Hungary: Compulsory license to tackle public health issues

In brief

According to Governmental Decree No. 212/2020. (V. 16.) (Decree), the Hungarian Intellectual Property Office (HIPO) may issue a public health compulsory license to meet the national demand related to the health crisis as defined in the Healthcare Act (a health crisis includes pandemics like the current COVID-19 pandemic).


Contents

The compulsory license may be issued in respect of:

  1. medicinal products or active substances under patent or SPC protection, medical devices or investigational medicinal products under patent protection (hereinafter collectively referred to as health products) or
  2. for procedures, equipment or devices under patent protection that may be necessary to manufacture the health products.

An application for a compulsory license has to be submitted to HIPO. HIPO will notify the patent holder concerned, within 8 days from the receipt of the application, that an application for a compulsory license was submitted regarding its invention. Proceedings initiated due to patent infringement regarding the patent or SPC indicated in the application and the relating interim measures against the applicant for the compulsory license have to be suspended until the issuance of the HIPO's decision. The administration fee of the application for compulsory license is HUF 148,000.

HIPO will decide to grant the compulsory license or to reject the application without conducting a hearing and notify the applicant on its decision in writing. In addition, HIPO will also notify the patent holder about its decision within 8 days from the issuance of the decision.

The compulsory license does not grant exclusive rights; the licensee may not provide a sub-license based on the compulsory license. The patent holder is entitled to a license fee for the compulsory license. The amount of that license fee will be determined by HIPO based on license analogue. The patent holder may claim damages in case of unlawful exploitation in compliance with the Act XXXIII of 1995 on the Patent Protection of Inventions.

The duration of the compulsory license is determined by HIPO according to the information provided by the National Institute of Pharmacy and Nutrition (OGYÉI), taking into consideration the needs suitable for the management of a health crisis. A compulsory license may only be granted until 31 March 2021. The licensee may waive the compulsory license at any time.

The compulsory license shall be terminated upon either the waiver, the expiry of the term specified for the license or the termination of the patent or SPC. In the event of waiver or termination due to expiry of the term, the health product that has not been placed lawfully on the market by the licensee and the equipment or device necessary for the production of the health product must be destroyed.

If the health product manufactured under the compulsory license may be placed on the market only with a regulatory approval/authorization, the regulatory authority will consider the contents of the compulsory license as proven during the authorization procedure. The relevant regulatory authority is OGYÉI in Hungary.

Health products manufactured under the compulsory license must be distinguished with unique identification from the products manufactured by the patent holder. The packaging and related documents must indicate that the given health product was manufactured under compulsory license only for the purpose of domestic distribution. If this requirement is not fulfilled by the licensee, OGYÉI may require the repackaging of the health product concerned.

The compulsory license will be registered in the patent registry or the SPC registry and official information about it must be published in the official gazette of HIPO.

Immediate legal protection shall not be provided against OGYÉI's decisions made during the term of the compulsory license and related to medicinal products manufactured under the compulsory license.

This alert was originally published in the EMEA Healthcare newsletter. Click here to read it.

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