The Turkish Court of Appeal’s 11th Chamber recently published a case in which it considered a claim about the enforceability of rights arising from a bad faith trademark registration (2013/17104 E. 2014/14018 K.). The court held that if a trademark registration was clearly made in bad faith and the trademark has been invalidated by a court decision, the invalidity decision will have retroactive effect. Therefore, it held that all pecuniary damages which accrued due to the bad faith registration must be compensated.

In the case at hand, the plaintiff is a foreign company which operated in Turkey through an exclusive agency agreement with the defendant. After the commercial relationship failed, the defendant registered the plaintiff’s commercial name as a trademark with the Turkish Patent Institute.

At the First Instance Court, the plaintiff claimed invalidity of the trademark registrations. It also claimed the defendant’s actions constitute unfair competition, sought prevention of this violation, as well as compensation for pecuniary and non-pecuniary damages.

The First Instance Court rejected the plaintiff’s claims, stating the rights arising from a trademark registration are legally valid. Therefore, the court held that the defendant’s actions did not constitute unfair competition.

The plaintiff appealed the decision to the Court of Appeals. The higher court overturned the First Instance Court’s decision in the plaintiff’s favor.

The Court of Appeal noted previous decisions exist which state that trademark usage after their due registration will not constitute unfair compensation. However, the Court of Appeal gave decisive weight to a decision (considering industrial designs) which stated (Assembly of Civil Chambers, No.11-209/399, 27 March 2013):

  • Invalidity decisions have a retroactive effect.
  • A legal order does not protect misuse of a right.
  • A person must not claim that he was acting with good faith, if he has not shown the attention which was expected from him.

The Court of Appeal noted that under Article 44 of the Decree Law No. 556 on Protection of Trademarks, if a trademark has been invalidated by a court decision, the invalidity decision has retroactive effect.

Accordingly, the Court of Appeal held that the legal rights acquired from the registered trademark cannot be protected due to the defendant’s bad faith. As a result, the defendant was required to compensate the plaintiff’s damages which accrued from the invalid trademark registration.

Case Reference: Yargıtay 11. HD 2013/17104 E. 2014/14018 K.

Information first published in the MA | Gazette, a fortnightly legal update newsletter produced by Moroğlu Arseven.