Intellectual property

Background

One of the issues most commonly raised by foreign Clients and colleagues abroad is the question of whether unregistered trademark rights can be protected in Turkey. While there are numerous ways to obtain similar results through efficient strategizing, asset management, and litigation; the suggested and most cost-effective method of doing so is through effective use of the rights mentioned in the Industrial Property Code (“IPC”). As is often the case, direct use of established legislation and case law is crucial to achieve optimal results through minimal cost and delay in such cases.

The legal framework for industrial property rights concerning trademarks -along with those associated with patents, utility models, industrial designs, integrated circuit topographies, and geographical indications- is set forth and detailed in the IPC and associated secondary legislation. While the IPC covers the general outlines of most trademark-related issues, extensive knowledge of related legislation, case law, and recent applications is essential when attempting to protect or enforce rights related to unregistered trademarks in Turkey.

The primary legal bases for protection of unregistered trademarks are established in Article 6 of the IPC which determines the scope of relative grounds of refusal for trademark applications. The same legal grounds are then referenced in subsequent articles of the IPC to serve as the legal basis for claims of trademark invalidation and/or infringement. Only a few of these legal grounds may be used by unregistered trademark owners in Turkey and the use thereof requires a precise legal understanding because the implementation of the related legislation is more irregular than the ones based on registered trademarks.

Legal Grounds for Protection of Unregistered Trademarks

Article 6 of the IPC establishes the relative grounds for refusal of a trademark application and the provisions that are more useful for unregistered trademarks owners are as follows:

• Prior right ownership through genuine use as established in Article 6/3 of the IPC,
• Protection of a well-known trademark registered abroad as per Article 6/4 of the IPC and the Paris Convention for the Protection of Industrial Property (“Paris Convention”),
• Protection of name, trade name, copyright or other intellectual property rights as per Article 6/6 of the IPC,
• Refusal of a trademark application filed in bad faith as per Article 6/9 of the IPC,
• Unfair competition claims as per the provisions of the Turkish Commercial Code (“TCC”)

1. Prior right ownership (Article 6/3 of the IPC)

Article 6/3 of the IPC states that:

“If a right to a non-registered trademark or to another sign used in the course of trade was acquired prior to the date of application or the date of the priority claimed for the application for registration of a trademark, the trademark application shall be refused upon opposition of the proprietor of that prior sign.”

Use of this legal ground is suggested for Clients who have been fairly commercially active in Turkey since the standard of proof of use of the trademark is high in such cases. Trademarks may be subject to protection under this provision in the event that;

• There is serious and genuine use of the mark in Turkey which predates the application/priority date of the opposed trademark application,
• The use is commercially significant and is sufficient to make the trademark known to relevant consumers, if not to the degree sought in well-known trademark protection,
• The use and the effects thereof are focused on Turkey to avoid potential issues based on the principle of territoriality.

In short, this provision serves to prioritize the rights of the party that created, made the trademark distinctive and known in Turkey through genuine use over the rights of the party that has only acted first in filing an application. It is worth noting that the clarity and uniqueness of a trademark in the registry are still a matter of consideration for Turkish courts and the Turkish Patent and Trademark Office (“TPTO”), therefore Clients are not advised to file for a trademark application based on genuine right ownership claims to defend themselves while the same mark is already registered on behalf of another party. Instead, they should consult a legal expert on their options surrounding invalidation or revocation of the prior registered mark first.

While the burden of proof can differ from case to case, as a matter of general principle it is expected that the genuine right owner makes use of the trademark in a commercially significant manner. These standards are flexible depending on the conditions of each case but it is important to note that a degree of consistency in sales, high volume/value of sales, and use of the trademark directly by the party making the claim or through a license are often sought, even if it is not required for the prior right owner to be located in Turkey.

For example, Turkish Courts and the TPTO are unlikely to accept genuine right ownership claims of Clients who can only prove that their website has had hits from Turkey with no other commercial activity within the country, that can provide proof of a very low volume and value of sales or sales that have happened once in the distant past without any recurrence or consistency, and that have had activities in Turkey but without using the disputed trademark itself as per Article 6/3.

2. Protection of a well-known trademark registered abroad (Article 6/4 of the IPC)

Article 6/4 of the IPC states that:

“Trademark applications which are identical or similar to well-known marks within the context of Article 6 bis of the Paris Convention, shall be refused upon opposition in respect of identical and similar goods or services.”

Article 6 bis of the Paris Convention in turn refers to the responsibility of Member States to cancel and prohibit trademarks that constitute “a reproduction, an imitation, or a translation, liable to create confusion, of a mark considered by the competent authority of the country of registration or use to be well known in that country as being already the mark of a person entitled to the benefits of this Convention and used for identical or similar goods” and clarifies that the same provision also applies if the essential part of the mark constitutes a reproduction or imitation of the same.

The scope of protection for this provision must be considered separately from Article 6/5 of the IPC which provides well-known trademark protection regardless of the registered classes if the risk of damage to the distinctiveness or reputation of the prior mark or risk of unfair benefit thereof is present. In contrast, Article 6/4 provides protection only within the scope of the goods and services covered by the trademark while not requiring the above-mentioned conditions to be proven.

When the relevant provision of the Paris Convention, the relevant provisions of the WTO agreement on Trade-Related Aspects of Intellectual Property Rights (“TRIPS”) along with the text of Article 6/4 of the IPC are interpreted together, it is seen that the requirements for well-known protection in terms of Article 6/4 of the IPC are as follows:

• The prior trademark be registered before one of the Member States of the Paris Convention,
• The party making the claim is authorized to do so as per the Paris Convention,
• The prior mark is well-known in terms of the relevant industry in Turkey and abroad,
• The trademarks as well as the goods and services covered by the marks are the same or similar.

Being “known by all” is not sought and the term “relevant industry” refers to the industry where well-known status is claimed and where the trademark in question is registered in one of the Member States. Proof of well-known status can be evidence showing promotional activities, advertising spending, distinctiveness of the mark, local and international awards, etc. and the evidence must be prior to the application date of the disputed trademark.

3. Protection of intellectual property rights (Article 6/6)

Article 6/6 of the IPC states that:

“An application for registration of a trademark shall be refused upon the opposition of the right holder if it consists of a person’s name, trade name, photography, copyright or any other intellectual property right of another.”

While the text of the provision leaves little to interpretation, potential Clients and colleagues should note that the name mentioned herein does not refer to any ordinary first name that can be freely used by anybody, instead, it is expected that the name be distinctive and known to those in the industry. Indeed, in the event that a name known to be widely used in Turkey is copied fully (first and last name), an evaluation of intent is likely to occur even though it is not explicitly mentioned in the provision. The name mentioned herein need not be interpreted to mean only legal and real names, those used for distinction by artists and celebrities can also be protected under this provision.

Similarly, trade names may also be protected as per this provision, however, it should be noted that in practice, a near-exact copying of a distinctive trade name is sought by authorities in such cases.

Lastly, consisting of a person’s “copyright” can be understood to mean including the copyright either entirely or partially. Indeed, it is seen in practice that the copyright must be highly distinctive and recognizable to consumers as belonging to the prior owner. The entirety of the copyrighted work does not need to be included and secondary elements of a copyrighted work may also be protected assuming that they are, on their own, highly distinctive and identified with the copyright owner while being used as a distinctive primary element of the disputed trademark.

4. Refusal of applications filed in bad faith (Article 6/9)

Article 6/9 of the IPC states that:

“Trademark applications filed in bad faith shall be refused upon opposition.”

While the provision itself is quite short, the interpretation of what constitutes bad faith is highly dependent on both local and international case law. The burden of proof is often very high in terms of bad faith claims and potential Clients and colleagues should make sure that they consult a local expert with practiced knowledge before IP courts and the TPTO to obtain an overview before making bad faith the main claims of any dispute.

Considering the standards for bad faith can be changing with each subsequent Supreme Court ruling, it is important to follow recent developments. It should also be noted that bad faith must be present at the time of filing the application. The applicant acting in bad faith after registration or unrelated to the initial filing is not likely to constitute grounds for refusal unless it can be proven the applicant has had the intention while filing the application.

Some exemplary factors that have been taken into account in the past for finding “bad faith” are:

• A prior commercial relationship between the parties, such as a prior licensee or trademark attorney noting the lack of registration in Turkey and filing in their own name,
• Explicit proof of the intent of the applicant to prevent fair trade, prevent access of the trademark owner to the Turkish market, extort or otherwise manipulate the actions of the prior right owner,
• Copying a trademark that the applicant knew or should have known belonged to another,
• Filing an application for the exact copy of a well-known trademark that has not been registered in Turkey for the same goods and services,

It must be noted that among the examples listed above, bad faith is interpreted by the IP Courts and the TPTO considering the specifics of each case. Colleagues and Clients making bad faith a main claim in their actions should make sure that the conditions accepted in the recent rulings of both the Supreme Court and the TPTO are taken into consideration.

Another point of note is that as per Article 25 of the IPC, a party requesting invalidation of a trademark over five years after they first knew or should have known of the use of said later-dated mark cannot request invalidation of the mark unless said trademark registration was in bad faith. Therefore, loss of rights through remaining silent (acquiescence) has the notable exception that bad faith registrations can be invalidated regardless of timing.

5. Unfair competition (as per the TCC and Paris Convention)

Unfair competition occupies an unclear place in Turkish IP Law where the provisions and case law around unfair competition are largely outside the scope of IP Law. There are many ways in which acts that are considered unfair competition can also constitute grounds for trademark refusal, invalidation or determination of infringement. The outlines for what will constitute unfair competition are regulated in the Turkish Commercial Code (“TCC”) as well as Article 10 bis of the Paris Convention.

Article 55 of the TCC mentions numerous acts which constitute unfair competition and states that unfair competition includes but is not limited to acts outside good faith, unfairly denigrating, enabling confusion with, making use of the well-known status of, inviting undue comparison with, performing misleading actions regarding the works, goods, activities or commercial workings of another.

This regulation of TCC is in line with the acts mentioned in Article 10 bis of the Paris Convention which include but are not limited to:

• all acts of such a nature as to create confusion by any means whatever with the establishment, the goods, or the industrial or commercial activities, of a competitor;
• false allegations in the course of trade of such a nature as to discredit the establishment, the goods, or the industrial or commercial activities, of a competitor;
• indications or allegations the use of which in the course of trade is liable to mislead the public as to the nature, the manufacturing process, the characteristics, the suitability for their purpose, or the quantity, of the goods.

Unfair competition is dependent on a case-by-case examination, however, as a general rule it can be said that commercial practices copying the trademark of another leading to likelihood of confusion are more likely to be considered unfair competition.

While many conditions that constitute unfair competition can also fall within the scope of IPC provisions (such as “unfair benefit” as mentioned in Article 6/5 regarding well-known trademark protection and “bad faith” as mentioned in Article 6/9), unfair competition claims most frequently arise in cases where the circumstances of the dispute fall outside the protection scope of IP Law and must therefore be subject to the more generalized provisions of the TCC. Unfair competition arguments have previously been recognized within the parameters of bad faith as per Article 6/9 in terms of oppositions or invalidation actions.

Indeed, despite numerous past Supreme Court rulings that had accepted claims of unfair competition and trademark infringement simultaneously; the Supreme Court has stated in a recent ruling that in cases where it is appropriate, the IPC (as lex specialis) should serve as the source of protection and that it is not necessary to provide additional protection based on the TCC (as part of the so-called legi generali) on top of the more specialized IPC protection. To avoid a partial rejection decision as a result of this recent development, it is advisable to confirm with a local counsel which cases should include unfair competition claims.

Potential Actions Against Third Parties for Unregistered Trademarks Owners in Turkey

Opposition and Appeal Before the TPTO

The legal grounds mentioned above, except unfair competition, are explicitly stated as being grounds for the refusal of a trademark application upon the opposition. For potential Clients or colleagues who may not have prior experience in Turkish jurisdiction, it should be noted that all trademark applications in Turkey are filed before the TPTO. The TPTO then evaluates the application in terms of the filing requirements and, assuming said requirements are present, conducts an assessment of absolute refusal grounds, which includes being the same or indistinguishably similar to a prior registered trademark in terms of the same or similar goods and services.

Assuming there is no such issue found, the application is then published in the next Official Trademark Bulletin for the possible oppositions of third parties. Third parties then have a period of two months, starting from the publication date of the Bulletin, to file an opposition against trademark applications they believe infringes their rights. While a majority portion of the oppositions filed before the TPTO relates to claims of likelihood of confusion with a prior registered mark as per Article 6/1 of the IPC, Clients and colleagues who wish to take action based on unregistered trademarks should follow the same deadline and base their oppositions in line with our explanations above.

It should be noted that an opposition can be filed by a Turkish trademark attorney registered before the TPTO or by the right holder themselves if they are Turkish. Hence, it is important for foreign right holders to take action ahead of the deadline to ensure proper representation can be found and the attorney has enough time to draft and file the opposition.

Filing of an opposition is done online and is subject to an official fee. The Trademark Department of the TPTO will then evaluate the opposition and notify the attorney of the outcome of the opposition. Whether the opposition is accepted (and the application is refused wholly or partially) or not; the party that is unsatisfied with the decision has the right to file an appeal before the Re-examination and Evaluation Board of the TPTO (“Board”) within two months after the notification of the TPTO’s decision. The subsequent decision of the Board regarding the appeal is final and will be reflected immediately in the online records of the TPTO.

If one of the parties remains unsatisfied with the decision of the Board, they can file a cancellation action of the Board decision before the IP courts in Ankara. The courts will then examine the same grounds, often more detailed, and obtain one or multiple expert reports to decide on the matter.

Invalidation Action Before Turkish IP Courts

Article 25 of the IPC states that “If one of the conditions mentioned under Articles 5 or 6 exist, invalidation of a trademark shall be decided by the court.” Keeping in mind the fact that the above-mentioned grounds relate to Article 6 of the IPC, this can be understood to mean that essentially all grounds for opposition can also be used as grounds for invalidation before IP courts.

Invalidation actions can be filed by those with a vested interest and solely to the registered trademark before the TPTO. That being the case, the lawsuit must be filed against the owner of the trademark as seen in the registry and the content of the lawsuit must be focused on the registered right rather than the usage thereof. Usage of the trademark can often be relevant in invalidation actions in terms of bad faith claims.

As mentioned above, potential Clients and colleagues must take caution to abide by the 5-year period to avoid claims and defenses relating to acquiescence. As per Article 25/6 of the IPC;

“Where a trademark proprietor has acquiesced in the use of a later trademark for a period of five successive years while being aware or should have been aware of this situation, trademark proprietor may not allege his trademark as an invalidation ground unless the registration of the later trademark is in bad faith.”

With the assumptions in IP Law that all trademark right owners are traders and all traders must be sufficiently prudent and diligent in their trade; unregistered trademark owners are likely to face the claim that they should have known about the commercial activities of competitors and this situation makes invalidation claims time sensitive if bad faith is not involved. Therefore, bad faith claims and examinations become doubly important since most parties acting in bad faith take some measures to avoid being discovered by the Clients and colleagues.

Since the claims are based on the IPC, the dispute will be seen before the specialized IP courts if one is present at the jurisdiction of filing. As the specialized knowledge of IP courts is highly relevant in cases with considerable complexity, such as those involving unregistered trademark protection, specialized IP courts will be a beneficial factor for the claimant if one is available in the jurisdiction.

If invalidation claims are accepted by the Court and the decision is finalized, the trademark in question will be considered to have no legal bearing starting from the date of filing in terms of the invalidated goods and services. The change will also be reflected in the TPTO records upon finalization.

Unfair Competition Action Before Turkish Commercial Courts

In terms of trademark infringing acts, registered trademarks were traditionally considered to benefit from the protection of both the IPC and the TCC while unregistered trademarks can only be protected under the broader and more general scope of unfair competition as per the TCC. This view has recently been partially reversed by the Supreme Court, in contradiction with past case law and the Court has stated that the specialized legislation (namely the IPC) should be solely applied if the IPC is applicable without including unfair competition claims. Although the stance of the Supreme Court on this matter appears clear that the same acts should not be protected both by the relevant provisions of the IPC and unfair competition provisions of the TCC, this issue should be treated with caution until more Supreme Court decisions provide clarity on the Court's current position.

Unregistered trademark owners cannot benefit from the protection provided by Article 29 of the IPC which defines what constitutes trademark infringement since the same refers to Article 7 of the IPC (requiring registration to benefit from the protection of the provision). That being the case, colleagues and potential Clients who wish to take legal actions against commercial activities of another that infringe on their unregistered trademarks are advised to receive consultancy regarding unfair competition protection.

The grounds and interpretation of unfair competition will have the general basis mentioned above and must be construed in light of the TCC and Article 10bis of the Paris Convention as well as relevant case law. The scope of the lawsuit itself can differ from case to case, however, the most common claims are for determination, prevention, and revocation of unfair competition along with material and immaterial damages associated with it.

Since these claims are based on the TCC, the lawsuit will be seen before Turkish Commercial Courts which are often responsible for a very wide range of disputes. That being the case, especially in small jurisdictions that have fewer cases, there is a chance that the court will be less familiar with the relevant case law and legislation than a specialized IP court. Colleagues and potential Clients should therefore take care to be detailed and well-supported in their claims and defenses in a potential action.

ATG LAW FIRM

Authors:

Gizem AKGULOGLU

Ahmet AKGULOGLU