Turkey: A serious approach to counterfeiting

Turkey’s share of global counterfeiting is worth $1.7 billion, according to a report by the US Chamber of Commerce’s Global Intellectual Property Center (GIPC). However, the country is taking these frightening statistics head on and is getting serious in its fight against fakes.

Tolga Semiz, partner in the Istanbul office of law firm Kinstellar, says that “people are getting serious every day to prevent counterfeits in Turkey”. These people include lawyers, judges and prosecutors, who all play a “huge role”, he says. Semiz adds that the most frequently counterfeited products in the country include textiles, and luxury goods and watches.

According to the International Chamber of Commerce (ICC), Turkey is the second largest market for counterfeit products in the world and 58% of consumers in Turkey admit to “regularly” purchasing illicit products. As a result, counterfeiting has been a significant drain on the country’s tax revenues, and hurts employment and foreign direct investment. The ICC reported in 2013 that Turkish police seized $650 million worth of fakes including 100 million boxes of cigarettes and 400,000 mobile phones.

In 2015, a report by the Organisation for Economic Cooperation and Development, called “Trade in Counterfeit Goods, Mapping the Economic Impact”, placed Turkey as the second country in terms of its propensity to export counterfeit goods; Hong Kong was ranked first.

Jeffrey Hardy, director of the ICC’s Business Action to Stop Counterfeiting and Piracy (BASCAP), said at the time: “Measures to fight counterfeiting have clearly not been sufficient. If governments hope to stabilise the economy and stimulate economic growth and employment, they must do a better job to support the central role that IP plays in driving innovation, development and jobs.”

BASCAP was formed by the ICC in 2004 to “combat product counterfeiting” and copyright piracy worldwide. Since 2011, BASCAP has worked to improve IP rights protection in Turkey.

In 2011 BASCAP published a report called “Promoting and Protecting IP in Turkey”, in which it outlined the value of IP and why it’s important to Turkey’s integration into the global economy.

It advised Turkey to “continue strengthening its IP rights systems in cooperation with established international channels and trading partners”. The report suggested that Turkey should extend and simplify ex officio actions, improve and expedite civil enforcement procedures, and address deficiencies in criminal IP law and procedures.

BASCAP also suggested that the country should increase public and political awareness of counterfeiting and piracy and the associated economic and social harm. Some of these measures were implemented throughout BASCAP and Turkey’s five-year partnership from 2011 to 2016.

Public campaigns

In April 2013, to coincide with ‘World Anti-Counterfeiting Day’, Turkey launched its ‘I Buy Real’ campaign, which included a series of events, as well as personal messages from local writers, designers and musicians about the campaign. Various public awareness events were held in 81 provinces, and celebrities and business leaders visited a booth at Kanyon shopping mall in Istanbul which was set up by ICC Turkey.

The campaign is based on consumer research on what drives consumers to buy counterfeits, including analysis of 176 existing consumer perception studies from 40 countries.

This publicity was shown through different media channels including newspapers, articles, posters and television advertisements. The campaign successfully promoted awareness and contributed to the fight against piracy and counterfeiting.

Despite these moves by BASCAP and Turkey, counterfeiting remains a problem for the country. A report published by the GIPC on June 20 this year provided a “deep-dive” analysis of trade related to physical counterfeiting and a breakdown of the global rate of it. The report was called “Measuring the Magnitude of Global Counterfeiting: Creation of a Contemporary Global Measure of Physical Counterfeiting”.

China and Hong Kong were placed first and second in the top five economies responsible for fake products, measured by value, seized in the US, EU and Japan from 2010 to 2014. The study showed that Turkey is responsible for $50.6 million worth of imported counterfeit goods into the EU, putting it in third place.

Further, Turkey was placed fifth in the economies studied in the report for their global share of counterfeiting, with $1.7 billion.

According to the report, “Turkey’s counterfeit goods market, as measured by the number of legal suits filed against infringing products, is ranked second in the world after China”. But this analysis, the report adds, “has its limitations”, as additional factors drive counterfeiting such as supply and demand drivers and market characteristics.

Turkey was placed fourth with a total of nearly $700 million in the total value of counterfeit goods seized in 2013.

Legal measures

There is concern about the strength of the current legislation in Turkey to adequately protect brands and rights owners from counterfeits.

Turkey has been managing the protection of IP rights, specifically patents, trademarks and designs, by the Decree Laws since 1995.

Cahit Suluk, founder of Turkey-based law firm Suluk IP Law Firm, says that in Turkey “it is very common to face counterfeit goods in the market and in order to prevent the sale of counterfeits, a number of legal and administrative measures are taken”.

“The regulation of industrial property rights such as trademarks, patents and designs is arranged through separate Decree Laws in Turkey. A new law under the name of the Industrial Property Code (IPC), which will abolish these separate laws, is to be admitted soon. With the entry into force of this code, the scope of crimes resulting from the sale of counterfeit goods will broaden.

“The IPC will expand the statutory definition of criminal trademark infringement beyond ‘produce’, ‘carry’ and ‘sell’ to include those who import or export, commercially purchase, stock, transport or store goods and services that infringe a trademark. A person convicted will be sentenced to imprisonment of one to three years and pay a punitive fine,” he adds.

"whatever you do with new laws, you must sort out the practical problems first, rather than the legal ones.”

The IPC, he says, is expected to be in force by the end of 2016. In practice, the acts for which many prosecutors and criminal judges have abstained from stating as “crimes” will become defined crimes in law.

Further, he says that the immediate destruction of counterfeit goods is also included in the IPC.

“Sufficient samples will be taken from the illegal counterfeit goods and the remaining goods will be destroyed if they are damaged, or there is a significant risk of losing value, or storage of goods is laborious.

“In the presence of any of these conditions, an examination will be carried out by an expert witness and the goods will be destroyed at the beginning of the proceedings by court decision,” he explains.

This new law also allows the Turkish Patent Institute (TPI) to cancel trademarks that are not used in seven years, in order to deter so-called trademark squatters.

The period for filing an opposition to a trademark application will be reduced from three months to two months, after it has been published in the Official Trademark Bulletin. The IPC will expand trademark offences to include acts such as manufacturing or providing services, selling, marketing, importing or exporting.

There are also widespread changes throughout the TPI, which will be renamed the Turkish Patent and Trademark Authority.

A practical problem

According to Suluk, “important measures” have been taken with the help of police forces and customs. He singles out the customs administration as conducting its work quite effectively, although, due to the “disruption of the judicial power”, the desired results cannot be achieved.

This disruption is the main problem the country is facing in the struggle to combat counterfeit goods, Suluk says, as the prosecutor’s office and judges are “reluctant” to confiscate such goods.

This sentiment is reiterated by Semiz, who says that counterfeits are “more of a practical problem, rather than a legal one because laws are preventing counterfeits already”.

“However, when it comes to applied laws into real matters, there is a problem. The slowness of the process and approach of the legal offices are the problems,” he adds.

“Therefore, whatever you do with new laws, you must sort out the practical problems first, rather than the legal ones,” he says.

Barış Boy, partner at Adres Patent, adds that: “It can be said that there is sufficient legislation as well as improvement efforts under Turkish law, providing effective protection to fight against counterfeiting. However, there are also some challenges that need to be addressed and resolved promptly.

“We ought to increase public education and raise awareness about IP rights in cooperation with industry and law enforcement.

“Stronger IP rights protection causes an increase in tax revenues and positively affects Turkey’s business climate, reputation, and ability to attract and sustain multinational investment,” he adds.

Although Turkey has been listed second in the world for counterfeits, the country is actively trying to do something about curbing the production, marketing and selling of counterfeit goods.

Semiz says that “we are not proud of it, but Turkey is playing a very important role in counterfeits” and that “I know the quality of the counterfeits is very close to the original ones”.

“Not only lawyers, but the prosecutors and judges are playing a huge role in preventing counterfeiting in Turkey, and believe me, people are serious about preventing counterfeiting.

“You can’t tell if counterfeiting is going to stop, but if we can provide good examples to prevent the crime then I think day after day we can make progress,” he argues.

Although there is much work to be done, it appears at least that those dealing with legislation and enforcement in Turkey are taking the fight seriously.