Article 42/1-c found unconstitutional
In general, Article 42 sets out the grounds for the cancellation of a trademark. Article 42/1-c refers to Article 14, in which the obligation to use a trademark is regulated. In line with this obligation if, within a period of five years from registration, the trademark has not been used without a justifiable reason or if use has been ceased for an uninterrupted period of five years, the trademark shall be invalidated.
As we reviewed the background of the Constitutional Court’s decision, we found that Article 42/1-c was brought to the attention of the Constitutional Court by the 4th Intellectual and Industrial Property Rights Civil Court’s judge.
In the dispute, examined by the first instance court, the plaintiff had asserted that the respondent’s trademark constituted trademark infringement. Therefore, the plaintiff requested the cessation of the infringement, monetary and moral damages and the cancellation of the respondent’s trademark. As a counter-action, the respondent requested the cancellation of the plaintiff’s trademark based on non-use.
After examination, the first instance court accepted both claims partially and not only decided to cancel the respondent’s trademark but also accepted the counteraction. Therefore the plaintiff’s trademark was also cancelled based on non-use, for the goods which have not been in use.
The Court of Appeal reversed the lower court’s decision on the grounds that the first instance court should have obtained an additional expert report, examining the issue of whether goods under the plaintiff’s trademark and the goods covered by the respondent’s trademark are similar and whether the likelihood of confusion could arise.
The reason the Court of Appeal reversed the first instance court’s decision was related to the retrospective effect of the cancellation—according to Article 44 of the Trademark Law, a final decision for the declaration of cancellation shall have retrospective effect. That means goods, which were cancelled based on non-use, cannot be taken into account during the similarity examination of the trademarks as those goods will be deemed to be as if they were never registered in the first place.
In its application, the first instance court mainly argued that the cancellation of a trademark based on non-use should have a prospective effect and not a retrospective one, and explained the issue as follows:
• Unlike the other grounds for the cancellation of a trademark, the ground of non-use is formed after registration. That means the other grounds are existent in the stage of registration, but in the case of non-use, the trademark is registered lawfully;
• As a result, the cancellation based on non-use should be effective as of the court’s finalised decision and date back to the end of the five-year period, not the date of registration;
• If the retrospective effect is accepted, the registered trademark will be deemed as if it has never been registered after the cancellation decision based on non-use. Therefore, the trademark owner’s acquired rights and property rights based on its trademark will be violated. Note that the Turkish Constitution protects intellectual and industrial property rights on the basis that they are property rights (Article 35); and
• The article in question is contrary to Article 91 of the Turkish Constitution, which sets forth that (with limited exceptions) decree laws may not regulate fundamental rights, nor may they regulate individual or political rights and duties.
The Constitutional Court agreed that Article 42/1-c of the Trademark Decree Law brings restrictions to property rights and such provision cannot be regulated by decree laws. Therefore, it has been cancelled.
As for the consequences of the Constitutional Court’s decision, we are of the opinion that the main issue, which was found unconstitutional, is the retrospective effect of the cancellation decision of a trademark based on non-use. As Article 14 of the Trademark Decree Law stands, we are of the opinion that cancellation actions may still be filed based on non-use.
However, the effect of the cancellation decisions will be prospective. Regarding the pending cancellation actions based on non-use, in our opinion the actions should not be dismissed given Article 14 is still in effect. The question of how the first instance courts and the Court of Appeal will react against the cancellation of Article 42/1-c remains unanswered at the moment.
Isik Ozdogan is a partner at Moroglu Arseven. She can be contacted at: iozdogan@morogluarseven.com
Ezgi Baklaci is a senior associate at Moroglu Arseven. She can be contacted at: ebaklaci@morogluarseven.com
