With two new decisions the Constitutional Court has continued to chip away at Decree-Law 556 on Trademarks, further eroding the legislative basis of the protection of IP rights. The decisions follow a series of similarly motivated Constitutional Court decisions that revoked provisions of Decree-Law 551 on Patents & Utility Models, Decree-Law 556 on Trademarks and the Copyright Act 5846 (for further information please see "Provision concerning invalidation of trademarks for non-use cancelled").
In Case 2015/49, the Constitutional Court decided to cancel Article 16(5) of Decree-Law 556 on Trademarks at the request of the Third IP Court of Ankara on the basis of Article 152 of the Constitution.(1)
Article 16(5) regulates the issue of assignment of trademarks and reads as follows:
"During the assignment (recordal) of a registered trademark, other trademarks identical or almost identical to the assigned trademark and registered in respect of goods and services identical or similar to those of the assigned trademark to the point of confusing/deceiving the public must also be assigned."(2)
The Third IP Court of Ankara requested the cancellation of Article 16(5) and Article 7(1)(b) on the grounds that both provisions apply to the principle of the single ownership of a trademark, and that Article 7(1)(b) and 7(1)(i),(3) – cited under absolute grounds for refusal – concern the rights of prior trademark holders, which are regulated in Article 8 under relative grounds for refusal.(4) The court further asserted that:
- the compulsory assignment requirement provided under Article 16(5) is tied to the principle of single ownership of a trademark as provided in Article 7(1)(b) and its application is a matter of public order; and
- Article 16(5) does not meet the requirements of the 'state of law', according to which rules should be applied equally and be predictable, objective and coherent.
Concluding that Article 16(5) does not meet the requirements of the state of law, the court requested the cancellation of this provision on the following grounds:
- Trademark rights are a property right regulated under Article 35 of the Constitution.(5) As such, "it is not possible to regulate matters concerning the assignment of trademarks and rights originating there from Decree-Laws". Referring to an earlier Constitutional Court decision,(6) the court asserted that Article 16(5) violates Articles 2 and 91 of the Constitution and should be cancelled.(7)
- The relative grounds concerning the establishment, restriction, assignment and protection of trademark rights have been regulated as absolute grounds in violation of the principle of the state of law of Article 2 of the Constitution.
- The court asserted that Article 16(5) is not consistent with Article 7(1)(b), as both concern the principle of the single ownership of a trademark, in the sense that the scope of Article 16(5) is wider because it encompasses the similarity of goods and services and that this scope goes beyond the rationale of the law. Considering that the terms similarity of goods and services which might confuse/deceive the public correspond more to Article 8(1)(b) on relative grounds for refusal – which is applicable upon opposition – the court deemed this provision to be too categorical, with undefined boundaries, and unsuitable to provide legal security. It thereby asserted that Article 16(5) goes beyond its aim not only for signs and trademarks, but also for goods or services, thus failing to meet the principles of legal certainty and proportionality.
- The court held that there had been a violation of the principle of freedom of work and contract (Article 48 of the Constitution). Referring to the EU Trademark Directive (89/104/EC) and EU Directive 2008/95/EC, which amended the former, the court stated that there is no provision in these directives that corresponds to Article 16(5) regarding compulsory assignment, as well as to the principle of single ownership of a trademark. Further, it stated that matters regarding the registration and assignment of trademarks are dealt with in a "totally liberal environment subject to market needs/conditions" on the basis of Article 48 of the Constitution within the context of freedom of work and contract.(8)
The court stated that Article 7(1)(b), which corresponds to Article 16(5), had been regulated in the EU directive under Article 4(1)(a) on relative grounds for refusal. The court asserted that on the basis of the same grounds, a further means to oppose has been recognised for the prior trademark right holder according to Article 8(1)(a) on relative grounds for refusal.
The Constitutional Court did not take into account the request for cancellation of Article 7(1)(b) and cancelled Article 16(5) for violating the Constitution. In its decision the Constitutional Court stated that a trademark right is a property right protected by Article 35 of the Constitution, and that the provision regarding the assignment of a registered trademark being related thereto is in violation of Article 91 of the Constitution, which prohibits the restriction or abolishment of a property right on the basis of a decree-law. As the decision was based on this ground only, the court did not address the other grounds for cancellation that had been put forward.
The positive impact of this decision on the Turkish Patent Institute is twofold:
- There will be no more compulsory assignment requests from the Patent Institute for the assignment and registration of trademarks applied for.
- A new route has been opened for all previous cases which, for various reasons, could not be finalised (ie, registered or assigned) by refiling new applications for their registration or assignment.
The grounds for cancellation put forward by the Third IP Court of Ankara have been extended to the wider issues of the state of law and freedom of work and contract. Similarly motivated requests are awaiting Constitutional Court decisions (eg, the cancellation of Article 7/1(b) of Decree-Law 556, which, if favourably received, would open the way for the registration of trademarks refused in the past under its provisions).
In Case 2015/33, the Constitutional Court decided to cancel Article 7(1)(i) of Decree-Law 556 at the request of the Third IP Court of Ankara on the basis of Article 152 of the Constitution.(9)
Article 7(1)(i) refers to Article 6bis of the Paris Convention and states that "the following signs shall not be registered as a trademark: trademarks, well known in the sense of the Article 6bis of the Paris Convention, which have not been authorized by their owners." The Court of Ankara stated that the absolute grounds for refusal cited in Article 7 relate to public order and should be considered ex offico by the Patent Institute for the registration of trademarks and by the court during litigation.
The court further stated that it is accepted in Turkish trademark law that the Patent Institute will not accept well-known trademarks for registration in the name of third parties regarding identical or similar goods. To benefit from the protection of Article 6bis of the Paris Convention, it is enough that the reputation be acknowledged in any convention country, including Turkey, and that worldwide reputation and use in the country are not required.(10) According to the court, the protection afforded by Article 6bis of the Paris Convention is limited to identical and similar goods of the trademark acknowledged as well known.
The court stated that the protection afforded to well-known marks has been extended to services by Article 16(2) of the Agreement on the Trade-Related Aspects of Intellectual Property Rights (TRIPs) and to goods and services other than those for which the trademark is registered by Article 16(3) of TRIPS.(11) In order to afford extended protection to "goods and services in other classes", the well-known trademark first needs to be registered in Turkey. The relationship of the subsequent trademark or application with the well-known trademark and the potential damage to the well-known trademark and its reputation must be assessed. The court maintained that Articles 7(1)(i) and 8(4) of Decree-Law 556 must be assessed together with Article 6bis of the Paris Convention and Article 16 of TRIPs. Further, the court asserted that the reputation acquired by a trademark is in itself not enough as a ground for refusal according to Article 8(4), and that at least one of the following three conditions mentioned therein needs to be present:
- taking unfair advantage of the reputation of the well-known trademark;
- damaging the reputation of the well-known mark; and
- harming the distinctive character (dilution) of the well-known mark.
Referring to the EU Trademark Directive (89/104/EC) and EU Directive 2008/95/EC, the court stated that there is no provision in these directives which corresponds to Article 7(1)(i), and that trademark application and registration matters, as well as oppositions, are assessed on the basis of the rights of prior trademark holders and dealt with in a "totally liberal environment subject to market needs/conditions" on the basis of Article 48 of the Constitution, within the context of freedom of work and contract.
The court asserted that on such grounds, well-known trademarks can be handled only according to the relative grounds for refusal pursuant to Article 8(4) of Decree-Law 556 upon opposition filed by the prior right holders, which is in compliance with the EU directive.
The Constitutional Court cancelled Article 7(1)(i) for violating the Constitution. It stated that a trademark right is a property right protected according to Article 35 of the Constitution, and that Article 91 of the Constitution prohibits regulation by decree-law of the fundamental rights and rights and duties of the individual, as provided in Sections 1 and 2 of Part II of the Constitution.
Besides cancelling Article 7(1)(i) of Decree-Law 556, the Constitutional Court stated that property rights cannot be regulated by decree-law. Potentially, this statement could have a much wider effect in the sense that the reasoning behind it could lead to the revocation of IP decree-laws in their entirety - not only for trademarks, but also for patents and utility models, designs and geographical indications, leaving IP protection in Turkey without a legal base.
The series of similarly motivated cancellation requests and ensuing Constitutional Court decisions have raised questions and fostered debate regarding the fate of Decree-Law 556 on Trademarks, Decree-Law 551 on Patents and Utility Models, Decree-Law 554 on Industrial Designs and Decree-Law 555 on Geographical Indications, which regulate and protect IP rights, and the enforceability of their provisions - particularly with regard to the issues of invalidity and the restriction of rights.
Any attempt for the partial or total invalidation or cancellation of IP rights regulated according to these decree-laws can be objected to and questioned in light of previous Constitutional Court decisions during court proceedings. This possibility has created legal uncertainty – especially in terms of court actions under prosecution – with respect to the enforceability of Turkish patents and utility models, design patents, trademarks and geographical indications on the basis of the existing decree-laws regulating them.
The draft of the act, which has been before Parliament for almost two years, aims to amend partially the existing decree-laws rather than replacing them in their entirety with new acts. As the amendments are unlikely to prevent the non-amended provisions of the decree-laws from being challenged as unconstitutional – in consideration of the Constitutional Court's recent decisions – the patchy approach being contemplated has already been revealed as ineffective and inappropriate. In order to remove the uncertainty concerning the effective enforcement of the decree-laws in force, it has become increasingly evident that they need to be replaced in their entirety with new and updated laws enacted through Parliament to give IP protection in Turkey a more solid, effective and predictable legal framework.
For further information on this topic please contact Mehmet Nazιm Aydιn Deris at Deris Attorneys At Law Partnership by telephone (+90 212 252 6122) or email ([email protected]). The Deris website can be accessed at www.deris.com.tr.
Endnotes
(1) Case 2015/49, Decision 2015/46, May 13 2015.
(2) Article 16 of Decree-Law 556 (Transfer of Trademark).
(3) Article 7 of Decree-Law 556 (Absolute Grounds for Refusal for Registration of a Trademark).
(4) Article 8 of Decree-Law 556 (Relative Grounds for Refusal for Registration of a Trademark).
(5) Article 35 of the Constitution (Right to property). For the full text of the Turkish constitution see global.tbmm.gov.tr/docs/constitution_en.pdf.
(6) Case 2013/147, Decision 2014/75, April 09 2014.
(7) Article 2 of the Constitution (Characteristics of the Republic) and Article 91 of the Constitution (Authorisation to issue decrees having the force of law).
(8) Article 48 of the Constitution (Freedom of work and contract).
(9) Case 2015/33, Decision 2015/50, May 27 2015.
(10) Article 6bis of the Paris Convention (Marks: Well-Known Marks).
(11) Article 16 of the Trade-Related Aspects of Intellectual Property Rights (Rights Conferred).
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