2017 is being an unprecedented year for IP rights in Turkey. As we announced in our alert dated January 11, 2017, the long awaited Industrial Property Law entered into force and abolished the Decree No. 556 on Protection of Trademark Rights (“Trademark Decree“), which was in effect since 1995. While expected and welcomed news, a radical and unexpected development occurred before the enactment of the Industrial Property Law.
In our alert dated January 9, 2017, we touched upon the groundbreaking development regarding the annulment of Article 14 of the Trademark Decree by the Turkish Constitutional Court on December 14, 2016 (the “Annulment Decision”). The provision enabling the cancellation of a fundamental property right for a non-use under a decree had been highly criticized due to lacking constitutional grounds. The Annulment Decision was published on the Official Gazette on January 6, 2017 and entered into force upon publication. By that time, the effective date of the Industrial Property Law was not certain and the fate of the non-use cancellation actions became unclear.
Shortly afterwards, on January 10, 2017 Industrial Property Law entered into force. The Industrial Property Law contains a provision for non-use cancellation actions, but the four-day period between the publication of the Annulment Decision and the enactment of the Industrial Property Law creates a loophole for pending non-use cancellation actions. Unfortunately, the first instance and appellate courts began to dismiss the ongoing non-use trademark cancellation actions that were filed under the Trademark Decree, due to lacking legal grounds.
Effect on cancellation actions
Non-use cancellation actions filed after January 10, 2017 will be examined in line with the provisions of the Industrial Property Law, particularly its provisions on genuine use requirements and consequences.
Uncertainty about the future of cases filed prior to the Industrial Property Law has generated continuing discussions among IP professionals. Recent decisions revealed that the first instance and appellate courts began to dismiss the non-use trademark cancellation actions filed before January 10, 2017 without examination of the merits.
The main rationale behind the dismissal decisions is that the Turkish Constitutional Court’s decision has direct effect on the pending cases. Since the Annulment Decision and the Industrial Property Law did not enter into force on the same date, the pending cases before the courts become groundless during the interim period.
There are ongoing discussions as to whether this loophole can be overcome under the relevant provisions of the TRIPS1 Agreement2 or the Article 13 of the Turkish Civil Law (“TCC“). As dismissal of the current cases would likely cause unrest and damage to the rights of the trademark owners, judges may still refer to the TRIPS Agreement and Article 1 of the TCC. However, courts are reluctant to apply the TRIPS provisions, as those are not mandatory but rather recommended rules. Conclusion
Although, Turkey entered a new era upon enactment of the new and modern Industrial Property Law, this particular development regarding the non-use cancellation actions was not expected. Practitioners are concerned about the threat of dismissal of ongoing cases and working hard to adopt a harmonized position. Unfortunately, this development is likely to lead to major pecuniary and non-pecuniary losses. Those who have pending non-use cancellation actions filed prior to January 10, 2017 should closely monitor the outcome of the cancellation action and should prepare for an adverse outcome.