Well-known trademarks no longer absolute grounds for refusal
Registration applications for trademarks similar to well-known trademarks can no longer be refused on absolute grounds. In the second IP-related cancellation decision in one month, the Turkish Constitutional Court cancelled Article 7/1-(i) of Decree No. 556, On Protection of Trademarks, on May 27, 2015, at the request of the Ankara 3rd Court of Intellectual and Industrial Property Rights (the "IP Court"). Previously, we reported on the cancellation of Article 16/2, which revoked the Turkish Patent Institute's ("TPI") power to require those assigning a trademark to assign their similar trademarks in the same portfolio. Our previous alert can be found here. We expect more cancellations of other portions of the Trademark Decree to follow.
What does the cancelled provision say?
Article 7 of the Trademark Decree regulates absolute grounds for refusal. Absolute grounds are deemed a matter of public order; therefore, the TPI can reject trademark applications on its own initiative on absolute grounds. Article 7/1-(i) lists well-known trademarks as absolute grounds for refusal, so the TPI has been able to reject an application if a trademark is similar to a well-known trademark. With the cancellation of this provision, the TPI no longer has this ability.
Legal basis for cancellation
Following Turkish procedure where a constitutional issue is
raised, the IP Court filed an objection with the Constitutional
Court seeking cancellation of Article 7/1-(i) of the Trademark
Decree for unlawfully restricting fundamental rights and freedoms.
The IP Court reasoned that property rights can only be restricted
by a legislative act adopted by the parliament and not by a Council
of Ministers decree. Therefore, the restriction of property rights
violates the Turkish constitution.
The IP Court stated that Articles 7/1-(i) and 8/4 should be
interpreted together with TRIPs Article 16/2 and Article 6 bis of
the Paris Convention. According to international regulations, being
well-known is not sufficient for rejecting a new trademark; other
requirements should exist such as the likelihood of dilution and
risk of gaining unfair advantage from the well-known character.
Article 7/1-(i) also has no equivalent in EU Directive No.
2008/95/EC, which is the source of the Trademark Decree.
The IP Court also observed that trademark applications and
opposing a trademark based on prior rights are entirely related to
liberal, free-market economies, and fall under freedom of contract
in Article 48 of the Turkish constitution. Well-known trademarks
are also regulated under Article 8/4 as relative grounds for
refusal, which means the owner of a well-known trademark can file
an opposition to a new trademark application or file for revocation
on the same basis. Well-known trademarks, then, should only be in
the interest of the owner of the well-known trademark, and the
owner should decide whether to oppose a trademark application where
the conditions of Article 8/4 exist.
The Constitutional Court accepted the IP Court's reasoning and annulled Article 7/1-(i) in its entirety.
The Constitutional Court recently issued a similar decision,
annulling Articles 42/c and 16/2 of the Trademark Decree on the
same grounds — specifically, that only legislative acts can
restrict property rights, and the restriction of a property right
by decree violates the Turkish constitution. Turkey still has no
legislative acts for trademarks, patents, industrial designs,
geographical indications and utility models, all of which are only
regulated by decree. The cancellation of decree provisions raises
the risk of further Constitutional Court decisions based on
excessive and unlawful restriction of fundamental rights, including
property rights.
To address this situation, a draft law amending several IP-related
decrees is pending in the Turkish Parliament. With the piecemeal
annulment of the Trademark Decree, Turkey is in need of proper
legislation on intellectual property rights to ensure the integrity
of the overall legal regime governing their protection.
Implications for trademark owners
After cancellation of Article 7/1-(i), well-known trademarks are no longer matters of public order, and the TPI is no longer able to examine well-known trademarks on its own initiative for absolute grounds for refusal. Well-known trademark owners should, therefore, vigilantly monitor trademark applications for similar trademarks before they are registered. Turkish law grants immunity to trademarks upon registration, and a registered mark cannot be challenged on infringement grounds unless revoked by court decision. As a result, once a similar trademark is registered, the owner of the well-known trademark assumes the burden of pursuing a lengthy judicial action to revoke the registration.
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