Legislation in Turkey: down with the Decrees

After decades of delay, Law No. 6769 on the Protection of Industrial Property Rights (the IP Law) entered into force on January 10, 2017, effectively abolishing Decree No. 556 on the Protection of Trademarks; Decree No. 551 on the Protection of Patents; Decree No. 554 on the Protection of Industrial Designs; and Decree No. 555 on Geographic Indications (collectively referred to as the Decrees). The Council of Ministers adopted the Decrees in 1995 to fulfil the obligations arising from the Customs Union Agreement signed in the same year.

While the Decrees were foreseen as a temporary solution, they remained in force for 22 years. The Decrees were in line with the EU directives and regulations of the time, but they soon became outdated and unsuited to the industry’s evolving needs and developments. In addition, and more problematically, the Decrees were controversial in nature, challenging the Constitution and new legislation. The Turkish Constitutional Court cancelled several of the Decrees’ provisions within the last ten years on the grounds that fundamental rights can be limited by law only and not by a Decree.

New legislation overseeing the protection of IP rights become a necessity in practice. Turkey’s replacement of this patchwork of regulations with the IP Law, prepared in accordance with EU laws and practices, is a groundbreaking development for the protection of IP rights. The introduction of the IP Law simplifies proceedings and adopts a more sophisticated system for the protection and enforcement of those rights. This article focuses on the major changes in trademark prosecution and protection.

A flexible approach for non-traditional trademarks

With developments in technology and different marketing needs, companies have begun using 3D designs, colours, flavours, textures, scents, movements, positions and holograms to market their goods and services instead of simple words and logos. The Trademark Decree required graphical representation but the IP Law has abandoned such a requirement and exemplified new types of non-traditional trademarks. It provides a flexible approach to new types of non-traditional trademarks as long as those are distinguishing one enterprise’s goods and services from another’s and are capable of being recorded with the registry.

Enforceability of consent letters

The Trademark Decree accepted a principle of uniqueness in terms of ownership of a trademark. That said, it was not possible for parties to give consent to a latter trademark once it had been rejected for being identical or indistinguishably similar. It was considered a public order and examined ex officio.

Since this archaic approach no longer meets business needs, the IP Law makes the co-existence of trademarks possible if the applicant provides a letter of consent from the registered trademark owner. The practice on consent letters is new and currently developing. The consent letter cannot include any conditions and should be a printed form signed and executed by the earlier trademark owner. The consent letter cannot reflect the parties’ intentions so they tend to execute co-existence agreements as side agreements and any disputes arising from the special condition of the co-existence agreement would be subject to breach of contract grounds.

Once filed, the consent letter cannot be withdrawn. However, no provision prevents the earlier trademark owner from filing an opposition to prevent the registration of a trademark it consented to previously. These types of oppositions can be interpreted as bad faith and can be rejected. Nevertheless, there is no established precedent and the matter is open for discussion.

Changes in trademark opposition procedure

To accelerate the registration process, the IP Law has shortened the opposition period from three months to two months.

In one of the most substantial changes introduced by the IP Law, opposed trademark owners (ie, applicants) will have a new form of protection: the defence of non-use. The Trademark Decree did not permit opposed trademark owners to argue that the opponent grounded its opposition on an unused trademark. With the IP Law, the opposed party is entitled to request proof of use, if the opponent’s trademark is vulnerable to non-use action.

The non-use defence can be overcome through submitting sufficient evidence such as catalogues, packaging, sales figures, invoices, marketing materials, advertising and promotion costs, advertising materials, public opinion polls, etc. If the opponent is unable to establish that its trademark has been genuinely used in Turkey, the case will be rejected without examination on the merits.

This provision aims to prevent bad-faith opposition and promote the use of registered trademarks. Nevertheless, it may provoke repeat filing for surpassing the proof of use obligation. That said, since only the trademarks which are vulnerable for non-use will be subject to non-use claims, the prior trademark owners may act in bad faith and file fresh applications every five years to avoid genuine use obligations and proof of use requirements. There are still no precedents on this topic in Turkish law but practitioners expect to encounter such occasions in the near future.

International exhaustion principle

An express provision to the IP Law has removed the grey area on territorial limitation of exhaustion of trademark rights. The Trademark Decree adopted the local exhaustion principle, ie, the products were outside the scope of protection if they were placed on the Turkish market. However, the IP Law adopted an “international exhaustion system” and does not limit the boundaries of the market with this provision.

Forfeiture by acquiescence

Before the enactment of the IP Law, there was no express provision on forfeiture by acquiescence. The Supreme Court considered the period of acquiescence on a case-by-case basis. According to the IP Law, the rights owner cannot raise its registered trademark as a revocation ground if it knows or is deemed to know that the registered trademark was used and remained silent for five consecutive years, unless the later trademark was registered in bad faith.

Separation of trademark revocation and cancellation actions

The IP Law has separated the grounds of revocation and cancellation actions. Even though these actions have different impacts, they were both referred to as “revocation actions” before the enactment of the IP Law. The revocation decisions have retrospective effect whereby a revoked trademark will be deemed unprotected as of its application date. A cancellation decision is effective starting from the date when the cancellation request is submitted to the Turkish Patent and Trademark Office.

Impact of prior registrations in infringement actions

The IP Law expressly regulates that a prior trademark registration cannot be raised as an absolute defence in an infringement action. Therefore, where infringing conduct exists, a registration will not deem a trademark lawful.

Change of the competent authority in non-use actions

One of the IP Law’s game-changing developments is that non-use actions will be under the authority of the Turkish Patent and Trademark Office. The effective date of this provision, however, was postponed for seven years to enable the authorities to prepare for this major transition. In the interim, the courts remain the competent authority for non-use actions.

Conclusion

The Decrees were inadequate in meeting the needs of modern IP practice. As with many recently introduced laws in Turkey, the IP Law was prepared in accordance with EU laws and practices. The IP Law leads the way for substantial changes in Turkey’s IP rights practice, specifically for trademarks.