective.
The right holder must prove within ten working days of receiving the notification of the
suspension of infringing goods that he has taken an action for infringement and has applied for aprovisional measure to be ordered by the court.  This deadline may be prolonged by ten workingdays in a justified case.  If the right holder makes a statement that he does not wish to exercise hisrights, or fails to prove that he has applied for a provisional measure, or if the application for such ameasure has been rejected by the court, the customs authority must forthwith notify the personsubmitting the goods to customs clearance, and, following this, the customs goods must be treatedin accordance with the application of this latter person.  At the same time, the customs authoritynotifies the right holder of putting an end to the direct customs supervision.
6. Please explain whether a right holder is obliged to pay any fees to lodge the
Application.
The cost of the custom procedure is included in the amount of the security.  The amount of
the security shall be 5% of the value of the customs goods if their value can be established.  If theirvalue cannot be established, the security shall be a monthly Ft 60 000 for each application.  If theamount of the security does not cover the cost s, the entitle d person must pay the difference.
7. Please indicate provisions of laws and ordinances which prescribe the "proceedings
leading to a decision on the merits of the case" stipulated in Article 55 of the TRIPSAgreement. And please summarize their contents.
In these cases the said proceeding shall be a complaint lodged to the competent court.  The
complaint shall contain a petition for an appropriate provisional measure.
In court proceedings concerning trademark infringement the Metropolitan Court has
jurisdiction and exclusive competence.  According to the provisions of the new Trademark Act, ininfringement proceedings, where a party has presented reasonably available evidence sufficient tosupport its claims, the judge may order - at the request of the opposing party - the party to producedocuments and other evidence which are within its control.  The court may subject the ordering ofpreliminary production of evidence to providing security.  Similar provisions have been included inother industrial property legislation and in the Copyright Act by the new Trademark Act.
Law No. III of 1952 on Civil Procedure contains the rules of provisional measures
applicable in intellectual property right infringement cases as well.  According to the last
amendment of the Code of Civil Procedure the court may order by a provisional measure, onrequest, compliance with the claim for action (counterclaim) or with the request for a provisionalIP/Q4/HUN/1
Page 15
measure if it is necessary to avert imminent damage, or to maintain unchanged circumstances giving
rise to litigation or to protect the petitioner's, rights deserving special appreciation and if thedrawbacks caused by the measure do not outweigh the benefits attainable by it.  The court maysubject the ordering of provisional measures to providing security.  The facts on which the requestis based must be made likely.  The request for a provisional measure cannot be submitted beforefiling the statement of claim, however, the court may decide on the provisional measure before thefirst hearing.  The court decides on the provisional measure out of turn, but prior to that it hears theparties personally or allows them to reply to the request in writing.  The hearing of the parties mayonly be omitted in case of urgent need or if the party does not comply with the time-limit or periodfixed for the hearing.  Although it is possible to lodge an appeal against the decision on theprovisional measure, this measure may be executed in advance.
Special provision on provisional measures applicable in the case of infringement have been
included in our industrial property and copyright legislation by the new Trademark Act.
According to them in intellectual property litigation, it will be sufficient for courts to
assume that a provisional measure is necessary to protect the petitioner's rights deserving specialappreciation if evidence is provided that the applicant is the right holder or otherwise entitled to actin the procedure and that the legal protection exists.
These provisions shall not be applied where six months have already elapsed from the
beginning of trademark infringement or 60 days from the date on which the petitioner became awareof the infringement and of the identity of the infringer.
The court shall decide on the provisional measures out of turn, however, not later than
within 15 days from the filing of a request to this effect.
In a proceeding for intellectual property right infringement, the court may subject ordering
of preliminary production of evidence to providing security.
8. Please explain the specific procedure, if any, to be applied to the goods which are not
evident whether or not they infringe intellectual property rights, in Article 55 of the TRIPSAgreement.
The customs authority shall proceed in relation to the illegal (infringing) goods in
accordance with the decision of the court which rules a provisional measure, to be taken.
The customs authority shall implement the customs clearance of the customs goods in
accordance with the provisions of the binding decision of the court which ends the procedure.
9. Please explain the responsibility that the competent authorities and other related
authorities take to the right holders when they fail to suspend the release into free circulationof goods which infringe intellectual property rights with regard to the suspension based on theApplication or the Ex Officio Action stipulated in Article 58 of the TRIPS Agreement.
See the reply to question 11.
10. Please explain the responsibility that the competent authorities and other related
authorities take to the right holders when they examine goods which infringe intellectual
property rights and nevertheless release them into free circulation with regard to theIP/Q4/HUN/1
Page 16
suspension based on the Application or the Ex Officio Action stipulated in Article 58 of the
TRIPS Agreement.
See the reply to question 11.
11. Please explain the responsibility that the competent authorities and other related
authorities take to the importers when they suspend the release into free circulation of goodswhich do not infringe intellectual property rights with regard to the suspension based on theApplication or the Ex Officio Action stipulated in Article 58 of the TRIPS Agreement.
We have no special provisions for the responsibility of the competent authorities prescribed
in the above questions.
Under Article 349 of the Civil Code, liability for damage caused in the sphere of state
administration shall be established only if the damage could not be prevented by ordinary legalremedies.  These rules shall also apply to liability for damages caused within the sphere of authorityof courts and prosecutors offices.
12. Is the right holder informed of identities of the importers and consignors when the
competent authorities "suspend" the goods which infringe on intellectual property rights orwhich are suspected to infringe intellectual property rights, as well as the case where the rightholder is informed of identities of the importers and consignors stipulated in Article 57 of theTRIPS Agreement?
The customs authority, observing the provisions on the protection of data, has to provide
information, at the request of the right holder, on the person applying for the customs clearance, onthe name and the address of the consignee of the customs goods, and it also has to ensure that theright holder may observe and examine the customs goods in order that the right holder can exercisehis rights.  For the purpose of accelerating customs proceedings the customs authority may takesamples from the custom goods.
13. Please explain the measures to protect confidential information in the course of the
inspection stipulated in Article 57 of the TRIPS Agreement.  And please indicate provisions oflaws and ordinances which prescribe such measures.
The customs authority, observing the provisions on the protection of data, has to provide
information, at the request of the right holder (which should be made in writing), on the personapplying for the customs clearance, and on the name and address of the consignee of the customsgoods.  In respect of the protection of personal data, Act No. LXIII of 1992 is also applicable.
14. Please explain the procedures of detentions and seizures to be ordered by the
competent authorities based on Articles 51 and 55 of the TRIPS Agreement.
There are no special provisions for the procedures of detentions and seizures ordered by the
competent authorities based on Article 51 and 55 of the TRIPS Agreement.  General provisions ofAct No. LIII of 1994 on Execution by Court are applicable.
15. Please explain the procedures to appeal against any decisions ordered by the competent
authorities based on Articles 51 and 55 of the TRIPS Agreement.IP/Q4/HUN/1
Page 17
According to Section 156(6) of the Code of Civil Procedure it is possible to lodge an appeal
against the court decision on the provisional measures in 15 days but this measures may be executedin advance.  According to the general provisions of Act No. C of 1995 on Customs Law, CustomsProceedings and Customs Administration there is a possibility to appeal against the decision of thecustoms authority ordering the customs goods requested in the application of the right holder underdirect supervision but the order must be enforced at once.
16. Please explain the basis for calculating the security or equivalent assurance stipulated
in Article 53 of the TRIPS Agreement that the competent authorities may require an applicantwhen they suspend the release into free circulation.
See the reply to question 6.
17. Please explain who shall pay the cost of detentions based on Article 51 of the TRIPS
Agreement or destruction stipulated in Article 59 of the TRIPS Agreement.
The customs authority, taking into account the binding decision of the court on the merits of
the case, shall account for the amount placed by th e entitle d person as a security in accordance with
the rules of the Act on Customs and Customs Procedure.
18. Please explain what kind of cases are regarded as "the exceptional circumstances" in
which the competent authorities may allow re-exportation of counterfeit trademark goodsstipulated in Article 59 of the TRIPS Agreement.
The competent authorities may allow re-exportation of counterfeit trademark goods which
are transit goods and which goods enter the customs territory through non commercial import (deminimis imports).
According to Section 1 (7) of Act No. C of 1995 on Customs Law, Customs Proceedings
and Customs Administration non commercial traffic is: importation or exportation of customsgoods, goods not constituting a commercial quantity, im ported by, arriving for, exported or sent out
by a natural person, to an individual or total value not exceeding the forint amount defined.
Alcoholic beverages: 1 litre of spirits
1 litre of wine5 litres of beer
Tobacco products: 500 cigarettes
  100 cigars or  100 grams of tobacco
Coffee, tea, cocoa and all spice herbs and their mixtures thereof 1 kilo each except for:
seasoning paprika and the mixture thereof.
Other goods: up to the value of Ft 500/item 10 per type
 up to the value of Ft 2 000/item 5 per type up to the value of Ft 5 000/ item 2 per type up to the value of Ft 5 000/item 1 per type
Motor vehicle: 1/year/familyIP/Q4/HUN/1
Page 18
19. Please indicate names of laws and ordinances and their provisions in which the
suspension of the release of goods which infringe intellectual property rights or which aresuspected to infringe intellectual property rights is prescribed, as stipulated in Article 51 of theTRIPS Agreement.
Government Decree No. 128/1997 (VII. 14.) Korm. on the measures in the field of customs
administration proceedings against the infringements of intellectual property rights (BorderMeasures Decree) contains the provisions relating to the suspension of the release of goods whichinfringe intellectual property rights or which are suspected to infringe intellectual property rights.
Persons entitled to submit an application are the owner of the trade mark, or the
geographical indication, and the holder of the copyright and neighbouring rights, the user of thetrade mark entered into the Register of Trademarks, in the case of copyrights and neighbouringrights, the user entitled to use those, and the organization dealing with the common administrationof copyrights and neighbouring rights.
The customs authority must take a decision on the merits concerning the application within
five working days of the date when it was lodged.  If a specific application has been lodged toinitiate a measure in relation to customs goods which have been submitted for customs clearance,the customs authority must take its decision within five days, taking into account the customsclearance proceeding.
The customs authority reject the application, if it has not been submitted by the right holder,
if the application does not meet the necessary requirements, or if the right holder does not providesecurity.
On the basis of the accepted application, the customs authority places the customs goods
submitted by the person requesting customs clearance under direct customs supervision, and theright holder is forthwith notified thereof.
The entitled person must prove within ten working days of receiving the notification that he
has taken an action for infringement and has taken legal proceedings for a provisional measure to betaken.  This deadline may be prolonged by ten working days in a justified case.
The right holder makes a statement that he does not wish to exercise his rights, or has not
proven his application for an interim measure as defined in paragraph 5 or if the application forsuch a measure has been rejected by the court, the customs authority shall forthwith notify theperson submitting the goods to customs clearance and following this, the customs goods shall betreated in accordance with the application of this latter person.  At the same time it notifies the rightholder about putting an end to the direct customs supervision.
The customs authority takes measures ex officio, to place the customs goods under direct
customs supervision, or shall place the customs goods in a bonded warehouse if it obtains such datathrough its other proceedings, on the basis of which it is probable that the goods submitted forcustoms clearance are illegal (infringing) goods.
If, in a proceeding initiated by the office, the person of the right holder cannot be
established, the customs authority contacts the Hungarian Patent Office in the case of an
infringement of trademark or geographical label, or the organization dealing with the common
administration of copyrights in the case of an infringement of copyright or neighbouring rights.The Hungarian Patent Office according to the available data shall inform the customs authority ofIP/Q4/HUN/1
Page 19
the person of the right holder within five days, or if he does not wish to act against the
infringement, the customs authority shall put an end to the direct customs supervision, and proceedswith the customs clearance in accordance with the application of the person submitting the goods.
The entitled person must provide a security for the customs authority in order to cover the
costs of warehousing the customs goods which are placed under customs supervision on the basis ofthe customs administration proceeding regulated in this decree, to cover the costs of destroying ifthe customs goods are to be destroyed, and to cover the possible damages payable to the personsubmitting the goods for customs clearance.
20. Please indicate which intellectual property rights are protected based on the
application by a right holder.
It is possible to apply for the suspension in respect of goods which involve infringements of
trademarks, geographical indications, copyright or neighbouring rights.
21. Please explain kinds and contents of documents which shall be provided by the
applicant to lodge the Application.
A written application by the right holder must contain the following:(a) the verification that the protection of the trade mark, or the geographical indication,
or of the copyright or neighbouring rights in question exists in relation to thecustoms goods;
(b) a statement that the person is entitled to act against the infringement;(c) that person's request that the customs authority should take the appropriate
measures to place the illegal goods under direct customs supervision;
(d) the description and relevant characteristics of the customs goods to facilitate
identification, and the circumstances, data, documents which suggest that theinfringement is probable;
(e) the acknowledgement of the obligation to provide the security which is required by
Article 8 of the Decree;
(f) in the case of a general application, the period for which the observation is
required.
The right holder must communicate the following to the customs authority, provided he is
aware of them :
(a) the place where the customs goods can be found or their place of destination;(b) such detailed data that enable the shipment, consignment or the package to be
identified (with special regard to the data concerning the packaging and value of thecustoms goods and the transport vehicle);
(c) the denomination of the importer, exporter or the owner of the customs goods;IP/Q4/HUN/1
Page 20
(d) the expected time and place of arrival or departure of the customs goods;
(e) all information concerning the customs goods or those involved which may be of
assistance to the customs authority.
22. Please explain the remedies which the judicial authorities order regarding a copyright
and other related rights, patents, industrial designs, trademarks and layout-designs(topographies) of integrated circuits, including injunctions, damages, expenses, destruction orother disposal of infringing goods and materials/implements for their production.
Article 27 of the Trademark Act provides for the following remedies (in addition to
damages):
"(2) The right holder may depending on the circumstances of the case, have recourse to
the following civil remedies:
(a) request that the fact of infringement be declared by the court;(b) request an injunction that the infringer cease his infringement;(c) demand that the infringer give information on the identity of third persons
involved in the production and distribution of the infringing goods and inthe supply of infringing services and of their channels of distribution;
(d) demand satisfaction from the infringer by way of a declaration or by other
appropriate means; if necessary, the declaration shall be made public by theinfringer or at his expense;
(e) require surrender of enrichment obtained by the infringement of the
trademark;
(f) request the seizure of the means used exclusively or predominantly for
infringement and of the infringing products and the packaging thereof.
"(3) The court may rule, at the request of the proprietor, that the infringing nature of the
means, materials, products and packaging seized be removed - in particular byremoving the trademark - or, where this is not possible, that they be destroyed.  Inwell-founded cases, the court may order, in place of destruction, that the means andmaterials seized be auctioned according to the rules of court execution procedure; insuch case, the court shall decide how the sum obtained is to be used.
"(4) Seizure of the means and materials used for trademark infringement and of the
infringing products and packaging shall be admissible even though they are not inthe ownership of the infringer if the proprietor knew or had reasonable grounds toknow of the trademark infringement."
As Article 120 of the Trademark Act has amended other intellectual property laws
accordingly, the same remedies are available, mutatis mutandis , under Article 52 of the Copyright
Act, Article 11 of the Industrial Design Decree, Article 10 of the Act on the Protection of the
Topography of Microelectronic Semiconductor Products and Article 35 of the Patent Act.IP/Q4/HUN/1
Page 21
23. Please explain whether the amount of damages which judicial authorities order the
person who infringes intellectual property rights to pay the right holder is adequatecompensation for the injury the right holder has suffered, and what criteria and the way forcalculation to decide the amount for compensation.
Under Article 35(2) of the Patent Act the patentee may, in addition to other remedies, claim
damages in accordance with the rules of civil liability.  Similar provisions can be found in all otherintellectual property laws of Hungary.  Therefore, Article 355 of the Civil Code is the legalauthority determining the factors to be considered in establishing the amount of compensation.
It reads as follows:"(1) The person liable for the damage shall restore the original state, and if it is not
possible, or if the damaged person does not wish so for a well-founded reason, heshall compensate for the pecuniary and non-pecuniary damage of the damagedperson.
"(2) Damage shall be compensated for in cash, unless the circumstances justify
compensation in kind.  Compensation in kind may be especially justified if theobject of compensation for damages is produced by the person causing the damage,too, or it is otherwise at his disposal.
"(3) An annuity can also be stipulated as compensation.  Usually, annuity shall be
ordered if compensation is aimed at the support or supplementing the support of thedamaged person or his relative entitled to be supported by him.
"(4) Under the title of compensation for damages, the decrease in value of the property
of the damaged person and pecuniary advantage lost due to the circumstance havingcaused the damage, as well as the indemnity or costs necessary for lessening oreliminating the pecuniary and non-pecuniary damages sustained by the damagedperson shall be compensated for."
24. Please explain whether the amount of damages which judicial authorities order the
person who infringes intellectual property rights to pay the right holder includes investigationsexpense and appropriate attorney's fees.
Under Article 75 of the Code of Civil Procedure, the costs of proceedings are all costs
incurred either in or out of court in relation to the practical and bona fide conducting of a suit by theparties (costs of preliminary inquiries and correspondence, official fees of proceedings,authorization, etc., fees of witnesses and experts, remuneration of interpreters, costs of on-the-spottrial and inspection, etc.).
Disbursements and remuneration of the counsel of a party must also be added to the costs of
proceedings.
Under Articles 78 and 79 of the Code of Civil Procedure, the defeated party must refund
the costs of litig ation of the prevailing party.  The court determines the amount of costs of litigation
taking into consideration the data provided and duly certified by a party.  Such costs, in accordance
with Article 45.2 of the TRIPS Agreement, include appropriate attorney's fees.IP/Q4/HUN/1
Page 22
An additional provision can be found in Article 95(3) of the Patent Act which provides that
the expenses and fees of the patent attorney representing a party are to be added to the costs ofproceeding.
However, it belongs to the discretionary power of the court, whether the total amount of the
invoice of the counsel of the right holder (the total retainer fee stipulated by the right holder and hiscounsel) will be regarded as a justified expense.  Normally, a maximum of 5% of the total amountdisputed or in extremely complicated cases 5% + 50% thereof, i.e. 7.5% is awarded as a justifiedcounsel's fee.  This calculation is based upon the mandatory rule (Article 1) of the Decree of theMinister of Justice No. 12/1991 (IX. 29.) IM on legal counsels' expenses.  It is to be noted that theactual costs (telecommunication, photocopying, travel, accommodation, typing and similarmiscellaneous costs) paid in connection with the legal counsel's activity are to be reimbursed on topof the fee on the basis of a detailed account of the said costs to be filed by the legal counsel(Article 2).  In practice, Hungarian counsels frequently neglect this obligation, they file no accountof costs, i.e. they do not use the possibility to have the actual costs reimbursed on top of their fee.
25. Please describe to what extent the amount of damages have been estimated by courts
since 1 January 1996.  Please explain whether the amount of damages is adequatecompensation for the injury the right holder has suffered, and how such civil procedures areconsistent with Article 45 of the TRIPS Agreement.
The extent to which the amount of damages have been taken into account is closely
correlated with the economical environment where the infringing activity took place.  Since1 January 1996 damages awarded by the courts are adequate compensation for the injury that theright holder has suffered as set out in the response to question 24.
The Hungarian civil procedures are consistent with Article 45 of the TRIPS Agreement.
26. Please explain the kinds and amounts of penalties (imprisonment or fines) in criminal
cases.  Please also explain whether these penalties are consistent with Article 61 of the TRIPSAgreement which requires provisions for a sufficient deterrent, consistently with the level ofpenalties applied for crimes of a corresponding gravity.
Article 329/A of the Criminal Code (Act No. IV of 1978 on the Criminal Code) qualifies
violation of authors' rights and neighbouring rights as a crime in the following manner:
"(1) That person causing financial prejudice by violating the right of the author on his
literary, scientific or artistic work, or that of the performing artist on hisperformance, or that of the producer on his sound recording, or that of the radio ortelevision broadcaster on his program, shall be deemed to commit a misdemeanour,and shall be imprisoned up to two years, punished to do work for the benefit of thepublic, or fined.
"(2) The penalty for a felony shall be imprisonment up to three years, if the violation of
authors' rights and neighbouring rights:
(a) causes considerable financial prejudice (over Ft 2 000 000);
(b) is committed in a businesslike manner.IP/Q4/HUN/1
Page 23
"(3) The penalty shall be imprisonment up to 5 years, if the violation of authors' rights
and neighbouring rights is committed by causing particularly great financial
prejudice (over Ft 6 000 000).
"(4) That person, who commits the violation of authors' and neighbouring rights
recklessly, shall be punished for a misdemeanour with imprisonment up to one year,or with work to be done for the benefit of the public or with fine."
These provisions of the Criminal Code entered into force on 15 May 1993.Furthermore, under Article 329 of the Criminal Code, an infringement of rights to
intellectual creations is committed when a person makes the false impression that he owns theintellectual creation, invention, innovation or industrial design of another person, and causesthereby pecuniary disadvantage to the entitled party, or, misusing his job at an economicorganization, makes the utilization or assertion of an intellectual creation, invention, innovation orindustrial design of another person dependent on his being given a share in the fee derived, or in theprofit or gains originating therefrom.  This sort of infringement is a felony and is punishable withimprisonment up to three years.
As a result of an amendment to the Criminal Code in 1994, false indication of goods also
amounts to a crime, which can be punished by imprisonment up to three years.
Under the Criminal Code, seizure and forfeiture (confiscation) is possible in all cases.The basic rules are the following:  the property must be confiscated which has been used or
designed as an instrument for the perpetration of a crime, if it is owned by the perpetrator, and alsootherwise, if its possession endangers public security; or which came into being through theperpetration of a crime; or which has been received by the perpetrator of a crime from the owner orfrom another person with the owner's consent, in return for the perpetration.  That printed pressmaterial in which crime is realized must also be confiscated.  In cases defined by the law, thatproperty must be confiscated in respect of which the crime has been perpetrated, or which was theobject of a given pecuniary advantage.
In the case of violation of authors' rights and neighbouring rights, the tangible property
owned by the offender in respect of which the offence has been committed, must be confiscated.Confiscation admissible even when the tangible property is not owned by the offender, but theowner has previously been aware of the commission of the offence (Article 329/A (5) of theCriminal Code).
Under Article 296 of the Criminal Code false indication of goods is a crime: the person
who markets goods of considerable quantity - w ithout the consent of a competitor - with such
characteristic external appearance, packaging or name from which the competitor or his goodshaving characteristic, features can be recognized, commits a felony, and is punishable byimprisonment up to three years.  Furthermore, deception of consumers is committed when theperson who - in the interest of increasing the marketability of goods - states before large publicityuntrue facts in a way suitable for deception in respect of essential features of the goods, or givesinformation suitable for deception about an essential feature of the goods.  It is a misdemeanour andpunishable by imprisonment up to two years, labour in the public interest or a fine.  For the
purposes of applying these provisions the following qualify as essential features of goods: their
composition, usability, their influence on health or environment, their treatment, origin, whetherthey meet legal requirements, standards or habitual requirements for such goods, as well as if theIP/Q4/HUN/1
Page 24
utilization of the goods requires the realization of conditions essentially differing from habitual
ones.
IV. REPLIES TO QUESTIONS POSED BY SWITZERLAND
1. Please explain whether international treaties which contain detailed provisions
addressed to the (judicial) authorities and not to the State itself are considered as self-executing in your system?  If not, when there is a divergence between the intellectual propertylegislation/practices and the international agreement in your country, does the latterautomatically prevail?  If not, please explain the means allowing your country to fulfil theinternational obligations?  Please cite the relevant texts or jurisprudence.
Hungary has a "dualistic system" which means that international treaties must be
promulgated in order to become part of Hungary's internal legal system.  Under Article 7(1) of theHungarian Constitution, the legal system of Hungary ensures the harmony between the internationalobligations undertaken by Hungary and the internal legislation.
There is no provision in the Constitution which would preclude the self-executing effect of
the provisions of international treaties.  The Hungarian intellectual property legislation is in fullcompliance with the relevant international treaties.  It is for this reason that the question whether aprovision of an international treaty may be self-executive and invoked before the courts as a rulehaving precedence over national intellectual property legislation has never arisen in the Hungarianlegal practice.
2. Article 55 of the TRIPS Agreement provides that "... in appropriate cases, this
time-limit [of ten days] may be extended by another ten working days".  Is such time extensionforeseen in your laws?  If yes, please cite the relevant provisions.  If not, please explain howan applicant can avail himself of this possibility as provided by the TRIPS Agreement?
In Hungary, Government Decree No. 128/1997 (VII. 24.) Korm. on the measures in the
field of customs administration procedures against infringements of intellectual property rightsestablishes the special customs procedures applicable in the case of infringement of copyright andneighbouring rights, geographical indications and trademarks.  The Decree entered into force on1 August 1997.  It contains provision on the suspension of release of infringing goods, either uponthe request of the right holder or as an ex officio action of the customs authorities in customsprocedure.
The Decree is in full harmony with the relevant provisions of the TRIPS Agreement.According to Section 5(5) of the Decree, the entitled person must prove within ten working
days of receiving the notification that he has taken an action for infringement of trademark,geographical label or infringement of copyright or neighbouring rights, and has taken legalproceeding for an interim measure to be taken.  This deadline may be prolonged by ten workingdays in a justified case.
If the right holder has not proven his application for an interim measure the customs
authority shall forthwith notify the person submitting the goods to customs clearance and followingthis, the customs goods shall be treated in accordance with the application of this latter person.  Atthe same time it notifies the right holder about pu tting an end to the direct customs supervision.IP/Q4/HUN/1
Page 25
V. REPLIES TO QUESTIONS POSED BY THE UNITED STATES
General obligations
1. Articles 41.1 and 42 of the TRIPS Agreement require that procedures be available for
the effective enforcement of the intellectual property rights covered by the Agreement.  Pleasedescribe the structure of the judicial and administrative
7 procedures in Hungary in which
parties can enforce their intellectual property rights, at local, provincial and national levels,
indicating the jurisdiction of each type of court or administrative body and explaining theinterrelationships, if any, of the various types of courts and administrative bodies.  Cite thelaws or other authorities establishing the structure, including each type of court andadministrative body.
Under Hungarian law, there are three kinds of procedures in which intellectual property
rights can be enforced: civil procedures, customs administration procedures and criminalprocedures.
Civil procedures  can be initiated in the case of the infringement of rights deriving from:
- an invention or a patent (Articles 34 and 35 of Act No. XXXIII of 1995 on the
Protection of Inventions by Patents, hereinafter referred to as the Patent Act);
- a trademark or a geographical indication (Articles 27 and 110 of Act No. XI of
1997 on the Protection of Trademarks and Geographical Indications, hereinafterreferred to as the Trademark Act);
- an industrial design (Articles 10 and 11 of Decree-Law of the Presidium of the
Hungarian People's Republic No. 28 of 1978 on the Protection of IndustrialDesigns, hereinafter referred to as the Industrial Design Decree);
- a topography of microelectronic semiconductor products (Article 10(2) of
Act No. XXXIX of 1991 on the Protection of the Topography of Microelectronic
Semiconductor Products, hereinafter referred to as the Topography Act);
- copyright (Articles 52 and 53 of Act No. III of 1969 on Copyright, hereinafter
referred to as the Copyright Act).
Article 104(1) of the Patent Act, Article 95(1) of the Trademark Act, Article 20(2) of the
Industrial Design Decree and Article 24(1) of the Topography Act provide that the MetropolitanCourt has jurisdiction and exclusive competence in industrial property matters concerninginfringements.  As to  copyright matters, it is not the Copyright Act but Article 23(1) of Act No. IIIof 1952 on Civil Procedure (hereinafter referred to as the Code of Civil Procedure) which stipulatesthat county courts have jurisdiction (Article 10(2) of the Code of Civil Procedure).
The Supreme Court is the court of second instance in industrial property and copyright
matters as well.
However, in respect of copyright litigation, it is to be noted that due to Guidance No. 286
of the Civil Senate of the Supreme Court, as amended by Guidance No. 290 binding all courts,
                                                     
7 These questions apply to both judicial and administrative enforcement of intellectual property rights
because of Article 49 of the TRIPS Agreement.IP/Q4/HUN/1
Page 26
claims of collecting societies, whether it is an exclusive right or a right to an equitable remuneration
that is violated, are to be enforced before local (first instance) courts.  (Claims by holders ofneighbouring rights are not covered by the aforementioned guidance.)
Pecuniary claims of collective administration organizations can be enforced under the Code
of Civil Procedure, in the same way as any other claim for performance in cash not exceedingFt 200 000, i.e. by requesting the court to pass a summa ry judgement.  (A form is to be filled in by
the complainant, and stamped by the court without hearing the case.) If the defendant files anobjection (a quasi appeal) against the summary judgement, the same court has to hold a trial and
hear the case.  (The relevant provisions are Articles 313-323 of the Code of Civil Procedure.)
Customs administration procedures can be applied for in respect of goods involving
infringements of intellectual property rights deriving from trademark, geographical indication or
copyright protection.  Article 3(1) of Government Decree No. 128/1997. (VII. 24.) Korm. onBorder Measures Applicable against Infringements of Intellectual Property Rights in CustomsAdministration Procedures (hereinafter referred to as the Border Measures Decree) provides thatborder measures by customs authorities can be applied for in order to prevent the release into freecirculation of such goods.  Initiating a customs administration procedure entails the institution of acivil action for infringement and also the application for a provisional measure to be ordered by thecourt (Article 5(4) of the Border Measures Decree).
Criminal procedures  can be initiated in the case of infringements constituting crimes under
Act No. IV of 1978 on the Criminal Code (hereinafter referred to as the Criminal Code).  The three
denominated crimes related to intellectual property rights in the Criminal Code are the following:
- false indication of goods (Article 296)- infringement of rights to intellectual creations (Article 329 of the Criminal Code);
and
- violation of authors' rights and neighbouring rights (Article 329/A of the Criminal
Code).
Article 24 of Act No. I of 1973 on the Code of Criminal Procedure (hereinafter referred to
as the Code of Criminal Procedure) provides that the local courts have jurisdiction, therefore thecourts of second instance are the county courts (Article 20(3) of the Code of Criminal Procedure).
Note that there are no separate civil or criminal courts in Hungary, consequently the same
courts may have both civil and criminal jurisdiction at a certain (local, provincial or national) level.
[Follow-up questions from the US]
In responding to US question 1 regarding the jurisdiction of courts and administrative
agencies, the Government of Hungary states that, under Guidance No. 284 of the Civil Senateof the Supreme Court, as amended, county courts have jurisdiction in copyright matters whileclaims of collecting societies are to be enforced before local courts.  A parenthetical sentencestates that "Claims by holders of neighbouring rights are not covered by the aforementionedguidance".  Please confirm our understanding from this sentence that county courts have
jurisdiction over claims of holders of neighbouring rights generally.IP/Q4/HUN/1
Page 27
The Government of Hungary confirms that county courts have jurisdiction over claims of
holders of neighbouring rights generally.
The Government of Hungary indicates which courts have jurisdiction over all forms of
industrial property except trade secrets or, in TRIPS language, "undisclosed information".Which courts have jurisdiction in cases involving unauthorized disclosure, acquisition, and useof undisclosed information?
According to Article 86, subparagraph 1 of the Law No. LVII of 1996 on the Prohibition of
Unfair Market Practices and the Restriction of Competition the county courts have jurisdiction over
procedures laid down by Articles 2 to 7.  As Article 4 of the Law contains the prohibition ofunauthorized disclosure, acquisition and use of undisclosed information, the above-mentioned courtsshall proceed in such cases.
2. Please describe briefly the procedure that must be followed by a foreign party to
initiate an enforcement procedure in each of the courts and administrative bodies identified inresponse to  question 1 and cite the legal authorities establishing those procedures.
Civil procedures can be initiated by the institution of an action for infringement in the
Metropolitan Court indicating the right to be enforced and the facts providing grounds thereof, also
enclosing evidence for the latter (Article 121 of the Code of Civil Procedure).  Appeals to theSupreme Court are to be filed with the Metropolitan Court within fifteen days following thecommunication of the decision, indicating to what extent and for what reasons the review of the firstinstance court's decision is requested (Articles 234 and 235 of the Code of Civil Procedure).
Customs administration procedures  can be initiated by the submission of either a specific or
a general application to the competent customs authority.  The application in writing has to meet
specific criteria and the applicant must deposit a security and also, in the course of the customsproceedings, institute a civil action (Articles 3(1), 4(1), 5(4) and 8(1) of the Border MeasuresDecree).  See also responses to questions 37-54.
Criminal procedures  can be initiated by reporting the crime to the inspecting authorities
(e.g. police, public prosecutor), which can be done by any person (Articles 122(1) and 125(1) of the
Code of Criminal Procedure ).
3. Please identify any requirement that a foreign party must meet to initiate a proceeding
in the courts and administrative bodies identified in answer to question 1 that is not requiredof a national or resident of Hungary and cite the legal authorities providing for thosedifferences.
In accordance with Article 89 of the Code of Civil Procedure, a foreign applicant may,
upon request of the defendant, be required to provide a security for the payment of the defendant'sexpenses.  However, this provision is very seldom applied in intellectual property cases.
4. Articles 41.1 and 48 of the TRIPS Agreement require establishment of safeguards
against abuse of judicial and administrative enforcement procedures, including provision foradequate compensation for injury suffered because of such abuse.  Please describe the meansavailable under the law of Hungary to prevent abuse of judicial and administrative procedures
or to remedy damages suffered as a result of such abuse and cite the legal authorities for those
means.IP/Q4/HUN/1
Page 28
In the sphere of  civil law, general principles such as the doctrine of acting in good faith and
the doctrine prohibiting the abuse of rights can be mentioned as means available to prevent
unlawfully initiated procedures.  The Civil Code establishes those doctrines in Articles 4 and 5 inthe following way:
"4(1) In the course of the exercise of civil rights and the performance of obligations,
parties shall act in accordance with the requirement of good faith (...).
"5(1) The abuse of rights is prohibited by law."5(2) Exercise of a right shall qualify as abuse of rights if it is directed to an aim
irreconcilable with the social purpose of the right, especially if it leads to (...)harassment of persons, injury of their rights or legitimate interests, or theacquisition of unjust advantages."
The doctrine of acting in good faith also appears in Article 5(1) of the Code of Civil
Procedure and Article 120 provides a possibility for the courts to impose a fine up to Ft 50 000 on aparty acting in bad faith.
In addition, various other provisions of the Code of Civil Procedure also raise obstacles to
unlawful action, e.g. Article 121(1) requiring that the institution of an action should involve theindication of the facts providing grounds for the right to be enforced and also the enclosure of thenecessary evidence thereof, especially documents verifying those facts.  If a party does not meetthose requirements when filing an action, the judge will give the submission back to that party forcompletion, fixing a short time-limit, the unsuccessful lapse of which will cause the rejection of thepetition, i.e. the failure of taking the action (Article 95(1) of the Code of Civil Procedure).Article 95(2) requires the simultaneous payment of fees by parties submitting a petition.  As tofurther financial consequences, under Article 78, the defeated party must refund the costs of theprevailing party and under Article 80(2) a party who is unsuccessful in certain acts or fails to meet adeadline or causes unnecessary costs in any other way cannot, under any circumstances, claim therefunding of its costs originating thereof.
In respect of customs administration procedures, Article 3(4) of the Border Measures
Decree lists the persons entitled to apply for such measures to the customs authorities, and under
Article 4(1) an applicant must verify both the existence of the trademark, geographical indication orcopyright protection and its entitlement to file the application.  Articles 4(1) and 4(2) contain otherspecific criteria that must be met by the applicant, and a security must also be deposited at thecustoms authorities (Article 8(1) of the Border Measures Decree).  If those requirements are notmet, the application will be rejected and, therefore, no measures will be taken by the customsauthorities (Article 5(2) of the Border Measures Decree).  In the case of a successful application,the applicant must institute a civil action for infringement and apply to the competent court for aprovisional measure and the applicant must also present sufficient evidence to support its claim(Article 5(4) of the Border Measures Decree).
In criminal procedures, general principles such as the doctrine of the right of defense and
the presumption of innocence (Articles 3 and 6 of the Code of Criminal Procedure) are applicable
against abuse which can also be prevented, even before the case enters the court phase, by theinspecting authorities that are entitled to deny or to discontinue the investigation.  The prosecutor
may also omit to refer the case to the court or, during the court phase the prosecutor may drop the
charge (Articles 127(1), 139(1), 145(2) and 170(1) of the Code of Criminal Procedure).  Inaddition, false charge is a crime under Articles 233-236 of the Criminal Code.IP/Q4/HUN/1
Page 29
As to damages suffered because of an abuse, a general provision (Article 339(1) of the Civil
Code) can be applied which provides that any person who unlawfully causes a damage is be obligedto give the injured party compensation for it.  (See also our response to question 36.)
5. Article 41.2 addresses, among other things, the cost of judicial and administrative
enforcement proceedings.  Please describe any fees charged by judicial or administrativeofficials for filing legal actions involving intellectual property or for pursuing such actions onceinitiated, cite the legal authorities for such fees, and provide copies of the documents used toinform the public of such fees.
Costs of civil procedures:  6% of the case value but not less than Ft 5 000 and not more
than Ft 750 000 in both the first and the second instances (Articles 42(1) and 46(1) of Act No.XCIII of 1990 on Official Fees).
Costs of customs administration procedures:  the amount of the security to be deposited is
5% of the value of the goods when that value can be established and Ft 60 000 per application permonth when the value of the goods cannot be established (Article 8(2) of the Border MeasuresDecree).
The initiation of a criminal procedure involves no costs for the person reporting the crime
to the authorities.
There are no documents used generally or officially to inform the public of such fees.
6. Article 41.2 also addresses the timeliness of judicial and administrative enforcement
proceedings.  Please cite to the legal authorities establishing any time-limits for judicial andadministrative proceedings and, if it has not already been done, provide copies of the laws orregulations in question.
There are two kinds of time-limits established by Hungarian law for judicial and
administrative proceedings.  On the one hand, time-limits are established for courts oradministrative bodies.  On the other hand, time-limits are also set for the parties.  As to the former,it is only customs administration procedures in which time-limits for the customs authorities apply.Provisions of the latter kind can be found not only in the Border Measures Decree but also in theCode of Civil Procedure and the Code of Criminal Procedure.  In the Code of Criminal Proceduresome time-limits are established for the inspecting authorities and for the prosecutor as well.However, neither the Code of Civil Procedure nor the Code of Criminal Procedure contains anytime-limit to be respected by courts in the course of their proceedings.
Time-limits in customs administration procedures :
- Article 5(1) of the Border Measures Decree establishes a time-limit of five working
days following the filing date of the application for the customs authorities to rendera decision on the merits of the case;
- The applicant must verify within ten working days following the receipt of the
decision by the customs authorities ordering the direct supervision of the infringing
goods that a civil action for infringement has been instituted by  the applicant, in
which an application for a provisional measure by the court has been submitted.IP/Q4/HUN/1
Page 30
That time-limit can be extended by another ten working days when justified
(Article 5(4) of the Border Measures Decree).
Time-limits in criminal procedures :
- The inspecting authorities must, based on the denouncement of the crime, decide on
the commencement or refusal of the investigation within three days following thefiling date of the denouncement.  This time-limit can be extended, if circumstancesso require, by fifteen plus fifteen plus thirty days by the heads of inspectingauthorities (Article 126(1) of the Code of Criminal Procedure);
- A criminal investigation has to be terminated within two months following the
ordering thereof. This time-limit may, in appropriate cases, be extended by twoplus two months, and, after that, by the Director of Public Prosecutors (Article 131of the Code of Criminal Procedure);
- The inspecting authorities must forward the documentation to the prosecutor within
eight days following the date of notice on the termination of the investigation(Article 145(1) of the Code of Criminal Procedure);
- The prosecutor must examine the documentation and accordingly decide on the
continuation of the case within fifteen days.  Under extraordinary circumstances,this time-limit can be extended by another fifteen days (Articles 145(2) and 145(4)of the Code of Criminal Procedure);
- In the court phase, the judge, within eight days following the submission of the
documentation, decides on the continuation of the case, and, if no additionaldecisions are necessary, fixes a date for the hearing (Article 167(1) of the Code ofCriminal Procedure).
Time-limits in civil procedures :
- The usual time-limit established by the judge for the parties to carry out certain
actions in a lawsuit is fifteen days.
7. Please explain any provisions in the enforcement system in Hungary that ensure
expeditious remedies.  In addition, please explain what provisions are available to preventdeliberate delays by the parties to a proceeding and indicate the circumstances in which suchprovisions will be applied.
There are a number of provisions in the enforcement system in Hungary that ensure
expeditious remedies.  Criminal procedures and customs administration procedures, by their verynature, have the purpose of taking effective action against any act of infringement of intellectualproperty rights.  However, it is mainly in respect of remedies available in civil procedures whereHungarian legislation has quite recently made significant progress.  In particular, the specialprovisions on provisional measures and the preliminary production and preservation of evidence areworth mentioning.  These provisions, which were introduced this year, by the new Trademark Act(see the reply to question 1), are of an interpretative nature in relation to the Code of Civil
Procedure.  They have introduced a statutory presumption in favour of intellectual property rights
holders that there is a need to protect a right "deserving special appreciation" (as is required by thegeneral rules of the Code of Civil Procedure), if the applicant certifies that the work, invention,IP/Q4/HUN/1
Page 31
trademark or other subject matter is legally protected, and that he is entitled to that protection, i.e.
he is the owner, or the duly authorized licensee, of the intellectual property right in question.Furthermore, courts have been put under the obligation to decide on requests for provisionalmeasures within fifteen days, at the latest, counted  from the day of submission of such a request.
For further details of expeditious remedies available under Hungarian law, see our replies to thequestions related to specific procedures and remedies.
As to deliberate delays, the short time-limits established by the Border Measures Decree
have the effect that parties are forced to avoid delays.  In addition, under Article 5(1) of the Codeof Civil Procedure the court has to prevent all actions which are aimed at, or may lead to, theunjustified prolongation of a lawsuit.  Articles 5(2) and 5(4) provide that the court should impose afine on a party or a representative who, by making false allegations or a declaration or undulydelaying in making statements, hinders the conclusion of the lawsuit.  According to Article 120, thefine may amount to Ft 50 000.
In addition, several other provisions in the Code of Civil Procedure (e.g. Article 105(1)
providing that parties are generally not allowed to validly perform an act once omitted, orArticle 107 establishing a time-limit of fifteen days  following the deadline omitted for justifying an
omission etc.) also raise obstacles to deliberate delays.
8. Article 41.3 of the TRIPS Agreement requires that decisions on the merits of a case
preferably be in writing, the better to determine the reasoning on which the decision is based.Please state, with regard to each type of court and administrative body identified inquestion 1, whether judges or administrative officials must render their decisions in writingand cite the legal authorities requiring such written opinions.
With regard to each court or administrative body mentioned in the response to question 1,
decisions have to be in writing (under Article 219(2) of the Code of Civil Procedure, Article 43(3)of the Code of Administrative Procedure and Article 165(1) of the Code of Criminal Procedure).  Itis also a general requirement that decisions on the merits of a case be reasoned.
9. Article 41.3 also requires that decisions on the merits of a case be based only on
evidence in respect of which parties had an opportunity to be heard.  Please state, with regardto each type of court and administrative body identified in question 1, what factors may beconsidered by a judge or administrative official in rendering a decision and cite the legalauthorities establishing the basis on which judges and administrative officials may reachdecisions.
In civil procedures, the court has to take or require evidence to establish facts necessary for
rendering a decision.  Means of evidence are, in particular, testimonies, expert opinions,
inspections, documents and other material proofs.  No oath is taken in such proceedings.  Noevidence is necessary with regard to facts of common knowledge or of official knowledge of thecourt.  Balancing of evidence should be based on the comparison of statements of the parties andproofs coming up in the course of evidence.  Results of evidence are to be considered on the wholeand judged according to the conviction of the court (Articles 163(1), 163(3), 166 and 206(1) of theCode of Civil Procedure).  In connection with the summary procedure applicable to claims ofcollective administration organizations, as mentioned in the response to question 1, it is to beemphasized that the summary judgement is the outcome of an ex parte  procedure, but in the event
of an objection by the defendant against the summary judgement, the case will have to be heard by
the court.IP/Q4/HUN/1
Page 32
In administrative procedures , the administrative body is required to establish and clarify the
facts necessary for rendering a decision.  Means of evidence are, in particular, statements of the
client, documents, testimonies, inspections and expert opinions.  No evidence is necessary withregard to facts of common knowledge or of official knowledge of the administrative body.Balancing of evidence is based on the consideration of the whole evidence.  Facts have to beestablished according to the conviction of the administrative body (Article 26 of the Code ofAdministrative Procedure).
In criminal procedures , means of evidence are, in particular, testimonies, expert opinions,
material proofs, documents, inspections, local inqui ries, experiments, presentations for recognition
and statements of the defendant (Article 61(1) of the Code of Criminal Procedure).  There areseveral provisions in the Code of Criminal Procedure deriving from the different characteristics ofcriminal procedures as compared to civil proceedings, e.g. Article 61(4) providing that facts whichare not proved beyond any doubt must not be judged in a way unfavourable to the defendant; orArticle 199 providing that evidence should begin with the interrogation of the defendant.  Apartfrom those differences, provisions on criminal procedures are similar to those on civil procedures.
10. Article 41.4 obligates WTO Members to provide for judicial review of certain judicial
and administrative decisions in intellectual property enforcement proceedings.  Please describewhat legal limitations, if any, are placed upon the ability of a party to an intellectual propertyenforcement proceeding to have both procedural rulings and final decisions reviewed by aseparate judicial authority, and cite the legal authorities providing for such reviews.
Review of decisions in  civil procedures :
- appeal (Articles 233-259 of the Code of Civil Procedure) - a remedy available
against decisions of the court of first instance, to be submitted within fifteen daysfollowing the communication of the decision;
- re-opening of the case (Articles 260-269 of the Code of Civil Procedure) - a remedy
available against a final judgement of the court of first instance in cases specified byArticle 260(1) of the Code of Civil Procedure.  The request for the re-opening of acase is to be submitted within six months (but under no circumstances more thanfive years) following the date when the contested judgement became effective;
- review by the Supreme Court (Articles 270-275/B of the Code of Civil Procedure) -
a remedy available against final judgements in the case of an unlawful judgement.The request for such review can only be submitted once by the same person withregard to a particular case and within sixty days following the date ofcommunication of the contested judgement.
Review of decisions in customs  administration procedures :
- modification or revocation of the decision (Article 61 of Act No. IV. of 1957 on
Administrative Procedure, hereinafter referred to as the Code of AdministrativeProcedure) - a remedy applied by an administrative body when its decision, havingnot been examined by a superior body or by court, is unlawful.  An administrativebody has the authority to apply this kind of remedy only once in a case and within
one year following the communication of the decision;IP/Q4/HUN/1
Page 33
- appeal (Articles 62-67 of the Code of Administrative Procedure) - a remedy against
a first instance decision on the merits of a case, to be submitted within fifteen daysfollowing the communication of the decision.  The superior administrative bodydecides on the appeal, affirming, modifying or revoking the initial decision;
- supervisory measure (Article 71 of the Code of Administrative Procedure) - a
remedy applicable ex officio by the superior body within one year following thedate when the decision became effective.  It can be applied if a decision of anadministrative body is unlawful;
- judicial review of an administrative decision (Articles 72-73 of the Code of
Administrative Procedure) - a remedy available against an unlawful decision of anadministrative body on the merits of the case.  The review can be requested byinstituting a civil action within thirty days following the communication of thedecision, provided that the right to appeal to a superior administrative body hasbeen exercised, or such appeal is excluded.
Remedies in criminal procedures :
- appeal (Articles 235-275 of the Code of Criminal Procedure) - a remedy available
against the whole or a certain part of a decision of the court of first instance, to besubmitted promptly or within three days in the case of an announced decision andwithin eight days in the case of a served decision;
- re-opening of the case (Articles 276-283 of the Code of Criminal Procedure) - a
remedy applicable to the defendant's disadvantage only by the prosecutor and to thedefendant's advantage by the prosecutor, the convicted person, the counsel for thedefense, and, in certain cases, the relatives of the convicted person, against a finaljudgement under circumstances similar to those in the civil procedure;
- review by the Supreme Court (Articles 284-291/A of the Code of Criminal
Procedure) - a remedy applicable to the defendant's disadvantage only by theprosecutor and to the defendant's advantage by the prosecutor, the convictedperson, the counsel for the defense, and, in certain cases, the relatives of theconvicted person, against the whole or a certain part of a final judgement of thecourt of second instance in certain cases of violation of substantive law.
In copyright litigation, judgements of county (in this case: first instance) courts are
reviewed by the Supreme Court.  In litigation to be commenced after 1 January 1999, the reviewwill fall within the jurisdiction of the newly established circuit courts under Article 10(2) of theCode of Civil Procedure (circuit courts will be regional courts, serving as second instance courts inrespect of cases heard by the county courts in first instance).
In cases of copyright judgements, the "review" of the summary judgement, i.e. the actual
hearing, falls within the jurisdiction of the same court that has passed the summary judgement.IP/Q4/HUN/1
Page 34
Civil and administrative procedures and remedies
11. Article 42 requires that defendants be notified of judicial and administrative
intellectual property enforcement proceedings brought against them.  Please describe theprocedures followed by each type of court and administrative body identified in question 1 fornotifying defending parties regarding proceedings that have been initiated against them,indicate the information provided regarding the proceeding and cite the legal authoritiesestablishing these procedures.
Under Article 125(1) and 126(1) of the  Code of Civil Procedure the judge has to cite the
parties for the hearing enclosing the copy of the claim at least eight days before the day of thehearing.  The parties must be warned that they may have themselves represented at the trial - if theydo not appear personally - by an attorney-at-law.  The parties have to be told to bring documentsconcerning the case to the trial, and the defendant has to be warned also of its obligation to make adeclaration on the relief sought at the trial, at the latest, and to present facts providing the basis forits response to the action and the proofs of these and to produce its documents concerning the case.The summons of the defendant has to include that its declaration can be filed or recorded on the daybefore the appointed day for the hearing.  A dup licate of the written declaration or the record made
on it must immediately be served on the plaintiff by the court and if there is not enough time left forthis, it must be handed over at the trial.
In cases of summary judgements in copyright cases, the procedure is an ex parte one.  The
defendant is notified by one original copy of the judgement, which serves as the basis of itsobjection.  If the defendant fails to file the objection within 15 days the summary judgement must beregarded as final and it will be subject to execution.
12. Article 42 also requires that parties to intellectual property enforcement proceedings
must be able to be represented by counsel and must not be subject to overly burdensomerequirements to appear personally.  Please describe any limitations under Hungary's laws onthe ability of a party in such a proceeding to be represented by independent legal counsel andany requirements imposed on the party to appear personally in a proceeding.  Please cite thelegal authorities providing such limitations and imposing such requirements.
Under Hungarian legislation in intellectual property enforcement proceedings there are no
such limitations.
13. Under Article 42, parties are to be entitled to substantiate claims and present relevant
evidence.  Please describe any limitations under the law of Hungary on a party's ability tosubstantiate a claim or to present relevant evidence and cite the legal authority providing suchlimitations.
Under the law of Hungary, in intellectual property enforcement proceedings there are no
such limitations.
14. Article 42 requires, with one narrow exception, that there be a means to identify and
protect confidential information during judicial and administrative intellectual propertyenforcement proceedings.  Please describe the means provided under the law of Hungary forparties to identify and have protected confidential information required to be presented in
order to prove their claims and cite the legal authorities providing for such identification and
protection.IP/Q4/HUN/1
Page 35
Article 7 of the Code of Civil Procedure regulates the specific circumstances under which
the public may be barred from the trial of the case in order to protect state secrets, trade (business)secrets or secrets pertaining to an official service.
Article 89 of the Patent Act contains an additional provision authorizing the court, upon
request of a party, to exclude the public from the hearing or from the pronouncing of the decision,even when the requirements of the Code of Civil Procedure mentioned above are not fulfilled.Article 80 of the  Trademark Act includes a similar provision.
The Act on the Prohibition of Unfair Market Practices and the Restriction of Competition
provides for the protection of undisclosed information.  It prohibits the use of trade (business)secrets in an unfair manner as well as their unauthorized disclosure to third persons or the generalpublic.
15. Article 43.1 of the TRIPS Agreement requires that judicial and administrative officials
be able to order a party to an intellectual property enforcement proceeding to producerelevant evidence in that party's control identified by the opposing party when the latter partyhas presented reasonably available evidence in support of its claims.  Please describe how andin what circumstances judges and administrative officials may order production of relevantevidence in intellectual property enforcement proceedings and cite the legal authoritiesproviding for such orders.
Under Article 95(5) of the Trademark Act, where in the course of proceedings for
trademark infringement, one of the parties has already made the facts likely to a due extent, thecourt may, upon request of the party producing evidence, require the adverse party to present anyrelevant document and other exhibits in its possession and to make inspection possible.
All other intellectual property laws listed in the response to question 1 include a similar
provision, as a result of their amendment by the Trademark Act.
16. Information ordered to be produced, referred to in question 15, must be protected if it
is confidential.  Please describe the means provided under the law of Hungary for protectingsuch information and cite the legal authority providing for such protection, if those meansdiffer from those described in answer to question 14.
Confidential information is protected as described in the reply to question 14.
17. Article 43.2 provides that, in the event a party refuses to provide information ordered
by the judicial or administrative officials, those officials may be authorized to makepreliminary and final determinations adverse to that party.  Please describe what sanctionsmay be imposed on a party that refused to provide ordered information and under whatcircumstances those sanctions are imposed, citing the legal authority for those sanctions.
There are no special provisions under Hungarian law on sanctions to be imposed on a party
that refused to provide ordered information.
However, under Article 206(1) of the Code of Civil Procedure, the balancing of evidence
should be based on the comparison of statements of the parties and proofs coming up in the course
of evidence.  Results of evidence are to be considered on the whole and judged according to the
conviction of the court.IP/Q4/HUN/1
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18. Article 44.1 requires that judicial and administrative officials be able to enjoin or
otherwise prevent infringing activity by a party, including by preventing the entry ofinfringing goods into the channels of commerce in their jurisdiction.  Please describe authorityof the judges and administrative officials identified in question 1 to order parties to stopinfringements and to prevent infringing goods from entering the channels of commerce in theirjurisdiction immediately after clearance of such goods through customs.  In addition, pleasecite the legal authorities authorizing such actions.
Under Article 35(2)(b) of the Patent Act, the patentee may request from the court an
injunction that the infringer cease his infringement.  Article 27(2) b) of the Trademark Act providesthat the right holder may request from the court an injunction that the infringer cease hisinfringement.  Similar provisions can be found in other industrial property laws.  Article 52(1) b) ofthe Copyright Act includes a provision authorizing the right holder to request from the court aninjunction that the infringement be stopped and the infringer desist from continuing theinfringement.
The courts have the authority to order such injunctions also as preliminary measures.  For a
detailed description of preliminary measures under the law of Hungary see responses toquestions 25-36.
19. Article 44.2 provides an exception to the requirement in paragraph 1 for government
use or use by third parties authorized by the government, limiting the remedy forinfringement to payment of adequate remuneration as provided in Article 31(h).  Pleasedescribe any such limitations on remedies in the laws of Hungary and cite the legal authoritiesproviding for those limitations.
Articles 31-33 of the Patent Act contain provisions on compulsory licenses.  They are fully
in line with the requirements that are to be met under Article 31 of the TRIPS Agreement.However, if the government or any third party acting with government approval commits aninfringement of an intellectual property right, the general remedies can be sought for suchinfringement.  Therefore, under Hungarian law, there are no limitations on remedies that areavailable for infringement through government use or use by third parties authorized by thegovernment.
20. Article 45.1 requires that judicial and administrative officials be able to order an
infringer to pay the right holder damages adequate to compensate for the injury caused by theinfringement.  Please describe the authority of the judges and administrative officialsidentified in question 1 to order a party found to be infringing to pay the right holder damagesadequate to compensate for the injury caused by the infringement.  Please explain the factorsconsidered in establishing the amount of the compensation and cite the legal authoritiesauthorizing such compensation orders.
Under Article 35(2) of the Patent Act the patentee may, in addition to other remedies, claim
damages in accordance with the rules of civil liability.  Similar provisions can be found in all otherintellectual property laws of Hungary.  Therefore, Article 355 of the Civil Code is the legalauthority determining the factors to be considered in establishing the amount of compensation.
It reads as follows:
"(1) The person liable for the damage shall restore the original state, and if it is not
possible, or if the damaged person does not wish so for a well-founded reason, heIP/Q4/HUN/1
Page 37
shall compensate for the pecuniary and non-pecuniary damage of the damaged
person.
"(2) Damage shall be compensated for in cash, unless the circumstances justify
compensation in kind.  Compensation in kind may be especially justified if theobject of compensation for damages is produced by the person causing the damage,too, or it is otherwise at his disposal.
"(3) An annuity can also be stipulated as compensation.  Usually, an annuity shall be
ordered if compensation is aimed at the support or supplementing the support of thedamaged person or his relative entitled to be supported by him.
"(4) Under the title of compensation for damages, the decrease in value of the property
of the damaged person and pecuniary advantage lost due to the circumstance havingcaused the damage, as well as the indemnity or costs necessary for lessening oreliminating the pecuniary and non-pecuniary damages sustained by the damagedperson shall be compensated for."
21. Article 45.2 requires that judges and administrative officials be authorized to order
payment of a right holder's expenses, including legal fees.  Please describe the authority of thejudges and administrative officials identified in question 1 to order payment of right holders'expenses, the circumstances under which such an order will be given, the factors considered inestablishing the expenses, and cite the legal authorities authorizing such payments.
Under Article 75 of the Code of Civil Procedure, the costs of proceedings are all costs
incurred either in or out of court in relation to the practical and bona fide conducting of a suit by theparties (costs of preliminary inquiries and correspondence, official fees of proceedings,authorization, etc., fees of witnesses and experts, remuneration of interpreters, costs of on-the-spottrial and inspection, etc.).
Disbursements and remuneration of the counsel of a party must also be added to the costs of
proceedings.
Under Articles 78 and 79 of the Code of Civil Procedure, the defeated party must refund
the costs of litig ation of the prevailing party.  The court determines the amount of costs of litigation
taking into consideration the data provided and duly certified by a party.  Such costs, in accordancewith Article 45.2 of the TRIPS Agreement, include appropriate attorney's fees.
An additional provision can be found in Article 95(3) of the Patent Act which provides that
the expenses and fees of the patent attorney representing a party are to be added to the costs ofproceeding.
However, it belongs to the discretionary power of the court, whether the total amount of the
invoice of the counsel of the right holder (the total retainer fee stipulated by the right holder and hiscounsel) will be regarded as a justified expense.  Normally, a maximum of 5% of the total amountdisputed or in extremely complicated cases 5% + 50% thereof, i.e. 7.5% is awarded as a justifiedcounsel's fee.  This calculation is based upon the mandatory rule (Article 1) of the Decree of theMinister of Justice No. 12/1991 (IX. 29.) IM on the legal counsels' expenses.  It is to be noted that
the actual costs (telecommunication, photocopying, travel, accommodation, typing and similar
miscellaneous costs) paid in connection with the legal counsel's activity are to be reimbursed on topof the fee on the basis of a detailed account of the said costs to be filed by the legal counselIP/Q4/HUN/1
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(Article 2).  In practice, Hungarian counsels frequently neglect this obligation, they file no account
of costs, i.e. they do not use the possibility to have the actual costs reimbursed on top of their fee.
22. Article 46 requires that judges and administrative officials be authorized to order, in
certain circumstances, other remedies, including disposal of goods outside commercialchannels or destruction of goods and destruction of materials and implements the predominantuse of which is the creation of infringing goods.  Please describe the additional remediesavailable under the laws of Hungary, the circumstances in which such authority will beexercised, the factors considered in determining the nature of the remedies provided, and citethe legal authorities providing for such remedies.
Article 27 of the Trademark Act provides for the following remedies (in addition to
damages):
"(2) The right holder may depending on the circumstances of the case, have recourse to
the following civil remedies:
(a) request that the fact of infringement be declared by the court;(b) request an injunction that the infringer cease his infringement;(c) demand that the infringer give information on the identity of third persons
involved in the production and distribution of the infringing goods and inthe supply of infringing services and of their channels of distribution;
(d) demand satisfaction from the infringer by way of a declaration or by other
appropriate means; if necessary, the declaration shall be made public by theinfringer or at his expense;
(e) require surrender of enrichment obtained by the infringement of the
trademark;
(f) request the seizure of the means used exclusively or predominantly for
infringement and of the infringing products and the packaging thereof.
"(3) The court may rule, at the request of the proprietor, that the infringing nature of the
means, materials, products and packaging seized be removed - in particular byremoving the trademark - or, where this is not possible, that they be destroyed.  Inwell-founded cases, the court may order, in place of destruction, that the means andmaterials seized be auctioned according to the rules of court execution procedure; insuch case, the court shall decide how the sum obtained is to be used.
"(4) Seizure of the means and materials used for trademark infringement and of the
infringing products and packaging shall be admissible even though they are not inthe ownership of the infringer if the proprietor knew or had reasonable grounds toknow of the trademark infringement."
As Article 120 of the Trademark Act has amended other intellectual property laws
accordingly, the same remedies are available, mutatis mutandis , under Article 52 of the Copyright
Act, Article 11 of the Industrial Design Decree, and Article 35 of the Patent Act.IP/Q4/HUN/1
Page 39
23. Article 47 provides that WTO Members may authorize judges and administrative
officials to order infringers to identify for right holders third parties involved in theproduction and distribution of infringing goods or services and their channels of distribution.Please describe any authority judges and administrative officials have under the laws ofHungary to order infringers to identify for right holders third parties involved in theproduction and distribution of infringing goods or services and their channels of distributionand describe the circumstances in which this authority would be exercised.  Please cite thelegal authorities providing for such remedies.
Under Article 27(2) of the Trademark Act the proprietor may, depending on the
circumstances of the case, demand that the infringer give information on the identity of thirdpersons involved in the production and distribution of the infringing goods and in the supply ofinfringing services and of their channels of distribution.
As Article 120 of the Trademark Act has amended other intellectual property laws
accordingly, the same provision is contained by Article 52(1) of the Copyright Act, Article 11 ofthe Industrial Design Decree, and Article 35 of the Patent Act.
See also Hungary's replies of to questions 5 and 6 of the Checklist of Issues on
Enforcement.
8
24. Article 48.2 permits WTO Members to exempt public authorities and officials from
liability from remedies only where their actions were taken or intended in good faith in carrying
out their responsibilities under the law.  Please explain any exemption provided public
authorities and officials from liability for abuse of enforcement procedures, describe the
circumstances in which such limitations would no t apply, and cite the legal authorities granting
such exemptions.
Under Article 349 of the Civil Code, liability for damage caused in the sphere of state
administration can only be established if the dama ge could not be prevented by ordinary legal
remedies, or the damaged person has resorted to ordinary legal remedies appropriate for preventing
damages.
These rules also apply to liability for damages caused within the sphere of authority of
courts and prosecutor's offices.
See also Hungary's reply to question 7 of the Checklist of Issues on Enforcement.8
Provisional measures
25. Articles 50.1 and 50.8 require that judicial and administrative authorities have the
authority to order prompt and effective provisional remedies to prevent an infringement ofany intellectual property right.  With respect to each intellectual property right identified inArticle 1.2 of the TRIPS Agreement, please identify the provisional measures available toprotect intellectual property rights.  Please cite the relevant legal authority establishing thoseprovisional remedies.
Under 156 of the Code of Civil Procedure, the court may order by a provisional measure,
on request, compliance with the action claim (counterclaim) or with any special claim contained in
the request for a provisional measure.  A provisional measure can be obtained if it is necessary to
                                                     
8 Document IP/N/6/HUN/1.IP/Q4/HUN/1
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prevent imminent damage, or to preserve circumstances giving rise to litigation or to protect the
petitioner's rights deserving special appreciation.  Furthermore, the court should be satisfied thatthe drawbacks caused by the measure do not outweigh the benefits attainable by it.  The court maysubject the ordering of a provisional measure to a security to be provided by the applicant.  Thefacts on which the request is based must be made likely.  The request for a provisional measure canonly be submitted after the statement of claim has been filed.  The court, however, may decide onthe provisional measure even before the first trial.  The court is required to decide on a provisionalmeasure promptly, but prior to that, it has to hear the parties personally or allow them to presenttheir cases in writing.  The hearing of the parties may only be omitted if the provisional measure isurgently needed, or if the party concerned does not comply with the time-limit or period fixed forthe hearing.  Although an appeal may be lodged against the court's decision ordering a provisionalmeasure, it does not necessarily have a suspensive (delaying) effect on the execution of themeasure, i.e. it can be executed in advance.
These provisions of the Code of Civil Procedure (as amended by Act LX of 1995) meet the
requirements of Article 50 of the TRIPS Agreement.
Special provisions on provisional measures applicable in the case of infringement have been
included in Hungarian industrial property and copyright laws by the Trademark Act and arecontained in the Trademark Act itself.
Those provisions are of an interpretative nature in relation to the Code of Civil Procedure,
and are designed to reflect the specialties of intellectual property cases so that they should enhancethe efficiency of enforcement.  They have introduced a statutory presumption in favour ofintellectual property rights holders that there is a need to protect a right "deserving specialappreciation" (as is required by the general rules of the Code of Civil Procedure), if the applicantcertifies that the work, invention, trademark or other subject matter is legally protected, and that heis entitled to that protection, i.e. he is the owner, or the duly authorized licensee, of the intellectualproperty right in question.  However, this presumption does not apply where six months havealready elapsed form the beginning of the infringement, or sixty days from the date on which theapplicant became aware of the infringement and the identity of the infringer.  (Nevertheless, in sucha case a provisional measure can still be obtained, but only under the general rules of the Code ofCivil Procedure, i.e. without the "help" of the statutory presumption.) Furthermore, courts havebeen put under the obligation to decide on requests for provisional measures within fifteen days, atthe latest, counted from the day of submission of such a request.
The relevant provisions are the following: Articles 95 (2)-(4) of the Trademark Act,
Articles 52 (3)-(5) of the Copyright Act, Articles 20 (3)-(5) of the Industrial Design Decree,Articles 104 (3)-(5) of the Patent Act.
See also Hungary's reply to question 10 of the Checklist of Issues on Enforcement.
9
[Follow-up question from the US]
In its answer to question 25, the Government  of Hungary states that the presumption
of legal protection for intellectual property rights and entitlement to enforcement does notapply where six months have elapsed from the beginning of an infringement or 60 days fromthe date the right holder became aware of the infringement.  Please describe any possibilitiesfor extension of those deadlines that are available for foreign right holders who have less
                                                     
9 Document IP/N/6/HUN/1.IP/Q4/HUN/1
Page 41
opportunity to learn of infringements occurring in Hungary and who, when they do learn of
such infringements, must seek out Hungarian counsel, have relevant documents translated andgenerally deal with counsel and courts long distance.
The extension of the six month deadline is not possible even in cases when foreign right
holders fail to meet the deadline.  In this case the presumption of law is rebutted.  This, however,does not affect the rights of the foreign right holder, because provisional measures could be grantedby the court under the general rules of the Code of Civil Procedure (Article 156).  In suchprocedure the court is entitled to examine whether the ordering of the provisional measure is,inter alia , necessary to protect the petitioner's rights deserving special appreciation.
26. Articles 50.1 and 50.8 require that judicial and administrative authorities have the
authority to order prompt and effective provisional remedies to preserve relevant evidence inregard to an alleged infringement.  Please identify the provisional measures available topreserve relevant evidence in regard to an alleged infringement and cite the relevant legalauthority.
Articles 207-211 of the Code of Civil Procedure provide that, upon request of the party
concerned, preliminary production of evidence is admissible either before or during the action, if,among others, it seems likely that evidence could not successfully be taken during the action or in alater stage of the action, or it would entail considerable difficulties.  In urgent cases, the court maydecide on the preliminary production of evidence even without hearing the adverse party.  In casesof infringements of intellectual property rights, courts may subject the ordering of preliminaryproduction of evidence to providing security (Article 95(6) of the Trademark Act, Article 52(7) ofthe Copyright Act, Article 20(7) of the Industrial Design Decree, Article 104(7) of the Patent Act).
27. Articles 50.2 and 50.8 require Members to authorize judicial and administrative
authorities to adopt provisional measures inaudita altera  parte.  With respect to each
intellectual property right identified in Article 1.2 of the TRIPS Agreement, please describebriefly the circumstances in which the judicial and administrative authorities are empoweredto adopt provisional measures inaudita altera  parte and cite the relevant legal authority.
Under Article 156(4) of the Code of Civil Procedure a provisional measure may only be
ordered inaudita altera parte  if the measure is urgently needed, or if the party does not comply with
the time-limit or period fixed for the hearing.
See also Hungary's reply to question 11 of the Checklist of Issues on Enforcement.
10
28. Articles 50.2 and 50.8 require that judicial authorities and administrative bodies be
authorized to grant provisional remedies when a delay is likely to cause "irreparable harm" to
the right holder.  Please describe briefly what  is required by the authorities identified in
answers to questions 25, 26 and 27 to establish "irreparable harm" to the right holder.
Under 156(1) of the Code of Civil Procedure, the court may order a provisional measure, on
request, if it is necessary to prevent imminent damage, or to preserve circumstances giving rise to
litigation or to protect the petitioner's rights deserving special appreciation and if the drawbacks
caused by the measure do not outweigh the benefits attainable by it.
See also Hungary's reply to question 10 of the Checklist of Issues on Enforcement.10
                                                     
10 Document IP/N/6/HUN/1.IP/Q4/HUN/1
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29. Articles 50.2 and 50.8 also require that judicial authorities and administrative bodies
be authorized to grant provisional remedies when there is a "demonstrable risk of evidencebeing destroyed".  Please describe briefly what factors are considered by the competentauthorities in determining when there is a "demonstrable risk of evidence being destroyed".
See the replies to questions 25 and 26.
30. Articles 50.3 and 50.8 require that judicial and administrative authorities be
authorized to require an applicant to provide evidence to establish with a sufficient degree ofcertainty that the applicant is the right holder and that infringement has occurred or isimminent.  With respect to each intellectual property right defined in Article 1.2 of the TRIPSAgreement, please describe the evidence required by right holders to establish ownership.
In respect of registered industrial property rights (patents, utility models, industrial designs,
topographies of microelectronic semiconductor products, trademarks and geographical indications)the Hungarian Patent Office - on request - certifies the rights of the owner by issuing a copy of theregistered data on payment of a fee.  (See e.g. Article 54(4) of the Patent Act, Article 47(4) of theTrademark Act.)
The copy of the registered data is a public (authentic) document mostly required by courts
to establish ownership in such procedures.
Taking into account the fact that registration of assignments or licenses of exploitation are
not mandatory under Hungarian law, the courts may also accept private documents (contracts)constituting conclusive evidence submitted by the plaintiff to establish ownership.
For further details, please, see the replies to questions 25 and 26.
31. Articles 50.3 and 50.8 require that judicial and administrative authorities be
authorized to provide a security or equivalent assurance to protect the defendant.  Withrespect to each intellectual property right identified in Article 1.2 of the TRIPS Agreement,please cite the legal authority establishing a security or equivalent assurance.
Under Article 156(1) of the Code of Civil Procedure, the court may subject the ordering of
a provisional measure to a security to be provided by the applicant.  Furthermore, in intellectualproperty cases, the court may subject the ordering of preliminary production of evidence toproviding security.
It is the court which, considering all relevant circumstances of the case, determines the sum
of the security.  For further details see the replies to questions 25 and 26.
32. Article 50.4 requires that parties be notified when provisional measures have been
adopted inudita altera parte .  Please describe briefly the procedures followed by each authority
able to adopt such measures for notifying affected parties and state the time within which suchnotice must take place.
Under Article 156(2) of the Code of Civil Procedure, the request for a provisional measure
can only be submitted after the statement of claim has been filed.  The court, however, may decide
on the provisional measure even before the first hearing.IP/Q4/HUN/1
Page 43
Article 156(4) of the Code states that the hearing of the parties may only be omitted if the
provisional measure is urgently needed or if the party does not comply with the time-limit or periodfixed for the hearing.
Under Article 156(6), the court's decision on a request for a provisional measure constitutes
a judge's order against which an appeal may be lodged.
Under Article 219(2) of the Code of Civil Procedure, a decision must be put down in
writing within eight days from its passing.
An order passed without hearing has to be communicated by way of service to the interested
party (Article 219(1) d).
For further details see the replies to questions 25 and 26.
33. Article 50.4 also requires that defendants be afforded a review process to determine
whether provisional measures should be modified, confirmed, or revoked.  Please describebriefly the procedures a defendant must follow to initiate review proceedings in each of theauthorities able to adopt such measures and identify the period within which such proceedingsmust be initiated.
The time-limit for appeal is fifteen days from the communication of a decision (Article 234
of the Code of Civil Procedure).  The court may order that the decision concerning the provisionalmeasure be executed in advance irrespective of the appeal lodged.
The judge's order on the provisional measure remains in force until it is repealed by the
court at the request of a party or a judgement is passed subsequently on the merits of the case(Article 156(5) of the Code of Civil Procedure).
34. Article 50.5 requires that competent authorities be authorized to require applicants to
supply other information necessary for the identification of goods concerned by the authoritythat will execute the provisional measures.  Please describe briefly what other information maybe required by the authorities and cite the legal authority establishing the basis for thissupplemental information.
With regard to civil law remedies there are no special provisions, therefore the general rules
are applicable to the supply of information necessary for the identification of goods concerned.
In respect of customs administration proceedings, the legal authority is the Border Measures
Decree.
The application has to contain the description and relevant characteristics of the goods to
facilitate identification and the circumstances, data, documents that suggest that the infringement isprobable.
The place where the goods can be found, their place of destination, such detailed data as
enable the shipment, consignment or the package to be identified, the denomination of the importer,exporter or the owner of the goods, the expected time and place of arrival or departure of the goods
may be required by customs authorities as supplemental information.IP/Q4/HUN/1
Page 44
See Hungary's reply to question 16 of the Checklist of Issues on Enforcement.11
35. Articles 50.6 and 50.8 provide that if proceedings leading to a decision on the merits
are not initiated within a reasonable time, provisional remedies granted by competentauthorities shall be revoked or otherwise cease to have effect, at the request of the defendant.Please identify the relevant provisions in the law of Hungary authorizing the revocation orcessation of provisional measures if review proceedings are not initiated within a reasonabletime and specify what constitutes a "reasonable time period" to initiate proceedings.
Under Article 156 of the Code of Civil Procedure, the request for a provisional measure
cannot be filed before filing the statement of claim.
The order on the provisional measure remains in force until it is repealed by the court at the
request of a party, or a judgement is passed subsequently on the merits (Article 156(5) of the Codeof Civil Procedure).
36. Articles 50.7 and 50.8 provide that judicial and administrative authorities shall have
the authority to order the applicant to provide the defendant appropriate compensation forany injury caused by the adoption of provisional measures when said measures are revoked,have lapsed, or when it has been determined that there has been no infringement or threat ofinfringement.  Please describe how the competent authorities determine "appropriatecompensation".
The general rules of the Civil Code are applicable to an injury caused by the adoption of
provisional measures when those measures are revoked, have lapsed, or when it has beendetermined that there has been no infringement.
The relevant rules of the Civil Code read as follows:"Article 339(1) That person who causes damage to another person in contravention of law, shall
compensate for it.  He shall be relieved of liability if he proves that he has acted asit is generally expectable in the given situation.
(2) A person liable for the damage may be partially relieved of his liability by court on
the basis of circumstances deserving exceptional appreciation.
"Article 340(1) A damaged person shall act in order to prevent or mitigate the loss as it is generally
expectable in the given situation.  The part of the loss that derived from the failureof the damaged person to perform this obligation, shall not be compensated for.
(2) Omission of all those for whose conduct the damaged person is responsible, shall be
to his charge.
                                                     
11 Document IP/N/6/HUN/1.IP/Q4/HUN/1
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"Article 344
(1) If the damages are caused jointly by two or more persons, they shall bear joint and
several liability towards the damaged person, while their liability towards oneanother shall be divided in proportion to the imputability of their conduct.
(2) The damage shall be divided in equal proportions between/among the persons who
caused it if the imputability of their conduct cannot be ascertained.
(3) A court may omit to declare joint and several liability and may condemn the persons
having caused damage in proportion to their respective contributions, if:
(a) this does not risk compensation for damage and does not delay it
significantly, or
(b) the damaged person has contributed himself to the occurrence of the
damage or was in delay in the enforcement of his claim without anyexcusable reason.
"Article 355(1) The person liable for the damage shall restore the original state, and if it is not
possible, or if the damaged person does not wish so for a well-founded reason, heshall compensate for the pecuniary and non-pecuniary damage of the damagedperson.
(2) Damage shall be compensated for in cash, unless the circumstances justify
compensation in kind.  Compensation in kind may be especially justified if theobject of compensation for damages is produced by the person causing the damage,too, or it is otherwise at his disposal.
[...](4) Under the title of compensation for damages, the decrease in value of the property
of the damaged person and pecuniary advantage lost due to the circumstance havingcaused the damage, as well as the indemnity or costs necessary for lessening oreliminating the pecuniary and non-pecuniary damages sustained by the damagedperson shall be compensated for.
"Article 359(1) If the extent of damages cannot be calculated precisely - even if only in part - the
person liable for causing damages may be obliged by court to pay generalcompensation of a sum enough for full material indemnification of the damagedperson.
(2) There is no place for reclamation of general compensation under the pretext that the
extent of actual damage did not reach subsequently the sum of general
compensation.  However, if the obligor pays annuity as general compensation, he
may claim reduction of the amount of the annuity or modification of the period ofpaying the annuity in accordance with the change in conditions."IP/Q4/HUN/1
Page 46
Special requirements related to border measures
37. Article 51 of the TRIPS Agreement requires that countries adopt procedures that
enable right holders to request suspension of the importation of counterfeit trademarked goodsand pirated copyrighted works.  Please identify the competent authority in Hungaryauthorized to accept applications for a request to suspend release of suspected infringing goodsand cite the relevant law or regulation governing such authority.
The competent authority in Hungary authorized to accept such applications is the customs
office where the import or export of illegal goods is expected to take place, or where the customsclearance of such goods has been initiated, or, in the case of a so-called general application, it maybe the National Headquarters of the Customs and Finance Guard.  The relevant Acts and Decreesare the following:
- Act No. C of 1995 on Customs Law, Customs Proceedings and Customs
Administration;
- Government Decree No. 45/1996 (III. 25.) Korm. on the Implementation of Act
No. C of 1995;
- the Trademark Act (for details, please, see the reply to question 1), in particular its
Article 28 authorizing right holders to claim - under the provisions of speciallegislation;
- measures by customs authorities to prevent infringing goods from entering into free
circulation on the domestic market;
- the Border Measures Decree (for details, please see the reply to question 1).
38. Please describe the procedures a right holder must follow to obtain border protection
by the competent authorities, e.g., if there is a formal application that must be submitted tothe competent authority, judicial or administrative, and the information required in therequest for suspension and cite the law or regulations providing such procedures.
Under the provisions of the Border Measures Decree, in order to prevent the internal entry
into free circulation (i.e. the importation), the export or re-exporting of the illegal (infringing)goods either a specific  or a general application may be submitted to the competent customs
authority.  The action of the customs authority may be requested regarding specific illegal(infringing) goods or shipments in the case of a specific application, whereas, in the case of ageneral application, the action may be required in relation to a specified producer or country oforigin for a period of up to six months.
The specific application must be submitted at the customs office where the import or export
of the illegal goods is expected to take place or where the customs clearance of such goods has beeninitiated.
Specific applications - where the place of the customs clearance is unknown - and general
applications must be submitted to the National Headquarters of the Customs and Finance Guard.
A written application by the right holder is required which must contain the following:IP/Q4/HUN/1
Page 47
(a) the verification that the protection of the trade mark, or the geographical indication,
or of the copyright or neighbouring rights in question exists in relation to thecustoms goods;
(b) a statement that the person is entitled to act against the infringement;(c) that person's request that the customs authority should take the appropriate
measures to place the illegal goods under direct customs supervision;
(d) the description and relevant characteristics of the customs goods to facilitate
identification, and the circumstances, data, documents which suggest that theinfringement is probable;
(e) the acknowledgment of the obligation to provide the security which is required by
Article 8 of the Decree;
(f) in the case of a general application, the period for which the observation is
required.
The right holder must communicate the following to the customs authority, provided he is
aware of them:
(a) the place where the customs goods can be found or their place of destination;(b) such detailed data that enable the shipment, consignment or the package to be
identified (with special regard to the data concerning the packaging and value of thecustoms goods and the transport vehicle);
(c) the denomination of the importer, exporter or the owner of the customs goods;(d) the expected time and place of arrival or departure of the customs goods;(e) all information concerning the customs goods or those involved which may be of
assistance to the customs authority.
39. Please explain whether procedures, permissible under Article 51 of the TRIPS
Agreement, are available to stop the export of goods suspected of infringing copyrights and/ortrademarks.
In customs administration proceedings, measures can, and have to, be taken against customs
goods and other goods in relation to which infringement of the protection of trademarks orgeographical indications, or infringement of copyright or neighbouring rights has been committed,even where such goods are destined for exportation or re-exportation.
[Follow-up question from the US]
In response to question 39, the Government of Hungary states that in customs
administrative proceedings, measures have to be taken where goods infringing trademarks,
geographical indications, copyrights, and neighbouring rights are being exported.  Pleasedescribe the manner in which such action against exports of infringing goods is carried out.IP/Q4/HUN/1
Page 48
The procedural rules of Section 3 of Decree No. 128 of 1997 are applicable in case of re-
export and export of infringing goods.
40. Article 52 of the TRIPS Agreement requires that rights holders wishing to stop
importation of counterfeit trademark goods or pirated copyright works present evidence to thecompetent authorities that there is prima facie infringement of their trademark or copyright.Please explain what evidence will constitute prima facie infringement in Hungary.
As far as border measures are concerned, an infringement can be seen as prima facie
infringement, if the application contains such elements that make the infringement appear probableto the competent customs authority.
41. Article 52 also requires that the right holder provide a "sufficiently detailed description
of the goods" to be stopped.  Please explain what is required of the right holder in Hungaryfor a description to be "sufficiently detailed".
The elements of the application must comply with the requirements set by Article 4 of the
Border Measures Decree (see the reply to question 38), otherwise the customs authority will rejectthe application.
42. Article 52 requires that the competent authorities notify the right holder that his
application is accepted within a reasonable time.  Please explain within what period of time thecompetent authority responds to a request for suspension of release of goods and, if theapplication is accepted, the length of time during which enforcement action will be taken.
Under Article 5 of the Border Measures Decree, the customs authority has to take a
decision on the merits within five working days of the date when the application was  lodged.  If aspecific application has been lodged to request a measure in relation to customs goods which havebeen submitted for customs clearance, the customs authority has to take its decision within fivedays, taking into account the needs of the customs clearance proceeding.
On the basis of an accepted application, the customs authority places the customs goods
under direct customs supervision for ten working days ,  and the right holder is forthwith notified
thereof.  This deadline may be prolonged by ten working days in a justified case.
43. Article 53.1 requires that the competent authorities have the authority to secure from
an applicant a security or equivalent assurance sufficient to protect a defendant and to preventabuse.  Please verify that the competent authorities identified above are empowered to requiresecurity or equivalent assurance and provide citations to the provisions of law or regulationthat grant them that authority.
Under Article 8 of the Border Measures Decree, the right holder must provide a security
for the customs authority in order to cover the costs of warehousing the customs goods which areplaced under customs supervision.  The security is also required of the applicant for the costs ofdestroying if the customs goods are to be destroyed, and for the possible damages payable to theperson submitting th e goods for customs clearance.
The amount of the security is 5% of the value of the customs goods if their value can be
established.  If their value cannot be established, the security is a monthly Ft 60 000 (approximatelyUS$ 300) for each application.  If a general application for a border measure cannot indicate theIP/Q4/HUN/1
Page 49
value of the goods, and, at the same time, it is filed for a period of six months, the amount of
security is as high as Ft 360 000.  If the application specifies more countries of origin, or more thanone type of goods, it obviously entails the corres ponding multiplication of the amount of Ft 60 000
(which is the basic amount of security).
If the amount of the security does not cover the costs mentioned above, the right holder
must pay for the difference.
The customs authority, taking into account the binding decision of the court on the merits of
the case, must account for the amount provided by the applicant as a security in accordance with therules of Act No. C of 1995 on Customs Law, Customs Proceedings and Customs Administration.
44. Article 53.2 provides that the owner, importer, or consignee of goods involving
industrial designs, patents, layout-designs or undisclosed information that have beensuspended by customs authorities should be able, in certain circumstances, to have such goodsreleased on payment of security sufficient to protect the right holder from infringement.Please identify what forms of intellectual property, if any, are subject to provisions ofArticle 53.2 and cite to the relevant provisions of law or regulations.
The Border Measures Decree concerns only measures to be taken against customs goods
and other goods in relation to which infringement of the protection of trademarks or geographicalindications, or infringement of copyright or neighbouring rights has been committed.  Therefore thegoods mentioned in Article 53.2 of the TRIPS Agreement are not covered by the Decree at all.
45. Article 54 requires that the importer and the applicant be notified promptly of the
suspension or release of goods.  Please specify the period within which the competent authorityto issue a notice that the release of goods has been suspended.
The general rule is to promptly (forthwith) notify the parties in all cases.
46. Article 55 makes it clear that the right holder applying for suspension of infringing
goods must initiate a proceeding on the merits in an appropriate forum within a reasonableperiod of time or the goods will be released .  Please identify the fora in which an
applicant/party may initiate proceedings on the merits that will allow customs authorities tohold the goods beyond ten working days.
The right holder must prove within ten working days of receiving the notification on the
suspension of infringing goods that he has taken an action for infringement and has applied for aprovisional measure to be ordered by the  court.
If the right holder makes a statement that he does not wish to exercise his rights, or fails to
prove that he has applied for a provisional measure, or if the application for such a measure hasbeen rejected by the court, the customs authority must forthwith notify the person submitting thegoods to customs clearance, and, following this, the customs goods must be treated in accordancewith the application of this latter person.  At the same time, the customs authority notifies the rightholder of putting an end to the direct customs supervision.
47. Article 55 provides that a review is to take place within a reasonable time at the
request of the defending party to determine if the suspension measures should be modified,
revoked or confirmed pending the outcome of the proceeding on the merits.  Please identifyIP/Q4/HUN/1
Page 50
the forum that is authorized to conduct such a review and describe the procedure and cite the
applicable law or regulations.
Under Articles 5 and 6 of the Border Measures Decree, the right holder must prove within
ten working days of receiving the notification that he has taken an action for infringement and hasapplied for a provisional to be ordered by the  court.  The court decides, within fifteen working days
of receiving the application for an interim measure, at the latest, whether to maintain the suspensionas a seizure or release the goods.
(On provisional measures see the replies to questions 25-36.)
48. Article 56 requires that the authorities be able to require the applicant to compensate
the defending party for any injury caused if the detention of goods was unfounded.  Pleaseidentify the authorities that can order the applicant to pay the importer, consignee or ownercompensation for injury caused by wrongful detention or through the detention of goodsreleased pursuant to Article 55 and cite to the applicable law or regulations.
The importer, consignee or owner might lodge an application for compensation for injury
caused by wrongful detention or through the detention pursuant to Article 55 of the TRIPSAgreement to the competent court, in a separate procedure.  The reply to question 36 appliesmutatis mutandis  to such a case.
49. Article 57 requires that the competent authorities be able to authorize the right holder
to inspect the detained goods in order to substantiate the claims.  Please explain how rightholders are provided an opportunity to inspect suspect goods that have been detained bycustoms authorities.
The customs authority, observing the provisions on the protection of personal data, has to
provide information, at the request of the right holder, on the person applying for the customsclearance, on the name and address of the consignee of the customs goods, and it also has to ensurethat the right holder may observe and examine the customs goods in order that the right holder canexercise his rights.  For the purpose of accelerating customs proceedings, the customs authoritymay take samples from the customs goods.
50. Article 57 also requires that, where the decision on the merits favours the right holder,
the competent authorities also may be given authority to give the right holder informationregarding the importer, consignee or consignor.  If competent authorities in Hungary canprovide information regarding the importer, consignee or consignor to the right holder, pleaseexplain how information regarding names and addresses of consignors, importers andconsignees and quantities of goods are provided to the applicant after a positive decision ofinfringement is made, e.g., authorities automatically providing information or by submissionof a written request from the right holder, etc.  Please cite to the law or regulations providingsuch authority.
The customs authority, observing the provisions on the protection of data, has to provide
information, at the request of the right holder (which should be made in writing), on the personapplying for the customs clearance, and on the name and address of the consignee of the customsgoods.
In respect of the protection of personal data, Act No. LXIII of 1992 is also applicable.IP/Q4/HUN/1
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51. Article 58 specifies procedures to be followed where the competent authorities can act
ex officio.  Please explain whether the competent authorities in Hungary are empowered to actex officio and, if so, please identify the intellectual property areas subject to ex officio action.
Basically, the competent authorities can act ex officio in criminal and in administrative
cases.  In civil law cases, ex officio action is not possible.
The Border Measures Decree relates to trademarks, geographical indication, copyright and
neighbouring rights.  It provides for measures against infringements of these intellectual propertyrights.
The customs authority can take measures ex officio, namely, it can place the customs goods
under direct customs supervision, or it can decide to place the customs goods to a bondedwarehouse if it obtains such data through its other proceedings, that make it probable that the goodssubmitted for customs clearance are infringing goods.
If, in a proceeding initiated ex officio, the person of the right holder cannot be established,
the customs authority must contact the Hungarian Patent Office in the case of an infringement of theprotection of trademarks or geographical indications, or the relevant collective administrationorganization in the case of an infringement of copyright or neighbouring rights.
The Hungarian Patent Office, on the basis of the available data, must inform the customs
authority of the identity of the right holder within five days.
If the collecting administration organization does not provide information on the identity of
the right holder within five days, or does not wish to act against the infringement, the customsauthority will put an end to the direct customs supervision, and proceeds with the customs clearancein accordance with the application of the person submitting the goods.
52. Article 59 identifies the remedies that are to be available, including destruction or
disposal of infringing goods outside the stream of commerce.  Please explain what the law inHungary permits regarding the disposition of infringing goods, i.e., does the law allow fordestruction, disposal or both.  Please cite to the law or regulations providing such authority.
Hungarian law permits both destruction and non-commercial disposal of goods found to be
infringing.  For details see the reply to question 22.
53. Please identify:
(a) the competent authority that decides the disposition of the goods, i.e., whether
the goods will be destroyed or disposed of outside the stream of commerce; and
(b) the competent authority that carries out the destruction or disposal of the
goods.
(a) The competent Court.(b) The competent authority which was involved in the case previously (the customs
authority, the police, etc.), or the officers responsible for the execution of
judgements ("bailiffs").IP/Q4/HUN/1
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54. Article 60 permits Members to exclude from the provisions for border enforcement
small quantities of goods of a non-commercial nature carried by passengers or sent in smallconsignments.  Please describe what constitutes a de minimis  import that is excluded from the
border measures under the law of Hungary.
Non commercial traffic: importation or exportation of customs goods, goods not
constituting a commercial quantity, imported by, arriving for, exported or sent out by a naturalperson, to an individual or total value not exceeding the forint (Ft) amount defined, or below thevalue limit.
Alcoholic beverages: 1 litre of spirits;
  1 litre of wine;
 5 litres of beer.
Tobacco products: 500 cigarettes;
100 cigars; or
   100 grams of tobacco.
Coffee, tea, cocoa and all spice herbs and their mixtures thereof: 1 kilo each, except for:
seasoning paprika and the mixture thereof.
Other goods: up to the value of Ft 500/item 10 per type;
up to the value of Ft 2 000/item 5 per type;up to the value of Ft 5 000/item 2 per type;over the value of Ft 5 000/item 1 per type.
Motor vehicle: 1/year/family.
Criminal procedures
55. Article 61 of the TRIPS Agreement requires that Members have criminal procedures
and penalties, including imprisonment and/or monetary fines sufficient to act as a deterrent,at least for cases of wilful trademark counterfeiting and copyright infringement on acommercial scale.  Please describe the provisions in the law of Hungary that fulfil thatobligation and provide legal citations.
Article 329/A of the Criminal Code (see the reply to question 1) qualifies violation of
authors' rights and neighbouring rights as a crime in the following manner:
"(1) That person causing financial prejudice by violating the right of the author on his
literary, scientific or artistic work, or that of the performing artist on hisperformance, or that of the producer on his sound recording, or that of the radio ortelevision broadcaster on his program, shall be deemed to commit a misdemeanour,and shall be imprisoned up to two years, punished to do work  for the benefit of thepublic, or fined.
"(2) The penalty for a felony shall be imprisonment up to three years, if the violation of
authors' rights and neighbouring rights:
(a) causes considerable financial prejudice (over Ft 2 000 000);IP/Q4/HUN/1
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(b) is committed in a businesslike manner.
"(3) The penalty shall be imprisonment up to 5 years, if the violation of authors' rights
and neighbouring rights is committed by causing particularly great financial
prejudice (over Ft 6 000 000).
"(4) That person, who commits the violation of authors' and neighbouring rights
recklessly, shall be punished for a misdemeanour with imprisonment up to one year,or with work to be done for the benefit of the public or with fine."
These provisions of the Criminal Code entered into force on 15 May 1993.Furthermore, under Article 329 of Criminal Code, an infringement of rights to intellectual
creations is committed when a person makes the false impression that he owns the intellectualcreation, invention, innovation or industrial design of another person, and causes thereby pecuniarydisadvantage to the entitle d party, or, misusing his job at an economic organization, makes the
utilization or assertion of an intellectual creation, invention, innovation or industrial design ofanother person dependent on his being given a share in the fee derived, or in the profit or gainsoriginating therefrom.  This sort of infringement is a felony and is punishable with imprisonment upto three years.
As a result of an amendment to the Criminal Code in 1994, false indication of goods also
amounts to a crime, which can be punished by imprisonment up to three years.
56. Article 61 also requires that remedies in appropriate cases include the seizure,
forfeiture and destruction of infringing goods and any materials and implements thepredominant use of which has been the commission of the offence.  Please explain theprovisions in the law of Hungary that provide for such remedies, describe the circumstances inwhich those remedies would be imposed and provide legal citations.
Under the Criminal Code, seizure and forfeiture (confiscation) is possible in all cases.The basic rules are the following: The property must be confiscated which has been used or
designed as an instrument for the perpetration of a crime, if it is owned by the perpetrator, and alsootherwise, if its possession endangers public security; or which came into being through theperpetration of a crime; or which has been received by the perpetrator of a crime from the owner orfrom another person with the owner's consent, in return for the perpetration.  That printed pressmaterial in which crime is realized must also be confiscated.  In cases defined by the law, thatproperty must be confiscated in respect of which the crime has been perpetrated, or which was theobject of a given pecuniary advantage.
In the case of violation of authors' rights and neighbouring rights, the tangible property
owned by the offender in respect of which the offence has been committed, must be confiscated.Confiscation is admissible even when the tangible property is not owned by the offender, but theowner has previously been aware of the commission of the offence (Article 329/A (5) of theCriminal Code).
57. Article 61 also indicates that Members may provide for criminal procedures and
penalties in cases of wilful infringement of other forms of intellectual property.  Please
describe any provisions in the law of Hungary that provide for such procedures and remediesand provide legal citations.IP/Q4/HUN/1
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Under Article 296 of the Criminal Code false indication of goods is a crime: the person
who markets goods of considerable quantity - w ithout the consent of a competitor - with such
characteristic external appearance, packaging or name from which the competitor or his goodshaving characteristic, features can be recognized, commits a felony, and is punishable byimprisonment up to three years.  Furthermore, deception of consumers is committed when theperson who - in the interest of increasing the marketability of goods - states before large publicityuntrue facts in a way suitable for deception in respect of essential features of the goods, or givesinformation suitable for deception about an essential feature of the goods.  It is a misdemeanour andpunishable by imprisonment up to two years, labour in the public interest or a fine.  For thepurposes of applying these provisions the following qualify as essential features of goods: theircomposition, usability, their influence on health or environment, their treatment, origin, whetherthey meet legal requirements, standards or habitual requirements for such goods, as well as if theutilization of the goods requires the realization of conditions essentially differing from habitualones.
58. Article 61 requires that criminal penalties be sufficient to provide a deterrent at least
for wilful trademark counterfeiting and copyright piracy.  Please explain how the penaltiesprovided under the laws of Hungary comply with that obligation.
See the replies to questions 55-57.
[Follow-up questions from the US]1. Please provide statistical information related to civil copyright, trademark,
geographical indications, industrial designs, patents, integrated-circuit layout designs, andtrade secret enforcement for each of the years 1996 and 1997,  including the number of casesfiled;  injunctions issued;  infringing products seized;  infringing equipment seized;  casesresolved (including settlement);  and the amount of damages awarded.
The Government of Hungary reserves its previous position relating to the submission of
statistical data.
12
2. Please provide statistical information related to criminal enforcement in the area ofcopyright piracy and trademark infringement for each of the years 1996 and 1997, includingthe number of raids, prosecutions, convictions, and the amount of fines and/or jail terms(including whether the fines were paid and whether the jail term was actually served or wassuspended) and any other information establishing that your criminal system operateseffectively to deter copyright piracy and trademark counterfeiting.
See the reply to follow-up question 1 above.
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12 See Hungary's intervention in the minutes of the meeting of the Council in document IP/C/M/16
paragraph 49.