Posted: November 20th, 2014
Collection of evidence via temporary measures before main lawsuit interpreted by Court of Appeal, Budapest
Obtaining evidence prior to the commencement of the corresponding lawsuit is made possible in Hungary by Art. 207 of the Code of Civil Procedure (CCP) with specific additional provisions for patent infringement proceedings in the Patent Act. However, as these rules – as a precondition – require the patentee to establish the probability of a patent infringement with a high degree, patentees have not often motioned for preliminary collection of evidence in addition to their petitions for preliminary injunction so far, thus this tool has not yet been applied or interpreted by the competent judicial forums.
In a recent court case, however, the patent holder requested the Metropolitan Court in addition to a request for preliminary injunction to oblige the defendant to provide information as evidence obtained prior to the main lawsuit, which the court allowed together with the requested order of preliminary injunction. On appeal, the Metropolitan Appeal Court, as court of second instance reversed the decision in the part concerning the collection of evidence and rejected the motion of the plaintiff while maintained the preliminary injunction.
According to the facts of the case, the plaintiff’s patent covers certain mixing cartridges for single grip faucets. The defendant appeared on the Hungarian market with taps having cartridges inside that appeared to fall in the scope of the patent.
The patentee requested the Metropolitan Court to order a preliminary injunction and oblige the defendant to cease and desist from the infringing activity, more specifically to remove the infringing cartridges from their taps.
In addition, the plaintiff requested the court to oblige the defendant to provide information on the number of the use of the infringing cartridges, as well as on their source of manufacture. The plaintiff argued that this information might enable them to enforce the patent against the manufacturer if manufacturing takes place abroad where there might also be patent protection. The urgency of obtaining this information was justified in the opinion of the plaintiff due to the fact that being forced to wait for this obligation until the final judgment of the main lawsuit would delay by years their possibility to enforce the patent against the same infringing manufacturer abroad (due to the bifurcation of patent infringement and invalidity proceedings in Hungary). During this time their damages by the potentially unlawful manufacturing may multiply, the patentee argued. The plaintiff also referred to Article 31. of Regulation 44/2001/EC (Brussels Regulation) as the legal basis for requesting evidence to be used in a different jurisdiction.
The plaintiff therefore asked the court to oblige the defendant to provide the above information either under preliminary injunction (Art. 156 CCP) or under an order of prior collection of evidence (Article 207 CCP).
The court has examined the defendant’s products based on the technical drawings provided by the plaintiff and also studied a sample of the infringing product physically. The court found the product to be infringing and also found that other preconditions of ordering a preliminary injunction are met, partly in light of the lack of dispute from the defendant.
Regarding the balance of benefits and detriments it was a decisive factor that the defendant was not obliged to terminate the sales of their tap products as such, they only had to replace the infringing cartridges therein, regarding the costs of which the court ordered the plaintiff to deposit a security bond at the court, should the preliminary injunction be reversed later.
Interestingly, even though other circumstances sufficiently justified the ordering of the preliminary injunction, the court pointed out that the plaintiff did not argue successfully about the infringing activity causing directly threatening, irreparable damages to them due to the fact that with the ongoing sales of the infringing product, damages already began to occur. In addition these damages did not threaten the existence of the patentee who had significant commercial potential and the damages were in fact reparable.
Furthermore, the court emphasized that regarding preliminary injunction it is irrelevant whether the defendant was aware of the infringing nature of their products, whether it is a financially stable company and whether it is a competitor of the patentee.
Regarding the defendant’s obligation to provide information on the person of the manufacturer of the infringing cartridges the Metropolitan Court found that it is justified as an obligation which is not ruled by the measures of preliminary injunction (Art. 156 of the Code of Civil Procedure) but by those of prior collection of evidence (Art. 207 of the Code of Civil Procedure).
The Metropolitan Court argued that the purpose of preliminary injunction is to interfere with ongoing infringement with immediate effect and not to discover facts or facilitate the obtaining of evidence. The aim of the patentee to discover the defendant’s network related to the infringement so that they may sue the manufacturer abroad does not concern the present preliminary injunction but the potential lawsuit abroad instead. The court pointed out that there are procedural means to obtain such information even prior to the end of the main lawsuit and preliminary collection of evidence is one of them, which was justified in the present case. The court of first instance did not mention the Brussels Regulation in its motivation.
The defendant appealed both the preliminary injunction and the obligation for prior provision of evidence (providing information on the manufacturer).
The Metropolitan Appeal Court fully confirmed the preliminary injunction, however, reversed the defendant’s obligation to provide information on the manufacturer of the infringing cartridges and other data related to the number of infringing products. The court of second instance argued that such order should not be allowed either under preliminary injunction or preliminary collection of evidence. Namely, the aim of preliminary injunction (Art 156. CCP) is to provide immediate protection and relief of the plaintiff’s rights, while the aim of preliminary collection of evidence (Art. 207 CCP) is to preserve evidence in order to prevent their destruction. Preliminary collection of evidence cannot serve as a tool to circumvent the solid practice of the courts which rejects such motions of the plaintiffs in preliminary proceedings which aim to facilitate later planned damage claims.
The order of the court of second instance is final.