HUNGARY LAW AND PRACTICE Contributed by: Pál Szabó, Barnabás Simon, Eszter Katona, Ádám Simon, Mihály Harcos, Karim Laribi, Gábor Kutai and István Szalay-Csala, Bird & Bir d
cease and desist order, seizure or destruction of the infringing products, restitution of unjust enrichment and claim for damages. In certain cases, IP infringers are prosecuted in criminal proceedings. Alternatively, rights-holders may request the compe - tent customs authorities, by filing an application for action (AFA) to take action against certain goods sus - pected of infringing IP rights. The legal framework of customs enforcement based on an AFA is regulated both at the EU and national levels and can be based on national and/or EU IP rights. Another legal tool for rights-holders is the notice and takedown procedure to remove infringing content from the internet. This procedure is set out in Direc - tive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market and in Act CVIII of 2001 on certain issues of electronic commerce ser - vices and information society services. According to this procedure, any rights-holder whose copyrights or trademark rights have been infringed by information made accessible online by an intermediary service provider can request the removal of such information. Limitations In certain cases, a compulsory licence can be request - ed for patents. For example, if a patent has not been used/licensed or prepared for use to satisfy domestic demand, a compulsory licence could be granted upon request. Furthermore, the SZTNH can grant a public health compulsory licence to meet domestic needs in a public-health emergency. Furthermore, according to Act LXXVI of 1999 on Cop - yright (the “Copyright Act”), AI-generated works are not protected by copyright, as these are not created by natural persons, who qualify as authors under the Copyright Act. In practice, this limitation is relevant in the IT sec - tor where AI is heavily used in software development. There are no clearly established best practices to address the lack of copyright protection for AI-gener - ated works, but some market players indicate where software source code is generated by AI in order to
clearly identify where copyright protection does not apply (AI watermarking). Furthermore, from a transac - tional perspective, trade secret (including know-how) protection of software source code becomes more and more valuable as trade secret protection is the main IP right that can currently offer protection for AI-generated works. 11.3 Data Protection and Privacy Considerations Relevant Data Protection Laws and Regulations in Place Data protection issues are regulated in general by Reg - ulation (EU) 2016/679 (GDPR) and Act CXII of 2011 on the Right to Informational Self-Determination and on the Freedom of Information, the latter of which applies in areas that fall outside the scope of the GDPR or where member state deviations are permitted by the GDPR. In addition, there are several sectoral laws that are relevant for data protection compliance, such as laws regulating the area of e-commerce, advertising, healthcare, security services and CCTV monitoring, employment, telecommunication and banking. Extra-Territorial Scope of Data Protection Laws The GDPR may apply to companies even without a business presence in Hungary if the company targets anyone in the territory of the EEA with its services or monitors their behaviour. Each sectoral law comple - menting the application of GDPR has its own scope of application, but many times they include a similar scope as outlined in the case of GDPR. For example, the relevant sectoral laws are applicable to all busi - nesses that target Hungary with their information soci - ety services, telecommunication services, healthcare services and security services, irrespective of their place of establishment. Enforcement GDPR violations are subject to a two-tier adminis - trative fine, the higher tier being fines up to EUR20 million, or up to 4% of the total worldwide annual turnover of the company in the preceding financial year. The Hungarian data protection authority decides on the amount of the fine, at its discretion, by tak - ing into account the circumstances of the case, such as the gravity, the intentional or negligent character of the violation, actions taken to mitigate the dam -
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