The Istanbul IP Court recently dismissed a copyright infringement action involving a compensation claim on the grounds that the plaintiff had not fulfilled the procedural requirement to apply for meditation before filing the court action.
The court's decision was based on Law 7155, which entered into force on 1 January 2019. The law requires the implementation of a mediation procedure before instituting a court action. This means that plaintiffs should submit mediation minutes indicating the outcome of mediation proceedings together with the motion for instituting a court action. In the absence of the minutes, the courts will grant plaintiffs one week to submit them. If it is determined that the action was filed without implementing the mediation procedure, the court action will be dismissed on procedural grounds.
This article examines the effect that mandatory mediation will have on IP disputes.
Which disputes will be affected?
Under Law 7155, mediation is mandatory for all types of commercial dispute involving the collection of receivables or compensation claims.
How will this affect IP disputes?
IP disputes involving monetary compensation claims will be affected by this change, including:
- trademark, patent, industrial design and geographical indication disputes;
- copyright infringements involving compensation claims;
- disputes regarding the payment or calculation of remuneration for employee inventions and designs; and
- disputes regarding licence agreements.
Will mediation be mandatory for all IP disputes?
No. There is an exemption for actions in which both parties are non-merchants in copyright lawsuits only. In other words, if both parties of a copyright dispute are non-merchant real persons, the plaintiff will be able to institute the action without commencing mandatory mediation.
Actions for the determination of evidence and actions involving preliminary and/or permanent injunctions or the seizure and destruction of infringing products and/or machinery where there is no separate compensation request claimed within the context of the same action will not be affected by the mandatory mediation requirement.
The mandatory mediation procedure will not be applied if arbitration or other ADR methods are required as per the special laws or if the parties in a dispute have already agreed to an arbitration agreement.
How will the mandatory mediation procedure in IP disputes work?
Mediators will be appointed from a list of registered mediators according to their specialisation. A mediator from the list can be selected upon agreement of both parties. If this is not possible, the mediation bureau established in the jurisdiction of the competent court will appoint a mediator. The civil court of peace will work as a mediation bureau in the absence of a mediation bureau established within the jurisdiction of the competent court.
Mediation proceedings must be concluded within six weeks as of application. This period may be extended for two weeks. Unless agreed to the contrary by the parties, the mediation proceeding will be kept confidential. The mediator, parties and third parties involved in the mediation proceedings cannot disclose or use as evidence in a court action:
- the requests and proposals made by the parties;
- suggestions or acknowledgement of an act or claim; or
- documents prepared only for mediation purposes.
The minutes of the first meeting can disclose only the information of the parties and their aim to have the matter resolved mediation. A party that fails or refuses to attend the first meeting in mediation proceedings will be ordered to pay the subsequent court costs, even if its claims are partially or totally accepted by the court.
Plaintiffs will be entitled to file the action if no settlement is achieved by the end of the mediation or if the other party does not attend the mediation proceedings or if it attends but refuses the settlement.
The Ministry of Justice highly recommends parties to seek a resolution through mediation proceedings. The Mediation Act that entered into force on 22 June 2013 introduced the mediation procedure as an ADR method. Settlement agreements received at the end of mediation have the effect of a court verdict on their certification by the courts. Mediation first became mandatory for labour disputes, which achieved a considerable number of out-of-court settlements in 2018. This new legislation for mandatory mediation concerning IP disputes will certainly encourage out-of-court settlements in this regard.
For further information on this topic please contact Okan Can or Elif Türkan Dinçer at Deris Attorney At Law Partnership by telephone (+90 212 252 6122) or email ([email protected] or [email protected] ). The Deris Attorney At Law Partnership website can be accessed at www.deris.com.tr.
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