Despite annulment of Article 14 of the Decree No. 556 by the Turkish

Constitutional Court has created a lacuna about the legal ground of the use

obligation of trademarks; the proprietor always had the obligation for using

its trademark in Turkish and international Trademark Law. In a nutshell a trademark

that has not been genuinely used in Turkey for at least continuous 5 years, the

trademark can be requested to be cancelled due to non-use of the trademark,

unless there is a justification for non-use of the trademark. This article studies

the justifications that can be shown for non-use of a trademark in

consideration of the current case-law.

1.

Introduction

Despite annulment of Article 14 of the Decree No. 556 by the Turkish

Constitutional Court has created a lacuna about the legal ground of the use

obligation of trademarks; the proprietor always had the obligation for using

its trademark in Turkish and international Trademark Law. In a nutshell a trademark

that has not been genuinely used in Turkey for at least continuous 5 years, the

trademark can be requested to be cancelled due to non-use of the trademark,

unless there is a justification for non-use of the trademark. This article studies

the justifications that can be shown for non-use of a trademark in

consideration of the current case-law.

2.

The Notion of "Use of Trademark" under the Current

Legislation and Due Evidence of Use

The main

function of a trademark is to address the commercial entity of the products or

services bearing the trademark. Therefore, the driving force of having a

trademark registered for the proprietor is to use the trademark. Accordingly the

proprietors are expected to use their trademark on the goods and services

within the scope of the trademark.

The

trademarks that are not subject to "genuine use"[1] in

Turkey can be requested to be removed from the trademark registry through a

request filed before competent courts. As per Article 9 of the Turkish

Industrial Property Code No. 6769 ("IPC"), in short, (i)

the trademark should be used; (ii) the use should be genuine; and (iii)

the genuine use should be conducted in Turkey.

The notion

of use of trademark refers to commercial use. In other words, the trademark can

be considered to be used if the said uses aim to gain a profit and to create or

protect a market share out of it.[2] In

parallel to this, performing serious efforts to protect the trademark against trademark

infringements has not been considered as "trademark use" by the Court of

Appeals ("CoA"), under its decision numbered 2007/4588 E. 2008/13024 K.

and dated November 18, 2008.

The

proprietors are given 5 years of grace period from the registration of

trademark to the trademark registry as per Article 9 of the IPC, with a view to

allow making necessary arrangements for genuine use, for instance R&D or

creating supply chain.

The magnitude

of use is also another issue in determination whether the trademark has or has

not been used in the context of the obligation for trademark use. In general, use

of a trademark should be genuine enough to meet the obligation. Since the

concept of "genuine use" has been introduced to the IPC recently in January

2017, there are not much comprehensive precedents in Turkish Trademark Law on

what the genuine use is. But it could be said that symbolic use of the

trademark is not considered genuine. In fact, symbolic use of the trademark,

for instance in the last three months of fifth year of non-use, is considered

as an attempt to prevent the risk of facing removal of the trademark.

Also the magnitude

of use should be efficient enough to create or protect the market share. The

sufficiency use can differ depending on the goods and services. For instance,

the sale of 500 wafers is not deemed sufficient for trademark use, while the

sale of 10 luxury private jets is deemed sufficient.

Similarly,

the CoA has made a similar assessment about on the magnitude of use that can be

considered as genuine use, and concluded - with its decision numbered 2014/2295

E. 2014/8122 K. and dated April 30, 2014 - that 2 (two) invoices do not suffice

submitted to prove the genuine use as it cannot be considered sufficient to

create a market share.

The final

main element of use is the "location" of the use, which should be Turkey as per

Article 9 of the IPC, but the use does not necessarily have to in the whole

country. From this aspect, the use of a trademark outside of Turkey will not be

fulfilling the obligation. However, this is assessed with such a strict

approach. As long as the goods and services can be provided in Turkey, the CoA

accepts that the trademark is being used on Turkey. The SKY decision of CoA - numbered 2009/3437 E. 2011/2191 K. and dated

March 03, 2011 - is a case where the world famous SKY is being evaluated in respect of the location that its services

are provided. The CoA concludes that, considering the present technology, the

television channels do not have to have physical organizations and equipment to

provide television broadcast in a place. Accordingly, since the broadcast can

be watched by more than 600.000 people on its websites online from Turkey, it

is evident that the services rendered within the scope of the SKY trademark exist

- and thus the trademark is being used - in Turkey.

In addition,

it should also be noted that, according to Article 9/2-(b), there is an

exception made for the trademarks that are exclusively used for export business

and under the exception, such uses are considered as proper trademark use by

the IPC.

The uses in

compliance with the elements explained above are required to be proved before

the Court as well. In relation to this, due evidence of trademark use is considered

as any material that could attest to the use of the trademark. It should however

be kept in mind that the evidence submitted as proof of use must contain the

date, trademark, location of use, the goods and services bearing the subject

trademark. Thus, brochures, advertisements materials, calendars bearing the

trademark with advertisement purposes would be considered as weak evidences,

though can be regarded as circumstantial evidence.

As a recent

example on due evidence, the Supermac's vs. McDonald's decision[3] on

the trademark "BIG MAC" should be addressed here as well. The case is a non-use

action filed against McDonald's for its trademark "BIG MAC", with the claim

that the trademark has not been genuinely used for 5 years. McDonald's has

argued that the trademark has been duly used and submitted (i) several affidavits stating the sales of the sandwiches bearing

the subject trademark have reach millions, (ii)

brochures and  printouts of advertising

posters, (iii) printouts   from

several McDonald's   websites, (iv) a

printout from en.wikipedia.org as proof of use. The EUIPO however

asserts that the evidence is insufficient to establish genuine use of the trade

mark since the affidavits, despite having probative value, are only statements

given by one of the parties while the rest of the evidences originate from

McDonald's. As to the

websites, it is hold that the presence of the subject trademark has an impact

on showing the use of the trademark but having the trademark on a website is

not by itself sufficient to prove use of the trademark. As regards to the

brochures and printouts of advertising posters, it is stated that those

materials are not enough to show whether any product have actually been sold.

Finally, EUIPO explains that the printout from Wikipedia website is also not

reliable since the content of the website is created and changed by people. As

a result, the world famous fast food trademark "BIG MAC" has been cancelled due

to non-use because of a failure on proof of use.

In the same

vein, the CoA rules - with its decision numbered 2013/12512 E. 2014/1977 K. and

dated February 05, 2014 - that the photos submitted by the defendant as proof

of use do not provide any information about the date and also no additional

evidence was provided to attest to the dates on which the photos have been

taken. The CoA adds that the invoices are also inadmissible since they do not refer

to the trademark in question. This decision gives an insight about the nature

and content of evidence that is deemed to be capable of proving the use and

which qualifications the evidence must have to that end.

On the

other hand, evidence that is not found to be sufficient for proving the use could

be found sufficient when it comes to different goods and services. Indeed, another

recent precedent of CoA General Assembly of Civil Chambers, numbered E.

2014/11-106 K. 2016/67 and dated January 22, 2016, holds that brochures and

printouts of advertising posters are sufficient to show genuine use of the

trademark on "construction services"

and it is not imperative that the trademark is used on the real estate that is

being constructed too.

In general,

invoices, sales contracts, commercial records attesting to the commercial

transactions about the trademark in question are considered as solid evidence since

they can show the use made for commercial profit and with market share

motivation, surely provided that these contain the kind of information stated

above.

The

foregoing represent the main elements of proper trademark use and due evidence that

could refute non-use claims. Lack of these elements might cause the trademark

to be cancelled upon a non-use action but there are also justifications for

non-use, which would prevent cancellation. Below we explore the issues that do

and do not justify non-use in light of the case law.

3.

Precedents on Issues that do not justify Non-Use of

Trademark

The issues

justifying non-use of a trademark are, in summary, the circumstances that would

make use of trademark impossible in every aspect. In that sense if there is a

change that could allow use of the trademark, the CoA does not see a due justification

for non-use. With a view to provide insight as to the events and issues that

are not considered to be justifying non-use, below we provide as few precedents

that could serve to that end:

The

case has been filed with the claim for cancellation of the "PINAR" trademark

due to non-use. The defendant argues that the trademark has declared concordat

and ever since, their business volume has been downsizing; the trademark had

been seized and the trademark has been allowed to be used by third parties. The

first instance court have accepted the case and cancelled the trademark since

there was no evidence submitted to the court showing any use of the trademark neither

by the proprietor nor the licensees. Also the economic difficulties, such as

concordat or seizure, are not regarded as justifications for non-use of the

trademark. The decision was appealed by the defendant and approved by the CoA with

its decision numbered2007/10093E. 2008/13302 K. and dated 24.11.2008.

The plaintiff filed a

non-use cancellation action for the trademark "PENGUEN", arguing that the

subject trademark has been used only on the ice-cream goods and not on the

other goods and services covered under the scope of the subject trademark. The

defendant stated that the proprietor had declared bankruptcy, therefore they

were not able to use the trademark and this is a valid justification for

non-use. The CoA has been examined the case and concluded in its decision

numbered 2001/844 E. 2001/3429 and dated April 09, 2001 that the proprietor do

not lose its legal personality by declaring bankruptcy and the trademark right

can still be made subject to business transactions by the bankruptcy

administration. In light of the foregoing, declaring bankruptcy was not found as

a justification for non-use since there were several ways to use it despite the

bankruptcy.

The

applicant of the trademark "TERE" has filed an infringement case against the

well-known "TEREM-YAĞ" and the defendant made a "non-use defense" against the

plaintiff and requested the first instance court to reject the case.

Accordingly, the first instance court has hold that the plaintiff has not

renewed its trademark "TERE" and the trademark had lapsed in 1988; further, the

plaintiff himself went out of business 4 years after the lapse of his

trademark, in 1992. Therefore, the expropriation of his factory producing the

products bearing the earlier trademark "TERE" in 1986 cannot be considered as

justifications for non-use of the trademark. The decision has been appealed by

the plaintiff but the decision was approved by CoA. Later, the plaintiff

applied the CoA for a revision of decision and CoA rejected that as well with

its decision numbered 2002/1719 E. 2002/2064 K.and dated March 08, 2002.

The

claim in the lawsuit reviewed by the first instance court is cancellation of trademark

due to non-use with respect to certain goods and services registered under its

scope and revocation of the trademark for the rest of the goods and services

due to bad faith. The defendant has argued that several pending legal

proceedings that were pursued for protecting the trademark against third party

infringements and the intensity of the advertisements made for the trademark to

establish its place and ownership in the market has created a challenge for

proper use. But the Court ruled that justifications for non-use of a trademark

are circumstances that would objectively make it impossible for the proprietor

to use the trademark. Accordingly, economic inabilities and challenges, such as

not being able to compete with the competitors, are not considered a due justification

for non-use of the trademark. The decision has been approved by the CoA in its

decision numbered 2015/7331 E. 2016/2600 K. and dated March 09, 2016.

Finally,

in a non-use action filed against the "HAVELLS" trademark, it has been argued the sector changes of

the proprietor after the registration of the trademark and the economic crisis

in the country affected the business badly and the governmental authorities did

not grant the necessary permits for the production of the products that would

be bearing the trademark. Ultimately the defense was that it was not possible

to make business regarding the products bearing the trademark and requested the

Court to acknowledge this defense as justification for non-use. But the Court

did not agree with this defense and cancelled the trademark due to non-use. The

CoA approved the first instance court decision with its decision numbered

2015/1512 E. 2015/6851 and dated May 13, 2015.

4.

A Discussion on "Plain Packaging" from the Perspective

of Non-Use of Trademark

Similar to the European Union legislations to protect public health,

Turkish Government made an amendment on the present Article 4 of the Law No.

4207 on November 15, 2018. Accordingly, cigarette packaging has to contain

warning notes, which should take 85% of the packaging, and monotype calligraphy

for the trademarks on same colored packaging. The Law No. 4207 stated that the

details of plain packaging are going to be determined by a regulation to be prepared

by the Ministry of Agriculture and Forestry ("Ministry").

To that end the Ministry published the Regulation Pertaining the

Procedures and Principles on Manufacturing, Labeling and Supervision of Tobacco

("Regulation") on March 01, 2019. The Regulation provides that the outer

surface of the packaging;

shall be on the color numbered Pantone Cool Gray 2

C Matte,

shall contain the trademark with its additional

letter capitalized on the front surface of the package

shall be on monotype font which is "Helvetica" and

font size without special symbols such as "&" and without any embossment or

gold foil.

This recent amendment prevents many well-known tobacco trademarks to be

used due to the obligations connected to "plain packaging". Therefore, although

there is no doubt that sole verbal trademarks will be exempt from this

discussion, since only a determined style will be used on the packaging according

to the Regulation, it is a conundrum whether the trademarks that contain

figurative - or both figurative and verbal - elements will be exposed to

non-use actions after 5 years starting with the beginning of plain packaging

implementation.

With a view to shed some light into the abovementioned issue, we can

make note of the non-use action filed against Bacardi's BREEZER trademark by

KIRBIYIK FREEZER. This action was rejected due to the acknowledgement of

Bacardi's justification of non-use, which focused mainly on the regulative

prohibitions on the exportation of the alcoholic drinks at that time. The Court

had held that the prohibitions are due and solid justification for non-use. This

is a rare example of the issues that could pass as justification for non-use of

a trademark and it follows in general terms that regulative prohibition is a

due reason justifying non-use.

An additional argumentative topic on this discussion can be made on the

issue of whether the trademark uses on each cigarette itself is sufficient. As

known, the tobacco trademarks are not only used on the packaging, but also on

the cigarettes itself in a small size. Since the trademark uses on the

cigarettes are not covered in the Regulation restrictions, those trademark uses

might be deemed enough to rebut non-use claims.

5.

Consequences of Non-Use of Trademark

A trademark that has not been used by the proprietor for 5 continuous years

can be made subject to a cancellation action due to non-use and the effect of

cancellation was retrospective, before the annulment of the relevant law

stipulation. Indeed during the period where Decree no. 556 was in force, the

consequence of the non-use was provided as a cause for "revocation". But upon

annulment of the relevant law clause, i.e. Article 42-1(c) of the Decree No.

556, non-use actions were reformed and gained the nature of cancellation

actions. Thus the effects of a cancellation due to non-use are prospective.

The Court, in a cancellation action due to non-use, focuses on the matter

of trademark use for 5 continuous years preceding the date on which the case is.

The decision in such cases the cancellation decision will be effective from the

date of decision. Then again as per Article 27/2 of IPC, in case the

cancellation conditions have been met on a date earlier than the filing date of

the lawsuit, the plaintiff can request the Court to render its decision

effective from that earlier date on which the conditions were met.

6.

Conclusion

Both international agreements, to which Turkey is a party, and national

trademark regulation expects the proprietor to use its trademark and attaches

sanctions to non-use. Despite the annulment of Article 14 of Decree No. 556,

which happened only four days before the effective date of IPC, created a lacuna

on regulation-wise, trademark owners are still expected to use their trademark in

business transactions with the purpose of gaining profit and creating a market

share.

As an exception of this obligation for use of trademark, non-use of the

trademark is rendered exempt from repercussions in case of a justification for

the non-use event. The justifications for non-use of trademark are different

from reasons connected to force majeure. These justifications are

expected to be borne from circumstances that would objectively make it

impossible for one to use the trademark. Indeed, the economic crises,

bankruptcy or declaring concordat are not found to be sufficient as a proper justification

for non-use. On the other hand, legal prohibitions or obstacles are found to

justifying non-use of the trademark.

In broader terms, justification for non-use of trademark must be

connected to a circumstance that would objectively make the use of the trademark

impossible, regardless the circumstance being of natural, economic or legal

nature. Yet, even though the certain circumstance might make the use of trademark

challenging or unfeasible for the proprietor, such situations are not found to

be sufficient enough to constitute due justification for non-use.

Authors: Gönenç Gürkaynak, Esq. and Tolga Uluay, ELIG Gürkaynak

Attorneys-at-Law

(First published by Mondaq on

June 24, 2019)

[1] CJEU, C-40/01, Ansul

BV v. Ajax Brandbeveiliging.

See; Cam, Esen. "Avrupa Birliği Hukuku Uyarınca Markanın

"Gerçek Kullanım" Problemi." Journal of Commece and Intellectual Property  2.2

(2016): 27-41., p.29

[2] Çolak, U., 2018, Türk Marka Hukuku, On İki Levha

Yayıncılık, 4. Edition, Istanbul, p.972

[3]

EUIPO, Cancellation No 14 788 C, January 11, 2019