This page contains a Flash digital edition of a book.
HUNGARY


CONTROLLING YOUR AGENTS: TRADEMARK RISKS


Michael Lantos Danubia Law Offi ce LLC


It is generally known that if an agent of a company which owns certain branded products fi les a trademark application in his own name without the consent of the company, it gives cause to an opposition or cancellation against the trademark. T e borderline between an opposition and cancellation lies in whether the owner company has been informed about the fi ling within the opposition period or not. T is is regulated in the Hungarian Trademark law (TML) in Article 6, which states: “A designation is excluded from trademark protection if the representative or agent has fi led it in his own name without the consent of the rightful owner except [when] the agent proves that his proceeding was correct.”


T is comes with the condition that the brand owner does not have a trademark protection in Hungary or a Community Trademark which also covers Hungary.


In proceedings initiated on the basis of Article 6, the petitioner company has to prove that before the fi ling or priority date of


the attacked


trademark or application there was a business relationship between the company and the agent concerning the branded goods on the basis of which the applicant can be qualifi ed as an agent. T e term ‘agent’ is interpreted in a broad sense; the retailer or wholesale dealer of a foreign company can qualify as an agent. T ere is no need to show a separate contractual agreement; copies of invoices and shipping documents concerning the branded goods can be suffi cient. It is preferred to prove that the relationship has existed across a longer period of time.


T e last clause in Article 6 is rather vague: there are very few situations in which such an excuse can be accepted. One possible reason is if the agent immediately transfers the rights to the company and points out that the protection was needed to defend the brand from counterfeiters.


From a procedural point of view, litigation based on Article 6 can be rather long, because the petition should be fi led at the Hungarian Intellectual Property Offi ce (HIPO), which decides in a hearing with a three-member


74 World Intellectual Property Review e-Digest 2013


panel. T ere are two instances for appeal against the decisions of the HIPO. T e fi rst is the Metropolitan Court of Budapest, which is the single competent court for such cases in the whole country, while the second instance forum is the Metropolitan Appeal Court.


T e use of Article 6 is not the only way for the original brand owner to act against the agent. Article 19, paragraph 5 of the TML reads: “If the representative or the agent has fi led a trademark application in his own name or obtains registration without the consent of the owner of rights, this owner may claim the assignment of the trademark or of the application rights, except [when] the agent supports that his proceedings were correct.”


From procedural point of view, this is a simpler and shorter way for the trademark owner to take rights away from the agent than the use of Article 6, because the procedure starts at the Metropolitan Court level, and doesn’t involve the HIPO. From a substantive point of view this way is preferable, since at the end of it the trademark protection remains in force, and only the owner of the right changes.


But it’s a bit more complicated than that in practice.


In one case, a British fi rm sold spectacle frames and accessories, and (as it turned out later) it sold one or two own-brand products and was also the dealer for other more and less famous brands. In an international exhibition a Hungarian sales company saw the collection of this British fi rm, and started importing the frames with the fi rm’s own brand. T e brand had trademark protection in the UK only. T e good relationship between the fi rm and the company lasted more than fi ve years, and by the end of this period the company, which was in fi nancial diffi culties, paid the invoices with increasing delays, at which point the British fi rm terminated the business relationship with the company and started to sell through a diff erent channel. To the great surprise of this new channel and the British fi rm, they received a warning from a diff erent Hungarian


www.worldipreview.com


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68  |  Page 69  |  Page 70  |  Page 71  |  Page 72  |  Page 73  |  Page 74  |  Page 75  |  Page 76  |  Page 77  |  Page 78  |  Page 79  |  Page 80  |  Page 81  |  Page 82  |  Page 83  |  Page 84  |  Page 85  |  Page 86  |  Page 87  |  Page 88  |  Page 89  |  Page 90  |  Page 91  |  Page 92  |  Page 93  |  Page 94  |  Page 95  |  Page 96  |  Page 97  |  Page 98  |  Page 99  |  Page 100  |  Page 101  |  Page 102  |  Page 103  |  Page 104  |  Page 105  |  Page 106  |  Page 107  |  Page 108  |  Page 109  |  Page 110  |  Page 111  |  Page 112  |  Page 113  |  Page 114  |  Page 115  |  Page 116  |  Page 117  |  Page 118  |  Page 119