Hungary: Copyright Act Amendment – New software rules

The Hungarian Parliament recently adopted an amendment to the Copyright Act which has not yet been signed by the President. When it enters into force on 1 June 2021, the amendment will bring changes to software law. 

Written form requirement partially abandoned

According to the rules in effect now, software license agreements must be in written form unless the software is licensed in the ordinary course of trade (“out of the box”). 

After the effective date of the amendment, software license agreements granting non-exclusive license rights to a licensee will generally be valid without written form. This is good news for the parties to non-exclusive software development agreements since they can conclude a license agreement – for a non-exclusive license – without any formal criteria. 

The new provisions also simplify the transfer of the economic rights to software, with a result equivalent to an exclusive, unlimited license. It is unclear if a transfer of the economic rights to software must be in writing.

Bestseller clause no longer applicable to software development

Most of the general licensing rules in effect now are applicable to software. The new rules exclude the applicability of the legal provision on an author’s right to proportional remuneration (bestseller clause) and also the possibility of judicial modification of a contract in case of non-proportionality of remuneration.

No option for mediation 

The mediation procedure available for other situations will not be applied in case of disputes arising from software license agreements.