Sustainability and Intellectual Property in Hungary

Abstract

Generally, IP rights as legal instruments intend to encourage and foster innovation and creativity, as well as to safeguard values worth preserving. IP rights as intangible assets facilitate social and economic growth and are essential to fair competition. While these instruments grant exclusive rights, they are likewise subject to a number of limitations aimed at achieving the right balance between public interest and the interests of the rightsholders.

1 Introduction

Generally, IP rights as legal instruments intend to encourage and foster innovation and creativity, as well as to safeguard values worth preserving. IP rights as intangible assets facilitate social and economic growth and are essential to fair competition. While these instruments grant exclusive rights, they are likewise subject to a number of limitations aimed at achieving the right balance between public interest and the interests of the rightsholders.

Abovementioned are the basic objectives of IP rights, however, since their foundations many economic and social challenges triggered the need for the review and adaptation of their legal framework. Achieving sustainability, as one of the most pressing problems today, inevitably desires the toolkit of IP rights, thereby entailing their reconsideration and targeted improvement along with the possibility of introducing new types of protections.

How rightsholders use the opportunities granted to them is also an important aspect of the relationship between IP rights and sustainability. It makes sense that rightsholders and users who are willing to license green and sustainable inventions, as well as copyright owners who do not fully retain their exclusive rights, make a better contribution to sustainability. Whereas, for instance, in the case of trademarks, rightsholders who are misusing ‘green’ and ‘sustainable’ labels, thereby committing greenwashing and misleading consumers, undermine sustainability efforts of committed entities.

It should also be mentioned, that to achieve sustainability in an environmental, social and economic sense as well, we must reconsider our premises on the functioning of our society and the constant chase for economic growth. This brings with itself the necessity to revisit the balance that has been struck between the private interest to protect of IP rights and the public interest of access and dissemination, especially in relation to technology transfers to developing and underdeveloped countries.

In this chapter, we first look at individual IP rights, what roles they play in achieving sustainability, whether it is successful or not, and how their regulation should change in face of the current global challenges with a particular regard to Hungarian regulations. In the second part of this chapter, we outline the approach of the general Hungarian IP regulation towards sustainability, how it progresses, and in which aspects we believe it should be altered.

2 Sustainability Considerations of Individual IP Rights

2.1 Current Regulatory Standpoint

Patents are indispensable legal instruments for technological progress and socio-economic development based on innovation. In the context of sustainability, it plays an important role in all its three pillars¹—it contributes to economic development as a highly valuable competitive tool, it helps achieving vital societal objectives by enhancing crucial solutions in the pharmaceutical and food industry, while in the form of ‘green innovations’, it stimulates among others climate change mitigation and resource-saving technologies thus promoting environmental protection and sustainable development.

One of the main objectives of sustainability is reducing the gap between developed and developing countries.² Patents both hinder and promote these efforts—patent protection indeed stimulates innovation in healthcare and pharmaceutical products, but only where it is accompanied by sufficient financial and human resources. In developing countries, however, patents eventually can cause an increase in prices.

It is undoubted that patents are crucial incentives in the field of biotechnology, which contributes to the treatment of epidemics, formerly incurable and orphan diseases, as well as to the development of new medicines and enhancing effectiveness of the ones already available. Furthermore, among other aspects, patented biotechnology plays a role in agriculture by plants becoming increasingly adaptable to the environment, thus increasing food safety.³

Since innovation and new technologies are relevant factors in sustainability, patents fundamentally play a positive role in achieving it. Nonetheless, fast paced economic and technological development promoted by the exclusive exploitation rights deriving from patents can likewise have an adverse effect on both society and the environment by significantly increasing the humanity’s ecological footprint, thereby (already) reaching the state of over-consumption.

The law may further sustainability in patent protection by regulating the extension of protection, granting teaching and research exceptions with regard to sustainability and benefits and incentives furthering patent protection for environmentally friendly inventions.

Copyright fosters creativity by allowing authors to gain recognition and financial compensation for their work, which contributes to innovations in the field of sustainability by granting access to scientific publications through which research and essential data are made available for new discoveries, while also supporting education and teaching by providing certain exceptions and limitations under copyright protection. While reusing copyrighted works is restricted by the exclusive rights of authors, there are examples for surrendering full copyright protection, such as Creative Commons licensing⁴ of works, which helps users finding and reusing works and therefore contributing to research and development.

Copyright protection of software in the field of green technology can play a crucial role in collecting and analysing relevant data, which could be used for improving existing technologies in a greener or sustainable way.

Trademarks can help consumers identify companies committed to sustainability and environmentally friendly solutions. This goal can be realised both by having a trademark referring to sustainability in a distinctive way or by acquiring one that is identified with goods and/or services of sustainable nature.

The use of collective and certification mark registered for designations related to sustainability likewise play an important role in communicating characteristics.

Trademarks, however, are neutral to sustainability, as trademark registration and maintenance are not subject to any criteria which reflect sustainability or environmentally friendly preconditions. Therefore, trademarks are useful in commercially identifying other IPs, such as green innovations on the market.

Industrial Designs can provide protection for the outer appearance of ‘green’ products or their parts. While an outer appearance merely determined by technical features is excluded from protection, designs serving a technical purpose, and at the same conveying a certain degree of designing freedom are not. For example, certain products or their parts which in their technical function have green or sustainable effects can be subject to design protection for their exterior.

Design rights are subject to a more time and cost-effective procedure than patents, but likewise can contribute to the protection of green and sustainable technologies in accordance with their legal requirements.

Geographical Indications (GI) as identifiers of products manufactured based on valuable local knowledge linked to a specific environment play a significant role in social sustainability by preserving the cultural heritage of traditional production methods developed over decades or even centuries on a given territory. GIs are linked with guaranteed quality based on the geographical place of production and strict compliance with production standards.⁵

GIs have a positive role in sustainability, as they are promoters of preserving local knowledge and identity, which is of primary importance in sustaining diversity and achieving healthy balance between the protection and utilisation of the natural environment.

Plant variety protection supports food safety objectives by the development of new variants more adaptable to the environment. As the world population is expected to grow continuously until the year 2100, while global climate change is getting worse by the day, having plant variants that provide better yields, are climate resilient and allow for the decrease in pesticides usage could prove to be an excellent instrument for humanity.

It is important to remember, though, that the development of new plant variants is often performed by large corporations in the developed world, while food security problems are (yet) more of a problem in the global South. Although more of a policy concern, striking the healthy balance between rewarding innovation with protection and profit, and disseminating the new, resilient plant varieties to countries where they are desperately needed at an affordable price is key to achieve social sustainability on a global level.⁶

Trade secrets as alternatives to IP rights are valuable business assets. Entities which develop and apply sustainable procedures, methods, practices or have such inventions that could be subjects to the acquisition of patent rights can rely on trade secret protection regarding these confidential and sensitive information. Although trade secret protection enables companies to develop best practices, solutions, and the collection of valuable data, it eventually involves withholding essential information for transitioning to more sustainable ways. In our view, trade secrets should have the role to incentivise developing sustainable best practises and collecting valuable data, which then could serve sustainable objectives after having been licensed.

2.2 Necessary Changes for a Sustainable IP Regime

Patents should maximise incentives to bring out the most potential in making existing technologies greener and more sustainable, and inventing new (green and sustainable) ones. A well-developed patent system should help companies to exploit their inventions, while ensuring that they serve the economy and society at large. It is crucial that innovators and businesses (especially SMEs) are provided information on the different types of IP rights available, the nature of the protection, and the different criteria which should be fulfilled for the rights to be registered/acknowledged and thereby enforced. The Hungarian Intellectual Property Office (HIPO) should prepare and make available such informational materials and brochures and hold seminars and workshops on the proper identification and management of IP rights, as well as creating IP strategies, in the course of which practical information related to green and sustainable IP should be specifically provided.

The patent system should enable the use of patented technologies for research purposes to a justified extent based on the Bolar exemption,⁷ which would facilitate more rapid development of pharmaceutical products, as well as the invention of sustainable and greener technologies by reusing knowledge from existing ones. Research institutes, universities, science and technology parks should be promoted and facilitated to carry out innovation and development related to green and sustainable technologies. In this regard, the implementation of IP policies would be necessary, as well as the provision of extensive knowledge on IP protection tools. Target areas where sustainable and green innovations are strategically needed should be centrally identified to these institutions, the realisation of which could be publicly funded. At the same time, green and sustainable R&D activities of companies should be incentivised in the form of tax deduction, and strategic IP advice should be provided, which should also involve assistance in valorisation of these assets.

Patents should serve the spread of new inventions by proper technology transfer and licensing mechanisms in place—easy licensing of sustainable technologies should be available with reasonable benefits to rightsholders. To achieve circular economy, cross-industry licencing should be promoted, where the different market players would eventually work together on more innovative solutions.⁸

For that purpose, a ‘green marketplace’ should be set up to facilitate both domestic and international technology transfer between innovators and businesses seeking green and sustainable technologies. On such a platform, a searchable database of innovations and their rightsholders, as well as the potential user companies should be provided. The licensing of the technologies offered could be simplified by the provision of standardised licensing terms the parties could opt for. The royalty from licensing of green innovations could be subject to tax deduction. Moreover, apart from the licensing of already developed technologies, the platform could serve as a hub for connecting businesses having sustainable technology needs and innovators with compatible ideas of solutions, in the framework of which partnerships for the realisation of essential green technologies could be formed and supported.

Patentability conditions should involve the exclusion of inventions having a harmful effect on the environment or human, animal and plant life and health, the fulfilment of which conditions should be properly examined and enforced by IPOs. The patent system is originally technology-neutral—environmentally friendly and harmful inventions can be both subjects to patentability, however, Article 27 (2) of TRIPS mentions exclusion of inventions having an adverse environmental in the form of an exemplary list: ‘Members may exclude from patentability inventions, the prevention within their territory of the commercial exploitation of which is necessary to protect public order or morality, including to protect human, animal or plant life or health or to avoid serious prejudice to the environment, provided that such exclusion is not made merely because the exploitation is prohibited by their law’.

Although currently the Hungarian Patent Act provides that inventions shall be considered unpatentable where their commercial exploitation would be contrary to public order or morality⁹, there is no specific reference to the exclusion of inventions which could pose a serious harm to life and the environment itself. It is not excluded that environmental effects should be part of the assessment, as under the existing provisions patent examiners can assess these aspects, but—contrary to the provisions of TRIPS—currently these are not mentioned in the exemplary list of non-patentable inventions.

Building from international examples, in 2015 the HIPO started a ‘green patent’ qualification programme, the aim of which is to incentivise applications that have the potential to develop solutions to achieve sustainability. When submitting a patent application, the HIPO checks whether the invention belongs to a pre-determined category of ‘green’ technologies, in which case it puts the application on a fast track and rewards the inventor with a relatively quick application procedure.¹⁰ Unfortunately, the programme did not live up to its expectations, neither in Hungary, nor in any other country: only a fraction of all patent applications gets into the green patent fast track programme.

Copyright regulatory framework should be able to create a reasonable balance between the interests of the rightsholders and the public, who would benefit from the access to copyright protected works in education, research and in the acquisition of professional knowledge.

Copyright should be a tool in achieving social sustainability by assisting in social inclusion and granting equal opportunities. In this regard, education is of fundamental importance, to which copyright could contribute by providing access to information one would need for their personal development and well-being. Therefore, copyright should have a role in maximising creativity by granting exclusive right to creators, as well as including exceptions and limitations to education, research, and personal use.

In addition to tackling social inequalities, fair access to copyrighted materials is likewise important to have skilled professionals who could have the knowledge and potential of creating future innovations. Increase in the average minimum level of education and having qualified professionals is the enabler of development—professionals should have the most up-to-date knowledge possible, which would be hindered by copyright regulation of restrictive nature. If access is costly or even impossible, little knowledge is available from primary sources.

Social sustainability goals such as education for all, up to date knowledge for professionals, as well as research to support scientific works and development could be greatly supported by broad statutory free use exception of education and research, and means to rightsholders to share and thereby authorise use of their copyright protected works contributing to social, environmental, medical, etc. studies as granting free access and reuse of related scientific research data and findings, which could be enabled by public funding and sponsorships.

Copyright should likewise be a flexible tool to contents made available online. Digital materials are essential to online learning and research, as well as the possibility of sharing and accessing digital contents of libraries and archives. In case of the latter, digitalisation helps preserving works for future generations.

Copyright regarding green innovations should contribute by solid regulations on software protection. First, green software supports sustainability in minimising the environmental impact of technologies and is aiming at energy efficiency.¹¹ Moreover, software as part of technologies can contribute by collecting and analysing data, which could help improvement of efficiency, emission, resource allocation, etc. inter alia in the field of manufacturing, agriculture, construction. Sui generis database protection should likewise have a role in the use and diffusion of data collected and systematised to identify the need for further green and sustainable improvements and to help their realisation by further innovations. Database protection incentivises obtaining, verifying and presenting data which could be beneficial to industries in transitioning to greener technologies.

The development, use and licensing of green software should be promoted by incentives, such as tax deduction from the royalty, and providing subsidies and tenders to companies for the acquisition of green software. Similarly to the green patent marketplace, there could be a database for connecting developers and potential users of software supporting green technologies and objectives, e.g. analytics of emission, energy efficiency. In this regard, there should be openness to discuss whether copyright framework should be adapted in the view of new technologies, as artificial intelligence, Internet of Things, which could likewise play an important role in businesses sustainability goals and successful green transition.

One could also make an argument that if we aimed at achieving social sustainability and decreasing the wealth gap in society, revisiting the current term of copyright protection could be a useful instrument, as in the last decades private interests have dominated the development of copyright. While it is important to maintain the incentive for creativity, the present regulations that offer protection decades postmortem auctoris do nothing to incentivise creative authors, rather they provide a powerful tool for rightsholders, especially large corporations keep hold of their accumulated intangible wealth. Reducing the term of protection to a fix period so that works may become public domain and differentiating between the term given to individuals and legal persons could be a way to go.

Trademarks should contribute to sustainability goals by raising consumer awareness and helping consumers identify entities which are committed to green and sustainable ways. Certification and collective marks should also be assets to distinguish companies, products and services which serve sustainable objectives.

The registration of collective and certification marks referring to sustainability should be subjects to a discounted registration fee. Moreover, the crucial role they could play in sustainability should be communicated by HIPO, especially in the view of certification marks of sustainable fabrics and materials which could contribute to achieving a more sustainable fashion industry.

However, trademarks that falsely refer to ‘green’, ‘eco’, ‘sustainable’, etc. goods and services, aka greenwashing, should be subject to cancellation by a third party on the grounds of deceiving consumers. It is not feasible to assess such intentions during examination, however, there should be a mechanism to identify greenwashing trademarks after they are registered. Consumer protection authorities could regularly observe—either ex officio or by notice—trademarks of rightsholders whose activities do not reflect the sustainable and green characteristics or efforts their trademark display. Consumer protection authorities should also facilitate to file a cancellation action against a trademark the use of which would thus deceive consumers.

Industrial Designs as ‘design patents’ should be assets to sustainability by protecting the design of green and sustainable technologies fulfilling registrability conditions, in a more time- and cost-effective way.

In respect of design rights, information on the scope of protection should be made available to businesses having an interest in the registrability of green and sustainable product appearance. Green designs are often in connection with the texture and/or materials of products, as they feature recycled, natural, environmentally friendly materials. Displaying such materials in the application could be challenging, as examiners should be able to determine the subject of the application, as well as novelty and individual character being preconditions of protection. To enable the design protection of green and sustainable texture and material, HIPO should support businesses by providing practical manuals on the display of designs acceptable and information on the relevant criteria taken into consideration regarding the registration of green and sustainable designs. Design application system should adopt to the easy display and facilitation of green and sustainable designs, which could be defined by new tendencies, e.g. 3D printed objects.

Easy and cost-effective acquisition of design rights would play a significant role in achieving a sustainable fashion industry—it incentivises the use of sustainable fabric and materials, and by the enforcement of exclusive rights it contributes to the fight against counterfeit products and fast fashion businesses, which contribute greatly to increasing humanity’s ecological footprint.

It should also promote circular economy by protecting the design of easy-assembly or disassembly goods, as well as their spare parts which could enhance lifespan of products as enabling their reparation. Likewise, goods and their packaging which are reusable and are made of recycled, eco-friendly or natural materials should be subjects to design protection.

In fashion industry, designs should play a crucial role in tackling fast fashion copycats, as well as counterfeit products. Those are often linked with socially and environmentally harmful manufacturing practices and serious overconsumption, and the seizure and destruction of the latter involves environmentally detrimental procedures hindering sustainability objectives.¹²

Geographical Indications (GI) should preserve local production/manufacturing methods and practices well developed over time. The different entities whose product is subject to GI protection are serving social sustainability objectives by supplying the domestic and international community with high-quality products and creating jobs for local people.

GIs also assist in preserving the natural environment which is crucial to environmental sustainability—maintaining the resources and productive capacity of the land is important for farmers and producers, which in turn likewise serves the interests of future generations.

To better support social sustainability goals, however, besides food, agricultural products, wines and beverages, emphasis should also be put on the protection of non-agricultural products of local manufacturers. These products represent high quality and durability and they usually are subjects to sustainable production methods. HIPO and other IPOs as well should raise wider awareness of the possibility of the GI protection of non-agricultural products—from cutlery to clothes and footwear, local skills and know-how on their production represents a great value and their recognition and preservation should be promoted.

Plant variety protection should have the role of enhancing food security by promoting the development and dissemination of plants more adopted to the environmental adversity of climate change, as well as reducing the environmental impact of agriculture.¹³

To achieve seed diversity adapted to the adverse effects of climate change, there should be economic incentives for the development of new and improved climate-proof plant varieties. HIPO and other government institutions could offer valuable aid to Hungarian researchers and enterprises in the agricultural sector for the protection and dissemination of new varieties, primarily via consultations and helping them find partners whom they can cooperate with internationally. Worldwide initiatives, primarily involving national governments, regional cooperations and UN institutions, such as the FAO, should be drafted and executed to disseminate the newly developed plant varieties to countries where they are actually needed. We should also pay attention to provide the new varieties to farmers at a price they can afford and not to prohibit them to reuse the seeds from the previous year’s crop.

2.3 Further Rights To Be Adopted

The protection of traditional knowledge and traditional cultural expressions of local communities should be considered both on a national and regional level. As time goes by, there are fewer and fewer people actively using traditional knowledge for agricultural, economical, or even medical purposes. Preserving the know-how, skills and practices of local people would contribute to biodiversity, the protection, restoration, and sustainable use of nature, which could improve the quality of life of local communities and of society itself. Protection of traditional cultural knowledge, such as music, ceremonies, dance, handicraft, and other expressions of folklore contribute to cultural diversity and preserving local identity, which is an essential factor of achieving social sustainability.¹⁴

While some of these values could be protected by traditional IP rights, such as GI, there are many of them that are worth preserving but would otherwise fall out of the scope of the existing IP rights. Exclusive rights should serve the community itself by incentivising and assisting them to maintain their valuable traditions, as well as these particular know-hows, methods and practises should be collected in searchable databases to be well-preserved for future generations.

Genetic resources, especially those originating from developing and underdeveloped countries, and indigenous communities should also be given protection to prevent exploitation from economically more powerful actors, and to avoid that those who have discovered them and been using them for generations would be locked out of utilisation. This new type of protection should be a negative one: genetic resources are primarily heritage of the local community and of humanity at large, hence no one should receive exclusive rights for them.¹⁵

Artificial intelligence is still a source of many headaches for legal professionals and legislators alike, and the field of IP is no exception to that. It is still unclear whether the algorithms themselves should be covered by copyrights or patents, while the outputs of the AI can only be categorised as trade secrets at the moment.¹⁶ There are a number of problems with the current solution, not least the fact that AI algorithms often make decisions about our daily lives, and they are going to have even more influence on us in the future, yet we do not know the process of they operate and come up with their decisions. A patent application process, for example, would aid us a lot in understanding AI and its implications on our lives.

From the point of sustainability, however, an even more pressing matter is the fact that since AI systems and their solutions are more often than not categorised as trade secrets, they are nearly impossible to be utilised throughout the world, as it would constitute a grave financial misstep to give up on a trade secret from a company’s point of view. The AI could be a rather powerful instrument for humanity to combat issues from climate change to social inequality, as they can provide us with possibilities on a previously unimaginable scale. To achieve this, it is necessary to incentivise dissemination of AI systems by offering protection via IP rights. This could be done by creating a sui generis right for AI, that would encompass the algorithm itself and its outputs, or by widening the scope of patents, to include both categories. It is also important to strike a balance between the extension of the protection and the need not to strangle new developments by abusing the newfound rights.

While modifications to the current IP regime could start on a national-regional level regarding AI-related IP rights, the foreseeable impact and benefit of the AI in connection with sustainability may prove desirable enough so that national legislators commence the work in an international environment in the first place.

3 IP Framework in Hungary

As a preliminary remark (and perhaps as an early conclusion) to this section, it can be stated that the Hungarian legislation, and by extent the Hungarian Intellectual Property Office (‘Szellemi Tulajdon Nemzeti Hivatala’, ‘HIPO’), still has some room for improvement concerning the sustainability-related considerations of IP rights and their regulations. If nothing else, the fact that while HIPO issues an annual report on the current state of IP rights in Hungary, it does not contain any reference to sustainability aspects of these rights.¹⁷

As previously presented, following international examples, there exists a fast-track ‘green patent’ procedure in HIPO, but on one hand, it is barely utilised by market actors, and on the other, HIPO does not advertise the possibility at all. The option itself is of good intention, but in its current form it does not serve its purpose, incentivising and aiding the development of ‘green’ solutions, very well. It would be worth reconfiguring the programme by catching the attention of innovators via media campaigns and by offering financial incentives: tax deduction, reduced procedural fee or direct funding, especially for SMEs could prove fruitful. However, in the current form, the procedure is of very little meaning.

As far as the incentivisation of research, development and innovation is concerned, there are a number of tenders available for SMEs, universities, and businesses overall from EU and domestic funds—such as the National Research, Development and Innovation Fund (NRDIF). Some of these tenders were/are especially dedicated to sustainable innovations, e.g. the funding schemes of Horizon Europa programme, however, the majority are promoting general R&D activities. NRDIF likewise offers funds to natural persons and businesses for the registration, maintenance and valuation of IP rights.

In this regard, HIPO provides an R&D qualification procedure, in the framework of which it assesses whether specific projects of businesses qualify as research and development, the positive outcome of which would constitute as the basis of eligibility for tax incentives and fundings.¹⁸ Moreover, HIPO offers free consultation to small and medium-sized enterprises with tailored guidance on how they can consciously manage their intellectual property.

Apart from consultation, raising awareness of SMEs on the importance of developing and protecting their intellectual property, is a possibility that can be performed with limited financial and operative investment, but can yield great results. Understanding of IP, its benefits and procedures is not really widespread in Hungary, even in the entrepreneurial sphere, while on the other hand, many sustainable developments come from start-ups and SMEs. Programmes for these actors are already up and running, which is excellent, but more emphasis should be put on improving the IP-consciousness of those who are just starting out in setting up a business.

Innovation—be it scientific or more business orientated—is promoted through both project-based and more general or strategic funds, which could contribute to sustainability. As these innovations qualify as intellectual property and most likely are/will become subjects to IP rights, it can be concluded that these incentives contribute to IP’s role in sustainability. Nevertheless, as there are a negligible number of incentivisation schemes offered directly to the acquisition, maintenance, valuation of green IP rights, this role should be further improved.

Another important consideration of IP regulations is enforcement of the rights that rightsholders already possess. Having enforceable exclusive rights deriving from a patented technology is the driving force of innovation. Nevertheless, for the diffusion of green technology, pharmaceutical and biotechnology-based products, so for the good of the industrial, societal, economic and environmental transition to sustainability, licensing is an essential instrument and should be highly promoted. It should therefore be facilitated that the balance between the interest of rightsholders and the interest of public is achieved. Voluntary licensing should be promoted and governed by non-discrimination. Sustainable and green technology can serve public objectives if it is transferred in and across industries which could implement these technologies and develop new and advanced ones.

Proper enforcement of copyright, trademarks and designs against counterfeit products would contribute to all three aspects of sustainability. It has an adverse impact on market sales and employment, as well as it has a negative effect on the environment, let alone posing health and safety issues to consumers. Public enforcement authorities should be well-equipped—and should be in communication with rightsholders—to tackle the import and offering for sale of such goods.

IP enforcement efforts against counterfeit and infringing products, which could pose serious health risks to consumers and are harmful to all three pillars of sustainability, are supported by the work of the National Board for Counterfeit in Hungary (‘Hamisítás Elleni Nemzeti Testület’, ‘HENT’). HENT is responsible for drafting and enforcing the national strategy and action plans against counterfeiting in coordination with law enforcement authorities, in the course of which they are organising awareness-raising and information campaigns and training, as well as preparing amendments regarding IP enforcement legislation.

While the board’s objectives do support IP rights in their role of promoting sustainability, the reports of HENT on the current situation in the fight against counterfeiting show that there is still room for improvement, e.g. regarding the citizens’ awareness on the infringing nature of these products and the risks they might pose.¹⁹ Moreover, cooperation and data sharing between rightsholders and law enforcement authorities could still be enhanced, and the introduction of new technologies that can help detect infringements or assist authorities in other ways should be likewise promoted.

It should also be noted that destruction of counterfeit products seized by law enforcement authorities could be highly pollutant, as it sometimes involves incineration of the goods. It should therefore be examined how developing more sustainable practices in this context could be realised. For example, rightsholders should be incentivised to compromise and, once the product has been de-infringed, to offer the products for charitable purposes. Furthermore, recycling should also be considered—it should be properly executed in the framework of a dedicated process, by certified entities which guarantee that infringing products do not re-enter the market.

Apart from other IP rights, GIs are never subjects to licensing, as they are connected to a particular territorial origin and a product specification—producers who do not fulfil these conditions should not be able to use the GI. Enforcement of GIs against infringing third-party use is highly important and should be well-facilitated by authorities and courts, as—in addition to a well-functioning control system—it contributes to assuring the proper qualities and characteristics the registered GI should own. Given that GIs can have many rightsholders at the same time, it is difficult for them to act in a timely and effective manner in case of an infringement, let alone in many cases they are not aware of their rights regarding enforcement. Therefore, rightsholders of a GI should be properly informed and facilitated—even by public funds and incentives—to act not only to obtain a GI but also to monitor a market and take enforcement actions.

4 How We Would Amend the Hungarian IP Framework

All IP rights currently available in Hungary support the role of sustainability in a way that they promote innovation, development, preservation, and diversity which are the core factors of sustainability. However, there are certain aspects which should still be improved in order for these rights to better contribute to sustainability goals.

First, awareness should be raised on how different IP rights can contribute to sustainability objectives and why it is crucial that these are properly identified, registered (if applicable) and maintained. In this regard, HIPO should publish informational materials, studies and reports to demonstrate how intellectual property is currently affecting sustainability—e.g. the volume of green patents or designs registered—and in what way this role could be enhanced. Together with other actors, such as the Chamber of Commerce or the competent ministry, HIPO should also focus on educating entrepreneurs from SMEs and the start-up sphere, especially those who are just starting out, to raise their awareness on IP rights and sustainable solutions.

Second, acquisition of IP rights which are identified as having sustainable or green characteristics and effects, should be made easier by reduction of official fees and/or enhancing the already existing fast track procedures. The latter could be essential in case of pharmaceutical products and biotechnology to facilitate a quicker market entry. Regarding green designs and trademarks, especially certification and collective marks, maintenance should be subject to reduced maintenance fees.

Incentivisation of creating intellectual property which has a role in achieving sustainability goals should be further improved via funding schemes. These programs—in addition to boosting inventiveness—would raise awareness of and promote the necessity of creating more sustainable solutions.

Although it would go beyond national borders, authorities and legislators should commence working on the development of AI-related IP rights to provide the opportunity for AI systems and sustainable solutions developed by the AI to disseminate around the globe as soon as possible.

As mentioned in Sect. 16.2.2, there should be a searchable database of green intellectual property rights and a platform operated for the purpose of connecting inventors/rightsholders and businesses which intend to license these rights. Moreover, it could serve as a platform to seek partnerships for the realisation of green and sustainable projects.

Furthermore, for sustainability reasons, the law should make it easier to expand the public domain with copyrighted works. Accordingly, the copyright owner should be permitted to voluntarily abandon his/her copyright prior to the expiration of the work’s copyright term and thereby the work could become part of the public domain. This opportunity is not given yet under Hungarian laws.

Overall, sustainability objectives require international cooperation, as they are a globally pressing issue. With regard to the improvement of the IP system to better support sustainability goals, a unified EU-level approach and coordination would be ideal, although most of the advancements mentioned earlier could be achieved at a national level.

Sustainable solutions require simple, economical procedures and a territorially far-reaching protection, which is why the European Unitary Patent is a great step towards achieving sustainability. As of completing this chapter, Hungary has not yet ratified the UPC Agreement. We can only hope that Hungary follows other EU Member States’ example and ratifies the agreement as soon as possible.

We consider that the role of IP rights in sustainability is better promoted through incentives and benefits, with a more practical approach, as well as lower-level legislation, rather than through international treaties. There is, however, need for new sui generis forms of IP rights when discussing sustainable development: cultural heritage, traditional knowledge and genetical resources cannot be protected well enough under the current IP regime, and these subject matters should have their place in the relevant international IP framework. Moreover, it would usually be in the interest of developing or underdeveloped countries to create new forms of protection for them, thus it would be preferred to get it done in a multilateral arrangement.

5 Conclusion

As we established in this chapter, sustainability considerations play a significant role regarding IP rights, as they are legal tools for promoting the creation of and preserving valuable assets which could be put at the service of achieving sustainability. On the other hand, while IP rights are an excellent instrument, that incentivise development, it could also very well hinder it, if the legislation we enact degrade them to a simple tool for private interests. Should we truly wish to achieve a sustainable future, the current IP regime has to be revisited and we must strike a balance between private and public interests once again.