Hungary updates

Competition & Antitrust

Contributed by Schoenherr Attorneys at Law
Influencers have been targeted by the HCA, but what about buying followers?
  • Hungary
  • July 05 2018

With the global development of the Internet, life has changed radically in just a few decades, and legislation can barely keep up. The Hungarian Competition Authority (HCA) has been monitoring developments and has not been afraid to intervene in the interests of fair competition and the protection of consumer rights. Influencers have recently been targeted by the HCA, especially regarding their promotional activity.

Compliance and compensation in consumer protection cases: the Vodafone example
  • Hungary
  • February 01 2018

A recent Hungarian Competition Authority (HCA) decision concerning Vodafone demonstrates that a reasonable cooperative approach may significantly affect the level of fine imposed on an undertaking, as the HCA reduced the fine imposed on Vodafone by more than 50% based solely on its cooperative measures. Although this case is unique, it signals that compliance and cooperation efforts which exceed the necessary legal requirements do not go unnoticed.

HCA uses new investigative tool under merger control regime
  • Hungary
  • November 30 2017

The Hungarian Competition Authority (HCA) was recently given significant new investigative powers under the framework of its merger control duties. Should parties decide not to submit a voluntary filing when meeting the voluntary notification threshold, the HCA can initiate an investigation on its own accord and undertake a fully fledged merger control proceeding. The HCA recently announced that it has commenced its first such ex officio merger control investigation.

Legality of large retail chains' use of rebates remains dubious
  • Hungary
  • August 24 2017

Following a Hungarian Competition Authority (HCA) decision that its rebate system violated the Trade Act, retail chain Spar went all the way to the Supreme Court. All judicial forums upheld the HCA's decision and the illegality of such rebates seemed to be settled. However, the Budapest Metropolitan Court recently overturned another HCA decision, which was somewhat surprising considering that the Supreme Court had already upheld the HCA's decision in the relatively similar Spar.

HCA steps up against bid rigging in public procurement
  • Hungary
  • July 06 2017

Public procurements are often targets for bid rigging and the Hungarian authorities and legislature have made extra efforts to fight this kind of behaviour. While it is not the primary authority for monitoring public procurements, the Hungarian Competition Authority (HCA) is one authority fighting anti-competitive behaviour in public procurement. Besides investigating violations, the HCA is also taking steps towards prevention and raising awareness.


Employment & Benefits

Contributed by Schoenherr Attorneys at Law
Decline in turnover as grounds for dismissal
  • Hungary
  • June 27 2018

Hungarian law generally requires employers to justify the termination of an employment relationship, and economic grounds generally serve as valid grounds for dismissal. A recent Supreme Court case clearly shows that even when an employer has a rightful interest in dismissing certain employees for economic grounds, the justification of the dismissal must be formulated correctly in accordance with the law. Otherwise, employers may have difficulties protecting themselves in court.

Use of electronic documents in employment relationships
  • Hungary
  • April 11 2018

With the constant development and advancement of digital technologies, the use of paper-based documents is gradually decreasing in all areas of life. This trend has inevitably affected the employment sector, as both employers and employees have an increasing need to reduce the volume of paper-based documents used in employment relationships. At the same time, the use of electronic documents has raised several practical questions.

Procedural aspects of equal treatment claims
  • Hungary
  • January 31 2018

The Supreme Court recently issued a reasoned opinion on certain legal and procedural aspects of employment-related suits involving equal treatment claims. The reasoned opinion addresses, among other things, the interpretation of the burden of proof in such suits, the equal pay principle, the concept of discrimination based on other grounds and the way of hearing and deciding anti-discrimination claims in suits initiated on the grounds of unlawful dismissal.

Incapacity to work – what can employers do?
  • Hungary
  • November 22 2017

Employers are often frustrated by employees' incapacity to work for health reasons, but they must act with care when addressing such situations. In an attempt to protect employee interests, legal regulations provide certain restrictions on what employers can do if an employee is unable to work for health reasons. A recent Supreme Court decision has further clarified some of these restrictions.

Intragroup transfers of HR data
  • Hungary
  • September 20 2017

Organisations with legal entities and employees in several EU member states often try to centralise their human resources (HR) functions to some extent, which occasionally requires them to share employee and HR data within their group. Although existing Hungarian law provides a stable legal environment with clear rules for employers as data processors, there is a general feeling of uncertainty around this topic, which is partly due to the upcoming entry into force of the EU General Data Protection Regulation.


Energy & Natural Resources

New initiatives introduced to meet 2020 renewable energy targets
  • Hungary
  • October 03 2016

The government is supporting a range of projects to achieve its 2020 renewable energy targets, including Hungary's first small-scale geothermal power plant and an e-mobility action plan. Alongside these sector and project-specific incentives is the mandatory feed-in tariff system – an overall system of incentives for renewable energy intended to subsidise electricity that is produced from renewable, waste and co-generated energy.

FIT system: an overview
  • Hungary
  • September 19 2016

In 2003 the feed-in tariff (FIT) system was introduced to subsidise electricity production from renewable, waste and co-generated energy. In January 2008 MAVIR Zrt, which operates the FIT system, established the mandatory feed-in balance group. Electricity producers that are eligible to join the balance group are subject to certain requirements regarding annual production forecasts, payment obligations and takeover terms.


Intellectual Property

Contributed by Danubia Patent & Law Office LLC
Licensee of similar prior mark not infringer
  • Hungary
  • June 25 2018

Although unable to find a precedent in Hungarian case law, the Metropolitan Tribunal was still able to arrive at a convincing decision in a recent case involving a licensee's use of a mark which had been registered before the plaintiff's similar mark. Surprisingly, the plaintiff not only continued the litigation after recognising that the defendant was a licensee of the proprietor of a prior mark, but also filed an appeal.

Obtaining trademark protection for distorted terms
  • Hungary
  • June 18 2018

Brand owners often distort descriptive terms or generic names in order to register them as trademarks. Whether they succeed depends on the level of difference between the two terms. A recent Metropolitan Tribunal opinion in this regard was supported by the EU General Court's judgment in Doublemint, according to which a word's descriptive character must be material in respect of the relevant goods and enable the public to immediately recognise the characteristics of such goods.

Significance of use in opposition proceedings
  • Hungary
  • April 23 2018

Case law clearly demonstrates that opponents in opposition and cancellation procedures must often prove the genuine use of their mark. However, whether online publicity constitutes acceptable proof of use has been the subject of debate. In a recent case, the Metropolitan Tribunal expressly recognised the role of the Internet in commerce and imposed a higher standard of use – namely, evidence of realised sales – as proof of genuine use.

Do pharmaceutical marks deserve higher level of protection?
  • Hungary
  • March 12 2018

The Hungarian Intellectual Property Office and the Metropolitan Tribunal recently dismissed an opposition of an applied-for mark on the basis that there was no likelihood of confusion. However, the appeals court disagreed, holding, among other things, that an assessment of a likelihood of confusion is more sensitive for conflicting pharmaceutical marks than for marks designating other goods. Although the court's decision is well grounded in Hungarian case law, it has been disputed for a number of reasons.

ARILUX mark cancelled for likelihood of confusion
  • Hungary
  • February 12 2018

The owner of the EU trademark ARIEL, registered in Class 3, recently requested the cancellation of the later mark ARILUX, registered for goods in the same class. The Hungarian Intellectual Property Office granted the request and cancelled the ARILUX mark. It found that, as the two word marks had identical beginnings and both consisted of three syllables, there was a strong similarity between them. The Metropolitan Court of Appeal upheld the ruling.