PART I Legal Protection of Trademarks

CHAPTER I Conditions of Trademark Protection

Article 1 Subject Matter of Trademark Protection

Under the present Law, all marks shall be granted trademark protection which

(a)     are appropriate to distinguish goods and services (hereinafter “goods”) form other goods, and

(b)     the protection of which is not excluded by law.

Article 2 Distinctive Character

(1) A mark is appropriate for distinguishing if it gives to the goods compared with identical or similar goods a special, different character.

(2) A mark can consist of a word, a combination of words, a figure, a picture, a combination of colors, a two or three-dimensional device, an audio or visual signal or a combination of these elements.

(3) A mark lacks distinctive character particularly where

(a)     it is used generally to indicate the product;

(b)     it indicates exclusively the kind, quality, quantity, characteristics, purpose, value, place of origin or time of production of the goods.

Article 3 Marks Excluded form Trademark Protection

(1) A mark shall not be granted trademark protection if:

(a)     it is liable to create confusion;

(b)     its use would be contrary to law or socially accepted moral rules;

(c)     it infringes individual rights of third parties;

(d)     it is identical or confusingly similar to a trademark held by a third party and well-known in the country, even if that trademark is not registered in the country.

(2) Trademark protection shall not be granted to a mark which consists exclusively of the name, abbreviation, flag, armorial bearing or emblem of a state, an authority or an international or intergovernmental organization, or the imitation thereof; such marks may be used, however, with the authorization of the competent authority, as elements of trademarks.

(3) With respect to identical or similar goods, a mark shall not be granted trademark protection if:

(a)     it consists of official signs or hall-marks indicating control and warranty, or imitations thereof;

(b)     it has been under trademark protection for the benefit of a third party and, the protection having expired because of surrender or failure to renew, less than two years have elapsed since such expiration;

(c)     it is identical or similar, to a degree liable to create confusion, to a third party’s trademark registered on an earlier priority date or to a trademark effectively used but not registered;

(d)     it is the name of a protected plant variety or animal breed.

CHAPTER II Rights and Duties Deriving from Trademark Protection

Article 4 Right to Trademark Protection

(1) The right to a trademark and to legal protection thereof shall be enjoyed only by a party who has registered the mark in accordance with the procedure laid down in this Law. If more than one applicant seeks registration of the same mark or of similar marks, the trademark shall be registered in the name of the party with the earlier priority date, unless an interested party shows use prior to the priority date.

(2) Trademark protection shall be granted to an enterprise a cooperative, or to any other organ or party entitled to pursue economic activities (hereinafter collectively designated an “enterprise”).

(3) Associations of enterprises having legal personality (trade unions, professional associations, etc.) shall obtain collective trademark protection for trademarks intended to be used by associate enterprises, even where such associations are not entitled to engage in economic activities, provided

(a)     the goods of the enterprises have some common characteristics (e.g. regional character), and

(b)     the collective trademark is used by the enterprises under the control of the association.

Article 5 Obtaining Trademark Protection

Trademark protection is obtained by registration, with retroactive effect to the date of filing.

Article 6 Duration of Trademark Protection

(1) Trademark protection shall have a duration of ten years, beginning on the date of filing the application.

(2) Trademark protection shall be renewable for further periods of ten years. In case of renewal, the new period of protection begins on the day after the date of expiration of the previous period.

Article 7 Effect of Trademark Protection

The proprietor of a trademark shall, on the basis of trademark protection and within the limits fixed by legislation, enjoy the exclusive right to use the trademark for goods enumerated ont the list of goods or to grant licenses to others for its use.

CHAPTER III Contracts of Exploitation

Article 8 Conclusion of Contracts of Exploitation

On the basis of a contract of exploitation (agreement granting a trademark license), the proprietor of the trademark grants a license for the use of the trademark; in exchange, the user is under obligation to pay royalties.

Article 9 Rights and Obligations of the Parties

(1) A license agreement grants, for the duration of trademark protection, the right to use the trademark, without territorial limitation, for all goods enumerated on the list of goods. However, unless expressly stipulated, the user shall have no exclusive right of exploitation, and, unless expressly authorized by the proprietor of the trademark, he shall not grant a further license to a third party.

(2) The proprietor of the trademark may stipulate in the contract that the trademark shall be used only for goods having a specific quality. In such case, he shall have the right to control the quality of the goods, even if this is not mentioned in the contract.

(3) The contract of exploitation is void if its existence or application is liable to create confusion.

Article 10 Expiration of the Contract of Exploitation

The contract of exploitation expires, with prospective effect, when the duration fixed in it comes to an end, or if certain specified circumstances occur.

Article 11 Effect of the Rules Relating to the Contract of Exploitation

(1) The parties, by mutual consent, may lay down terms that differ from the provisions relating to contracts of exploitation, where this is not prohibited by legislation.

(2) Matters relating to contracts of exploitation and not covered by this Law shall be governed by the provisions of the Civil Code.

CHAPTER IV Transfer of Rights

Article 12

(1) The successor in title to an enterprise obtains trademark protection along with the enterprise.

(2) Trademark protection shall be assignable by contract. The contract of assignment is void where the successor in title has no capacity to acquire trademark protection, or where the assignment would cause the trademark to be excluded from protection, and especially where the assignment may lead to fraud.

(3) Matters of transfer of rights, not covered by this Law, are governed by the provisions of the Civil Code.

CHAPTER V Infringement

Article 13 Infringement of Trademark

(1) Any party who uses another party’s trademark or any confusingly similar mark, for goods on the list of goods, or for similar goods, commits trademark infringement.

(2) The proprietor of the trademark shall have the following civil remedies against the infringer, depending on the circumstances of the case:

(a)     the right to petition the courts for a declaration of infringement;

(b)     the right to seek an injunction against present and future infringement;

(c)     the right to demand satisfaction from the infringer by way of a declaration or by other appropriate means; if necessary, the declaration shall be made public by the infringer or at his expense;

(d)     the right to demand restitution of the enrichment obtained by the trademark infringement;

(e)     the right to seek a court order for seizure of the instruments used for the infringement and of the infringing products.

(3) The court may rule, depending on the circumstances of the case, that the seized instruments and products be divested of their infringing character or be auctioned pursuant to judicial procedure; in the latter case the court shall fix the sum to be collected.

(4) If the trademark infringement has caused material damage, damages shall be payable under the relevant provisions of the Civil Code. In assessing damages the impact of the trademark infringement on the entire economic activity of the enterprise shall be taken into consideration.

Article 14 Rights of the User in the Event of Trademark Infringement

In the event of trademark infringement, the registered user may institute proceedings in his own name, provided he has previously called upon the proprietor of the trademark to take appropriate action in order to put a stop to the infringement and the latter has failed to take action within thirty days.

Article 15 Decision of Non-Infringement

T1) Any party who fears that proceedings for trademark infringement will be instituted against him may, before the institution of such proceedings, request a decision ruling that the mark used or desired to be used by him does not infringe a particular trademark specified by him.

(2) A final decision of non-infringement bars the institution of infringement proceedings on the basis of the trademark concerned.

CHAPTER VI Expiration of Trademark Protection

Article 16 Causes of Expiration

Trademark protection shall expire:

(a)     when the period of protection expires without renewal, on the day following the date of expiration;

(b)     if the proprietor surrenders his trademark, ont the day following receipt of the surrender, or on an earlier date specified by the party surrendering the trademark;

(c)     if the trademark has not been used int the country for five years, on the date specified in the decision declaring expiration;

(d)     if an enterprise entitled to a trademark or an organization entitled to a collective trademark has ceased to exist without leaving a successor in title, on the day it ceases to exist;

(e)     if the trademark is declared null and void, with retroactive effect to the date of filing of the application (Article 19(1)).

Article 17 Surrender of Trademark Protection

The proprietor of a trademark may surrender trademark protection by written declaration addressed to the National Office of Inventions. If surrender affects the rights of third parties based on legislation, on decisions of an authority, or on a license agreement, surrender shall take effect only with the consent of the parties concerned.

Article 18 Expiration for Lack of Use

(1) A trademark is used on goods and wrappers and in business correspondence and advertising.

(2) Expiration of protection shall not be declared for lack of use if the proprietor shows adequate justification.

Article 19 Nullity of and Limitations on Trademark Protection

(1) Trademark protection shall be declared null and void with retreactive effect to its origin, if the mark does not satisfy the requirements laid down in Articles 1 to 3.

(2) If five years have elapsed since registration and the trademark has become known through effective use, nullity shall be declared only if such use is contrary to law or socially accepted moral rules (Article 3(1)(b)).

(3) If conditions of nullity exist only in relation to a part of the list of goods of the trademark, the list shall be limited accordingly.

PART II Procedure in Trademark Matters

CHAPTER VII General Regulations for Procedure before the National Office of Inventions

Article 20 Powers of the National Office of Inventions

The National Office of Inventions is empowered to

(a)     register trademarks;

(b)     renew protection of trademarks;

(c)     declare expiration of trademark protection;

(d)     declare nullity of trademark protection;

(e)     declare non-infringement;

(f)     deal with matters concerning the registration of trademarks

Article 21 Application of the General Previsions on Administrative Procedure

(1) The National Office of Inventions shall proceed in trademark matters, subject to the exceptions prescribed in this Law, by applying Law No. IV of 1957 on the General Provisions on Administrative Procedure. In the cases specified in special legislation, the National Office of Inventions takes decisions in camera.

(2) The National Office of Inventions shall not set aside or modify its decisions on trademark matters taken on the merits. Its decisions shall not be invalidated or changed by a supervisory authority; they shall be without appeal.

(3) Decisions in trademark matters taken by the National Office of Inventions may be modified by the court under the provisions of Article 37.

Article 22 Power of Attorney

(1) The National Office of Inventions may order the party, where warranted, to authorize a patent attorney or an attorney at law in order to represent him jointly or alone.

(2) An alien shall be obliged to give power of attorney to an attorney at law, a patent attorney or other qualified person, in order to represent him in proceedings before the National Office of Inventions.

Article 23 Registration of Trademark Matters

(1) The National Office of Inventions shall keep a Register of the registered trademarks and the rights and facts relative thereto. All relevant circumstances shall be recorded therein.

(2) Any right relative to trademark protection may be invoked against a third party who has acquired his right in good faith only if it is recorded in the Register.

(3) Information shall be recorded in the Register only on the basis of final decisions of the National Office of Inventions or of a court.

(4) The Trademark Register shall be accessible to anyone; copies of the information it contains shall be available on request

(5) All decisions and all facts the publication of which is prescribed by legislation shall be published in the Official Gazette of the National Office of Inventions.

Article 24 Restoration of Rights

In trademark proceedings — unless prohibited by legislation — a request for the restoration of rights can be submitted within fifteen days from the unobserved time limit, or the last day of the unobserved period.

Article 25 Use of Languages

In trademark proceedings, documents in foreign languages may also be submitted; the National Office of Inventions may, however, require a translation into the Hungarian language.

CHAPTER VIII Trademark Registration Procedure

Article 26 Application for the Registration of a Trademark

(1) The procedure for trademark registration shall begin with the filing of an application with the National Office of Inventions.

(2) The application shall consist of the claim, information concerning the required data and other enclosures. Detailed regulations concerning the formalities to be complied with in trademark applications shall be published by the President of the National Office of Inventions in the Official Gazette in the form of a notice.

(3) Rights can be based only on an application which contains at least the name and address of the applicant as well as the mark to be registered and the list of goods.

Article 27

Priority

(1) The date of priority giving rise to a right of priority shall be:

(a)     generally, the day on which the application for registration of a trademark arrived at the National Office of Inventions (application priority);

(b)     in the cases defined by special legislation, the filing date of the foreign application (Convention priority);

(c)     in the cases determinded by an announcement of the President of the National Office of Inventions published in the Official Gazette, the day of the exhibition of the trademark (exhibition priority).

(2) The order of priority of applications which arrived on the same day shall be determined by their serial number in the list of applications.

(3) The priority defined in paragraph (1)(b) and (c) can be claimed only by a party who has submitted his declaration of priority simultaneously with the trademark application. The document establishing priority shall be submitted — on pain of loss of the priority right — within three months of the filing of the application.

Article 28 Formal Examination of the Trademark Application

(1) The National Office of Inventions shall examine the trademark application in order to ascertain whether it comlies with the requirements prescribed in Article 26 (2) and (3).

(2) If the trademark application is so incomplete that no right can be based on it (Article 26 (3)), the application shall be rejected without further procedure.

(3) If the trademark application does not comply with the requirements set forth in Article 26 (2), the applicant shall be invited to remedy the defects. If the invitation is not complied with, the application for a trademark shall be rejected.

Article 29 Substantive Examination of the Trademark Application

(1) The National Office of Inventions shall examine the substance of the trademark application in regard to the following points:

(a)     whether the mark complies with the requirements preseribed in Articles 1 to 3; and

(b)     whether the application benefits from the claimed right of priority.

(2) If the examination as to substance reveals defects, the applicant shall be invited to remedy the same according to their character or to give an explanation.

(3) If the National Office of Inventions finds at the expiration of the delay set that the defects were not remedied, or in spite of this, that the sign is not fit for registration, it shall reject the application.

Article 30 Modification

(1) The applicant may not modify the trademark shown in the application.

(2) The list of goods of the trademark may not be enlarged.

Article 31 Registration of the Trademark

Depending on the results of the examination as to substance, the National Office of Inventions shall register the trademark or reject the application.

Article 32 Publication of the Trademark

The National Office of Inventions issues a trademark certificate. The trademark shall be entered in the Register of Trademarks and published in the Official Gazette of the National Office of Inventions.

CHAPTER IX Procedure in the National Office of Inventions in Matters of Registered Trademarks

Article 33 Renewal Procedure

(1) The proprietor of the trademark shall apply to the National Office of Inventions for renewal of trademark protection, giving the registration serial number.

(2) Renewal shall not contain modifications of the final version of the trademark registered.

(3) Renewal of trademark protection shall be recorded in the Register of Trademarks and published in the Official Gazette of the National Office of Inventions.

Article 34

Declaration of the Expiration of Trademark Protection

Expiration of trademark protection, as prescribed in Article 16(b) to (d), shall be declared by a decision of the National Office of Inventions, which shall be recorded in the Register of Trademarks and published int the Official Gazette of the Office.

Article 35 Procedure for Declaration of Nullity and of Expiration for Lack of Use

(1) Any party may request that protection of a trademark be declared null and void, or expired for lack of use. The request with its appendices shall be submitted in two copies to the National Office of Inventions. The request shall state the grounds upon which it is based. The originals of the documents in proof or certified copies thereof shall be appended to the request.

(2) The National Office of Inventions shall forward the request with its appendices to the proprietor of the trademark and shall invite him to make a statement. Following the written preparatory work, the National Office of Inventions shall give its decision on nullity or expiration in a hearing.

(3) If the request is withdrawn, proceeding may be continued ex officio. In the porceeding no settlement is permitted.

(4) The losing party shall be required to pay the cost of the procedure.

(5) Expiration shall be recorded int the Register of Trademarks and published in the Official Gazette of the National Office of Inventions.

Article 36 Proceeding for a Decision on Non-Infringement

(1) The petitioner shall submit his request for a decision on non-infringement to the National Office of Inventions, showing the mark used or to be used as well as the list of goods and specifying the trademark in question. The National Office of Inventions shall give its decision on non-infringement in a hearing.

(2) The costs of the procedure for a decision on non-infringement shall be born by the petitioner.

CHAPTER X Court Precedure in Trademark Cases

Article 37 Review of Decisions Taken by the National Office of ventions

(1) On request, the court may review the decisions of the National Office of Inventions taken with regard to:

(a)     registering the trademark or any entry in the Register;

(b)     declaration of expiration of trademark protection;

(c)     declaration of nullity of trademark protection;

(d)     non-infringement.

(2) Any person who took part, as a party, in the proceedings at the National Office of Inventions or who has a legal interest in review of the decision, or the procurator, may request that the decision be reviewed.

(3) The period within which such a request shall be submitted shall be thirty days from the day on which the party was notified of the decision.

(4) The request shall be submitted either to the National Office of Inventions or to the court. The National Office of Inventions shall forward the request, together with the relevant documents, within eight days.

Article 38 Jurisdiction

(1) Court proceedings for a review of decisions taken by the National Office of Inventions shall be under the exclusive jurisdiction of the Metropolitan Court of Budapest.

(2) The Supreme Court shall have jurisdiction to deal with appeals lodged against decisions of the Metropolitan Court of Budapest.

Article 39 Composition of the Court

In such proceedings, the bench of the Metropolitan Court of Budapest shall consist of three professional judges.

Article 40 Application of the Provisions of the Code of Civil Procedure

(1) In cases involving requests for the review of a decision on a trademark, the Court shall proceed in accordance with the rules of “non-contentious” civil procedure, with the departures mentioned in this Chapter. The procurator shall enjoy all rights which he otherwise has under such procedure.

(2) The court of first instance shall take evidence in accordance with the provisions of the Code of Civil Procedure and shall conduct a trial. If the case can be settled on the basis of documentary evidence, the court may take a decision without a trial, but the party, on request, shall be heard.

(3) The decision taken by the court of first instance shall be dealt with by the court of appeal in accordance with the provisions of the Code of Civil Procedure; the court may also take evidence within certain limits.

Article 41 Incompatibility

(1) In addition to the persons listed in Articles 13 to 15 and 21 of the Code of Civil Procedure, no one shall consider the case and act as judge if he

(a)     participated in taking the decision at the National Office of Inventions;

(b)     is a relative, former husband or wife — as stated in Article 13(2) of the Code of Civil Procedure — of a person mentioned under (a) above.

(2) The provisions of paragraph (1) shall also apply to court reporters and experts.

Article 42 Restoration of Rights

The provisions of Article 24 shall apply to claims for restoration of rights in proceedings of the Court.

Article 43 Representation

In addition to the persons listed in Article 67(1) of the Code of Civil Procedure, patent attorneys may also act as representatives.

Article 44 Decisions

(1) If the court changes a decision taken in a trademark case, the court judgement shall replace the decision of the National Office of Inventions.

(2) The court shall vacate the decision and order the National Office of Inventions to start new proceedings if a person against whom incompatibility may be invoked, participated in the taking of the decision or if important rules of procedure were infringed during the proceedings which cannot be remedied by the court.

Article 45 Review to Safeguard Legality

As to the review to safeguard legality, final decisions dismissing an application for trademark registration, declaring expiration of protection, or declaring nullity of trademark protection, cannot be set aside on the merits, and the Supreme Court shall be restricted to a ruling of error of law.

CHAPTER XI Trademark Litigation

Article 46 Jurisdiction

(1) Court proceedings for trademark infringement shall be under the exclusive territorial and subject matter jurisdiction of the Metropolitan Court of Budapest.

(2) In such proceedings, the bench of the Metropolitan Court of Budapest shall be composed as prescribed in Article 39.

(3) In the court proceedings referred to in paragraph (1), the provisions of the Code of Civil Procedure shall apply as well as the provisions of Articles 41 and 43 of this Law.

(4) In any other trademark litigation not mentioned in paragraph (1), the courts of comitats (or the Metropolitan Court) or the economic commission of arbitration shall proceed in accordance with the general rules.

PART III Final Provisions

Article 47

(1) This Law shall enter into force on July 1, 1970

(2) Simultaneously with the entering into force of this Law, the following shall be repealed:

—     the provisions of Law No. II of 1890 and of Law No. XLI of 1895 on the protection of trademarks still in force, legislation completing and amending those Laws (provisions concerning trademarks of Law No. XI of 1913, Laws No. XII of 1913, No. XXII of 1921, and No. XVII of 1932, Decree No. 20700/1948 (XI.24) of the Minister of Industry), as well as the provisions implementing that legislation;

—     Article 6(1) and (4), Articles 7 to 18 of Decree 121/1950 (IV.25) MT of the Council of Ministers concerning compulsory classification of goods produced in the country and the marking of certain goods.

(3) The President of the National Committee of Technical Development and the Minister of Justice shall be authorized to issue, by decree and in cooperation with the President of the National Office of Inventions, the transitional provisions concerning the entry into force of this Law and other rules of implementation.

(4) The minister of Justice shall be authorized to issue, in cooperation with the President of the National Committee of Technical Development and with the President of the National Office of Inventions, detailed rules on court procedure in trademark cases.