Can Right Owners Enjoy Cumulative Protection in Turkey?

It has been a running debate on whether trademark protection legislation under the Turkish IP Code can be classified as a special provision of the unfair competition clauses under the Turkish Commercial Code (TCC) and whether the right owners can enjoy a cumulative protection both under the IP Code and TCC.

The former Commercial Code no. 6762 defined unfair competition as "Trying to create confusion with a third party’s commodity, business products, activity or commercial enterprise, or taking appropriate measures, especially in a way that may cause confusion through means of identification such as name, title, trademark, sign etc”.

With the new Commercial Code entered into force on July 01, 2021 the definition of unfair competition has changed as “Taking precautions that prevent confusion with the goods, products, activities or works of others”, excluding the reference to “trademarks” covered by the former Commercial Code.

The former Commercial Code no. 6762 defined unfair competition as "Trying to create confusion with a third party’s commodity, business products, activity or commercial enterprise, or taking appropriate measures, especially in a way that may cause confusion through means of identification such as name, title, trademark, sign etc”Therefore, such regulation has brought debates alongside on whether the law-maker’s intention in excluding the “trademark” reference within the new Commercial Code is to protect trademark rights under the IP Code and whether the right owners can still enjoy cumulative protection for unfair competition clauses as well.

During the debates were ongoing, 11th Chamber of the Supreme Court issued a decision under the no.2019/5189 E., 2022/1852 K. dated 14.03.2022. In the subject case, the plaintiff who operates in the pharmaceutical sector and owns the ‘’UBISTESIN’’ and ‘’UBISTESIN FORTE’’ trademarks claimed that the defendant’s "BUSTESIN" trademark creates confusion risk among the consumers and creates trademark infringement and unfair competition against the plaintiff company.

The defendant claimed that the trademarks differ in visual and conceptual manners and that since both trademarks address to professional doctors and healthcare personnel, there is no unfair competition between the parties.

The First Instance Court decided that there is confusion risk between the trademarks of the parties and accepted the plaintiff’s trademark infringement claims, but rejected the unfair competition claims and both parties filed an appeal against the decision before the Regional Court of Appeal.

The Regional Court stated that the First Instance Court’s decision rejecting the unfair competition claims of the plaintiff is unlawful and therefore, reversed the decision by accepting the plaintiff’s unfair competition claims. The decision was then appealed before the Supreme Court by the defendant.

The Supreme Court has issued its decision stating that:

• Since the former Commercial Code defined using a third party trademark in a confusingly similar way as an act of unfair competition, trademark rights were cumulatively protected under trademark infringement and unfair competition clauses.
• However, the new Commercial Code regulates the unfair competition protection as “Taking precautions that prevent confusion with the goods, products, activities or works of others”
• The law maker intentionally removed the “trademark” reference from the unfair competition clause as trademark rights are protected under the IP Law which is a special provision and emphasized that protection of trademark rights under the unfair competition provisions is unnecessary and will lead to difficulties in interpretation.
• Therefore, the Supreme Court cannot apply the prior precedents anymore and the Regional Court’s decision stating that the defendant's actions constitute unfair competition in accordance with Article 55/1-a-4 of the Turkish Commercial Code was not deemed appropriate and reversed in favor of the appellant.

The decision had a big impact on the ongoing court actions where the right owners sought cumulative protection under the unfair competition and trademark infringement clauses and the First Instance Courts started to issue parallel decisions.

Then, the same Chamber issued a new decision on December 28, 2022 under the no. 2021/4883E2022/9613K, stating that:

• The reasoning of the unfair competition clauses within the new Commercial Code and the formal Commercial Code are actually the same.
• Confusion regarding distinctive signs, together with its conditions, provisions and consequences, are regulated under the special law (IP Code No. 6769). Therefore, repeating and referencing the same under the Commercial Code is unnecessary and causes difficulties in interpretation.
• In addition, it is not mandatory for the unfair competition clauses to reference “trademarks” in order to apply the same in case of trademark infringement.
• Therefore, it is accepted that the defendant’s actions in bad faith caused trademark infringement and unfair competition against the plaintiff.

While the two decisions of the Supreme Court are contradicting with each other, during the IP Policy Dialogue on September 20, 2023 (organized by INTA together with Turkish Patent and Trademark Office) the Judge of 11th Chamber of Supreme Court has stated that they adopted the cumulative protection approach at the final stage.

Still, we see that the First Instance Courts issue decisions on both sides depending on the conditions of the subject cases and which precedent of Supreme Court is adopted by the First Instance Court Judges.

Another aspect of the cumulative protection that needs to be considered is that unfair competition can occur not only by a direct trademark infringement, but also under different scopes of IP violations such as using a similar packaging and trade dress, similar outline of products, similar color combinations etc. In such cases, the trademark owner has the right to apply to general provisions of the Commercial Code regulating unfair competition.

In addition, the provisions of the IP Law are only applicable if there is a valid trademark registration before the Turkish Patent and Trademark Office. In other words, if the trademark is not registered before the TPTO, the owner of the unregistered trademark cannot seek protection in Turkey according to the provisions of the IP Law. However, it is possible for the right owners to rely on unfair competition provisions despite having a trademark registration.