What Hungary Has Planned for Its Presidency of the Council of the EU

There’s a lot happening in terms of intellectual property (IP) policy in Europe at the moment. On February 28, the European Parliament backed proposals on a new framework for standard essential patents; a new regulation on geographical indications (GIs) for craft and industrial products is set to come into force next year; and long-awaited reform of design protection is on the way following a deal agreed to in December 2023.

Other significant initiatives are also likely to impact IP policy. These include the European Union Artificial Intelligence (AI) Act, which was approved by member states in February and is now being considered by the Parliament; and the Digital Services Act, which regulates online platforms and intermediaries and became fully applicable on February 17, 2024.

The presidency of the Council of the European Union plays a critical role in the smooth passage of EU legislation. The presidency rotates among EU member states every six months. From January 1 to June 30 this year, the presidency is held by Belgium; Hungary will take over from July 1 to December 31, followed by Poland.

With 27 EU member states, each country holds the presidency only once every 13-and-a-half years (Hungary last did so in 2011) and it provides a significant opportunity to set long-term priorities for the EU. There are two main tasks involved: (1) planning and chairing meetings in the Council and its preparatory bodies; and (2) representing the Council in relations with the other EU institutions, such as the European Commission and the European Parliament.

Since 2009, member states have worked together in trios to provide continuity and set long-term goals over an 18-month period. Hungary is therefore already closely involved in ongoing policies and topics, including in IP, working alongside the Belgian presidency.

Péter Lábody, Hungarian IP Office

Péter Lábody is at the heart of this work. He has been Vice President for Legal Affairs at the Hungarian IP Office since October 2021, having previously been Head of the Copyright Department. He previously worked as an attorney in law firms, as a legal expert at the Ministry of Justice, and as a researcher at the Institute of Information Society, National University of Public Service. Since April 2019, he has also been Vice Chair of the World Intellectual Property Organization (WIPO) Standing Committee on Copyright and Related Rights.

In this interview with the INTA Bulletin, Mr. Lábody discusses the preparations for the Hungarian presidency, current EU IP projects, and the importance of international cooperation.

In July 2024, Hungary will host the Presidency of the Council of the EU. What are the top IP-related priorities you aim to address during the six-month presidential term?
We’re in the preparatory phase now. We have a presidency team, and we are closely cooperating with the Ministry of Justice and other government departments, the Permanent Representation in Brussels, and with colleagues representing Hungary in the World Trademark Organization (WTO) and WIPO. Altogether, we probably have 15 to 20 people across different departments and institutions.

We will also actively engage stakeholders to identify the key questions so we can have a thorough discussion at the working-party level.

The Hungarian presidency will coincide with a new Parliament and Commission being set up, so we are not expecting any major new initiatives or dossiers. However, several are already on the table. These include the Patent Package, which has three main elements. We will focus on making significant progress there. What exactly we will focus on will depend on how much progress the Belgian presidency makes.

In trademarks, the European framework is being evaluated, so we don’t expect any initiatives there, but we will be ready for any discussion that is necessary.

In designs, the EU has just recently adopted a legislative reform which is now being implemented on the national level.

We also have a new EU Regulation on GIs for craft and industrial products. It’s being implemented by the European Union Intellectual Property Office (EUIPO), which has recently created a GI service in its Operations Department. There will be some work to do there.

In copyright, we would like to focus on a policy exchange on AI and the role of generative AI tools and their relationship with copyright policy. There are big questions here. The issue of transparency is addressed to some extent in the EU AI Act, but there are many other topics, such as authorship, possible compensation of authors for the use of their works, and how exceptions allowing the training of AI tools can be used in practice—for example, the opt-out possibilities to avoid the use of creative works by AI tools. We might look at all of that.

Beyond the EU, there are also two diplomatic conferences scheduled under the umbrella of WIPO this year, including the Diplomatic Conference to Conclude and Adopt a Design Law Treaty. That is also very much on our agenda and part of our team’s work.

What do you see as the biggest challenges and opportunities for IP policy and enforcement in the EU during Hungary’s presidency? How does Hungary plan to tackle these challenges?
We are already having discussions with the Commission and EUIPO. The Commission is planning an IP enforcement toolbox that will provide valuable information on stepping up enforcement in the member states. It’s a soft-law tool and will likely be introduced under the Belgian presidency. We want to follow up on this during the Hungarian presidency.

There is also a recommendation on combating online infringement of sports and other live events. We intend to keep this topic on our agenda. This could be a significant step in tackling online infringement and help member states to set up systems and cooperate at the European level.

On the criminal side, we are looking at certain possible steps, but this area is not harmonized within the member states.

All in all, raising awareness around IP infringement is very important. In the IP area we understand this, but we need to make high-level decision makers aware of the economic consequences of counterfeiting, including the role it plays in organized crime, its impact on employment loss, tax revenues, and the possible damage it might cause to people’s health.

For example, the EUIPO Observatory recently published a study on the impact of counterfeiting on the cosmetics, clothing, and toy industries. The results are astonishing and have already generated a lot of media interest in Hungary and other member states.

Hungary has just joined the “Authenticity” EUIPO project which aims to raise awareness and facilitate IP protection at the local level. The city of Pécs, close to the southern border of the country, has just become a certified city in February. The project includes local universities and SMEs (small and medium-sized enterprises) and famous GIs related to wines.

Finally, we will hold a public sector meeting in Budapest in mid-November on topics including the evaluation of damages caused by IP infringement. At the moment, there is no international or regional benchmark or uniformity on how to assess damages, and we intend to have some discussions on that.

How does Hungary envision its role in facilitating or enhancing international collaborations on IP matters, especially in light of global challenges such as counterfeit goods and piracy?
We have very good experience with this. It’s crucial to cooperate internally with different authorities such as the judiciary, prosecutors, customs, and consumer protection, and we would like to elevate this internationally. We really value the work of Eurojust, Europol, and other players.

We also want to explore pilot projects regionally—for example, on calculation of damages—to share best practices and link authorities together.

We continue to exchange best practices at WIPO. We’re very proud that one of the original WIPO leaders was a Hungarian—Árpád Bogsch, who led the Organization for more than 20 years—and we continue to have key players at WIPO following in his footsteps.

At the Hungarian IP Office, we have a legal and international department with about 10 people, a copyright department, and a colleague who specializes in enforcement issues. Altogether, about 10 people are dealing with policy questions and we also cooperate closely with the Ministry of Justice.

It is very important that our team participates in raising awareness about IP in schools and universities and preparing educational materials. I know that this is something that INTA also places a high priority on given its Unreal Campaign.

With the EU recently passing the AI Act, the intersection of AI and IP will continue to be a hot topic. What are your plans to address AI-related challenges over the course of the presidential term?
It’s important to point out that it’s up to the Commission to put legislative dossiers on the table, but as the Presidency [of the Council of the EU], we, together with the member states, can help point the way. We will hold a Presidency conference on October 1–2, 2024, where the main theme will most probably be AI and its relationship with IP. We don’t have the final program yet, but I think we will look at issues including copyright and designs. On the latter, there are lots of questions, such as how to keep novelty if thousands of new designs can be created by AI in milliseconds.

Another interesting topic is the use of AI tools by IP offices—for example, in novelty searches or customer services. We could have European projects on chatbots, blockchain registries for IP, etc., so those could also be important topics.

Of course, we need to be careful in how we develop these tools. There may be risks with data protection and data security. I’m pleased to see certain developments at the European level, and if we can share who is doing what, that will save money and reduce complications. Bigger players, such as the European Patent Office and EUIPO, are investing and that could lead to common platforms that also take member states’ views into consideration. It’s important that we don’t duplicate work or create incompatible systems.

The EUIPO is also now developing its Strategic Plan for 2025 and it would be great to see some of these issues addressed as part of that.

SMEs are crucial for the EU’s economy. What measures will Hungary advocate for to support SMEs in leveraging their IP assets for growth and innovation?
This is a very important stakeholder group. They are the backbone of the EU economy. When it comes to how they use IP, however, the numbers are not very encouraging. Research has found that on average, 7 to 8 percent of SMEs use IP protection, but for Hungary it’s almost half that number, so we need to tackle this.

We try to do that in different ways. We try to provide free services to SMEs, including diagnostic services on the IP possibilities they have. There is also legislation in Hungary providing fee reductions, including 15 percent reductions for electronic applications and a 75 percent discount on patent applications for universities and SMEs.

It’s also important not to treat SMEs all the same. We need to do a better job of focusing on different industries and target groups. It can be hard to explain to some groups why IP protection is important, so providing relevant examples is very useful. We would love to see INTA produce information, data, or leaflets targeted at specific industry groups.

Finally, based on your extensive experience in both legal and international affairs, as well as innovation, what personal insights can you share about the evolving nature of IP protection and its significance for fostering creativity and economic development in the EU?
I think we need to bring IP closer to people and make it more accessible. Some people see IP as expensive, difficult, and not relevant to them, so we need to help them understand what IP can do for them.

There has been a big shift from physical to intangible assets and we need to raise awareness of valuation, including the role played by taxes, financing, and accounting. It’s also important to connect universities with business. Of course, we are on the cusp of big changes with AI, but we should not overlook the value of communicating with people at the individual level about the value of IP and make them understand why it’s important for them.

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