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18 May 2020
A third party's unauthorised modification or replacement of original packaging, product codes or trademarks to produce misleading claims of origin and eliminate a trademark's origin function is considered trademark infringement by means of rebranding and re-marking in principle, even though the goods are basically original.
According to the Industrial Property Code (IP Code), trademark infringement is defined as using an identical or indistinguishably similar trademark without the rights holder's consent.
The IP Code provides no definition of the term 'counterfeit'; however, Article 29 of the code describes counterfeiting as:
Therefore, under Turkish IP law, using a registered trademark that is identical or indistinguishably similar to registered goods or services without the rights holder's consent is considered counterfeiting.
In this context, as under the IP Code rebranding and re-marking constitute removing or modifying a trademark, original packaging, barcode or serial or lot code from original products without the trademark owner's consent, such actions are accepted as specific forms of trademark infringement but not counterfeiting, since the products are not fake but modified.
There is a fine line between accepting and not accepting rebranding and re-marking as trademark infringement, as infringement cannot be claimed once the products are released on the market unless a third party modifies or impairs the original products for commercial purposes. Notably, as Turkey accepts the international principle of exhaustion, the term 'market' is not limited to the Turkish market.
According to Article 152 of the IP Code:
(1): Actions related to products subject to industrial property right protection shall be out of scope of the right once such products are released to the market by the right holder or by third parties upon consent of the right holder.
(2) A trademark holder shall have the right to prevent the commercial use of the products within the scope of the provision of paragraph one through modification or impairment by third parties.
In a case reflecting Supreme Court precedent on this matter,(1) the plaintiff filed a civil action to determine trademark infringement on the grounds that the defendant had removed manufacturing codes from the original products.
The local court stated that, although the principle of exhaustion is accepted under Turkish law, trademark owners have right to prevent third parties from modifying or impairing their original products for commercial purposes. Therefore, the court accepted that the defendant's actions constituted trademark infringement, since they created a misleading impression of the products' origins and removed the trademark's guarantee function. The Supreme Court upheld the local court's decision.
On the other hand, in a more recent Supreme Court case(2) the plaintiff filed a civil action to determine trademark infringement and unfair competition on the grounds that the defendant had removed serial or batch numbers of original products during a parallel import. The Supreme Court accepted the plaintiff's claims on the basis of three products which did not include serial or lot codes, although it was indicated that the serial or lot codes were written on the back of the products' packaging.
The Supreme Court indicated that, pursuant to (repealed) Article 13 of Decree-Law 556 on the Protection of Trademarks (repealed and replaced with Article 152/1 of the IP Code), actions relating to products subject to industrial property right protection fall outside the scope of infringement once such products are released on the market by the rights holder or by an authorised third party. Therefore, the plaintiff's trademark infringement claims were denied for the products which included new serial or lot codes that the defendant had placed on the market during a parallel import without intending to gain unfair price advantages by means of unfair competition or trademark impairment.
However, during the parallel import, it was determined that three of the products had no serial or lot codes, despite indications that they were written on the back of the product packaging. The Supreme Court accepted the existence of impairment and thus trademark infringement since the defendant's actions could create a misleading impression of the products' origins and thereby damage the trademark's reputation.
On the other hand, Article 30/2 of the IP Code provides that any party which removes a sign indicating a trademark on a product or its packaging without the rights holder's consent can be sentenced to between one and three-years' imprisonment and receive a judicial fine. Further, the IP Code entitles trademark owners to file a criminal complaint if their trademark is removed without authorisation.
Re-marking is accepted as a specific form of infringement but is not considered straightforward counterfeiting, since the rebranded or re-marked products continue to be genuine products.
Trademark owners are entitled to prevent the unauthorised modification or impairment of their products or services, as said activities not only fall within the scope of trademark infringement and unfair competition, but also damage the essential function of a trademark to exclusively identify the source or origin of products or services.
For further information on this topic please contact Okan Can or F Burcum Evgin at Deris Attorney At Law Partnership by telephone (+90 212 252 6122) or email (email@example.com or firstname.lastname@example.org). The Deris Attorney At Law Partnership website can be accessed at www.deris.com.tr.
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