The adoption of a single, comprehensive law to replace Turkey's patchwork of decrees governing intellectual property has long been discussed. After decades of delay, on April 6, 2016, with the submission of the final draft of the "Law on Industrial Property"[1] to the Turkish parliament, efforts to adopt a new law to protect intellectual property rights have accelerated. The draft would substantially strengthen the protection of intellectual property rights in Turkey.

As has been well-publicized, Turkey has suffered from a chronic weakness in the protection of intellectual property rights, particularly for trademarks, patents and industrial designs from the time these rights were first regulated by various decrees (Kanun Hükmünde Kararname) adopted in 1995.[2] The decrees were Turkey's first steps toward harmonization of its intellectual property laws with EU regulations and fulfillment of its obligations to the European Union–Turkey Customs Union. The decrees were intended as a temporary solution for a short transition period, but have remained in force for over twenty years.

As time has passed, the decrees increasingly failed to meet the country's needs, their provisions becoming more controversial within the framework of the Turkish Constitution and newer laws. Under the Turkish Constitution, fundamental rights can only be limited by law and not by decree. As a consequence, over the past decade, the decrees proved problematic in that Turkish courts have concluded that they limit fundamental rights. Many provisions found to limit such rights have since been cancelled by the Turkish Constitutional Court. For example, the criminal provisions of Decree No. 556 on Protection of Trademarks (the "Trademark Decree") were cancelled in 2008. Other provisions of the decrees have also been cancelled as unconstitutional in 2014 and 2015.[3]

As with other new laws in Turkey, the draft law was prepared in accordance with EU law and practice as Turkey works to comply with EU requirements , leading the way for substantial change to Turkey's intellectual property rights practice for patents, utility models, trademarks, industrial designs and geographical indications.

Key upcoming changes to Turkish trademark law

Enforceability of Co-Existence Agreements and Letters of Consent

Letters of consent and co-existence agreements were not previously enforceable in Turkey, presenting difficulties for brand owners' new market entries where owners had failed to register their trademarks due to an office action on absolute grounds. The draft law will make the co-existence of identical and confusingly similar trademarks permissible. Consent letters will be enforceable and enable the applicants to overcome an absolute grounds rejection with the prior right owner's consent.

Opposition and cancellation of registered and unregistered well-known trademarks

The draft law makes a clear distinction between well-known trademarks registered in Turkey and those which are not. Article 6/4 of the draft law regulates the protection of well-known trademarks unregistered in Turkey, granting them protection in accordance with the Paris Convention. The owner of an unregistered well-known trademark will, therefore, be able to oppose applications for a mark identical or similar to a well-known trademark, including for the same or similar goods and services.

Similarly, Article 6/5 provides protection for a registered well-known trademark in different goods and services categories where there is risk of diluting its distinctive character or unfair advantage being gained from its reputation. If there is a risk that this may occur, the latter trademark will be rejected, even for goods and services different from those of the well-known trademark.

Opposition Period

The draft law shortens the opposition period from three to two months. Once the law becomes effective, therefore, a registration opponent must file an opposition within two months from the publication date of the later trademark.

Bad Faith Trademark Applications

In practice, bad faith has been a valid ground for oppositions and cancellations in Turkey pursuant to Supreme Court precedent, but without any basis in the Trademark Decree. In line with current practice and court precedent, the draft law specifically makes bad faith applications a relative ground for refusal and revocation.

International Exhaustion

Although the Trademark Decree contains the exhaustion principle, it was specifically limited to exhaustion in Turkey. In spite of this limitation, recent practice in Turkey had, nevertheless, been moving toward international exhaustion. To eliminate this inconsistency between law and practice, the draft law removes the word "Turkey" from the article on exhaustion of trademark rights. Upon adoption, the new law will expand the exhaustion principal to include international exhaustion.

Non-use defense in trademark oppositions

In one of the most substantial changes introduced by the draft law, opposed trademark owners (i.e., applicants) will have a new form of protection: the defense of non-use. Current law does not permit opposed trademark owners to argue that the opponent has grounded its opposition on an unused trademark. The draft law introduces an option in favor of the opposed trademark owner, who will be able to challenge the opposition by requiring the opponent to submit evidence of genuine use of the trademark which is the basis of the opposition. For an applicant to successfully assert this defense, the opponent's trademarks must be vulnerable to a non-use defense, i.e., five years must have passed from the date of registration. Unless genuine use is proven, the opposition will be rejected.

Non-use defense in trademark revocation and infringement actions

Defendants in trademark revocation and trademark infringement actions will be entitled to use the non-use defense if five-year grace period has expired for the claimant's trademark. If the claimant is not able to establish that its trademark has been genuinely used in Turkey, the case will be rejected without examination on the merits.

Clear separation of cancellation and revocation

The draft law makes a rigid distinction between the revocation and cancellation of a trademark and lists the grounds of cancellation and revocation in different articles.

The Turkish Patent Institute as competent authority for cancellations

One of the more surprising developments is that the competent authority is changed from the courts to the Turkish Patent Institute. The effective date this provision, however, is postponed for seven years to enable the authorities to prepare for such a major change.

Prohibition on use of trademarks in company names and in comparative advertisements

Under the draft law, the acts for which a trademark owner can seek a remedy have been expanded. A trademark owner will be able to enjoin the use of its trademark in the company name of a third party or any unlawful use of the trademark in comparative advertisements.

Use of a registered trademark as a distinctive part of a company name was a grey area as a registered company name was considered a legitimate use. The only option for trademark owners whose trademark had been illegally incorporated into a company name was to initiate a revocation action in the general commercial courts. Now, use of a trademark as a company name will be among the acts which may be prohibited by a registered trademark owner.

Comparative advertising is already permitted in Turkey under the Consumer Protection Law and the Regulation on Commercial Advertisements and Unfair Commercial Practices (the "Advertising Regulation") but direct references to competitors in comparative advertising was still prohibited. On December 31, 2016, however, Article 8/2 of the Advertising Regulation will enter into effect, eliminating the prohibition and permitting the use of competitors’ names and trademarks provided that such use is in compliance with the requirements under Advertising Regulation. More information on comparative advertising can be found here. Even though comparative advertising with competitors' names and trademarks will be permitted as of December 31, 2016, advertisers will still be prohibited from referring a third party trademark in a comparative advertising if such referral does not comply with the requirements of the Advertising Regulation. In such cases, the advertisers may be subject to both misleading advertising claims and trademark infringement.

Loss of rights due to remaining silent

The principle that a trademark owner may lose the right to file trademark revocation actions due to remaining silent has no basis in the Trademark Decree. Rather, it is a product of Turkish court precedent relying on the EU First Trademarks Directive (89/104/EC) and the Community Trademark Regulation (40/94). Turkish court decisions as to the necessary length of the "silence" were inconsistent and contradictory. The draft law eliminates this uncertainty. The draft law provides that a trademark owner who knows or should have known that a later-registered trademark has been used, but who took no action and remained silent for five years, cannot rely on a prior registration as a legal basis for revocation.

Protection of Non-Traditional Trademarks

Signs that enjoy trademark protection are broadened to encompass the sounds, packaging and product shape.

Conclusion

As has been discussed for years, the Trademark Decree is inadequate to meet modern intellectual property practice. While subject to further revision and has not yet been finalized, the draft law is not expected to change substantially upon enactment. Even with further revision, the new law will ensure that Turkey's intellectual property law is better suited to the needs of intellectual property right owners, in a framework more harmonized with EU and global practice.