The number of patents applied for in Hungary has been falling over the past two years, according to the Hungarian Patent Office (MSzH). Last year, there were 2657 applications in Hungary, 2153 fewer than the year before.

The number of applications lodged by Hungarians over the past five years has been relatively stable (700-800 a year), whilst the number of foreign applications has fallen in recent years. The MSzH says that this is the result of signing the European Patent Agreement on January 1, 2003. Since that date, patent holders have not needed to make a direct application – it is enough simply to designate Hungary as one of the jurisdictions covered by their European patent.

Most patents in Hungary are registered by Americans and Germans. This is in line with global trends. More than 40% of applications in 2004 came from the drugs and biotechnology industries, with 73% of applications relating to five fields: drugs, biotechnology, components, tools, chemicals and metal products.

Competing with rich multinationals to acquire patent protection is an expensive proposition for Hungarian small businesses, according to MSzH staff. Applying for and maintaining a patent in the first year alone can cost as much as HUF130,000. For this reason, the Patent Office offers discounts on the application and maintenance fees under certain circumstances – for example, if the inventor applies on his own behalf.

Companies often only realise the importance of protecting their intellectual property when a competitor nicks their unprotected idea. "They often have no idea what kind of treasure they have in their hands," according to Lilla Kaszala of the Budapest Chamber of Commerce and Industry (BKIK).