IP in Business Transactions 2024 in Turkey - Part 1

IP Assignment

Assignment Basis and Formalities

1. On what basis can the main IPRs be assigned? What formalities apply?

Patents

Basis for patent assignment. Under the Intellectual Property Law No. 6769 (IP Law), a patent can be assigned in whole. A patent cannot be assigned in part.

Formalities for patent assignment. Under the IP Law, a patent assignment must be in writing and signed by both parties and notarised before a notary public.

Registration of a patent assignment with the Turkish Patent and Trademark Office (TPTO) is required for it to have effect against third parties. A short form of the assignment agreement is also accepted for recording purposes. The IP Law and its Implementing Regulation do not set a specific timeframe for registration. However, the assignment only has legal effect against third parties on registration and publication by the TPTO.

Utility Models

The same principles apply as for patents (see above, Patents).

Trade Marks

Basis for trade mark assignment. Trade marks can be assigned in whole or part for some of the goods or services for which the trade mark is registered. A trade mark assignment must be for the entire Turkish territory (IP Law).

Goodwill in the trade mark is automatically assigned (but the parties can agree otherwise).

Formalities for trade mark assignment. Under the IP Law, a trade mark assignment must be in writing and signed by both parties and notarised before a notary public.

Registration of a trade mark assignment with the TPTO is required for it to have effect against third parties. A short form of the assignment agreement is also accepted for recording purposes. The IP Law and its Implementing Regulation do not set a specific timeframe for registration. However, the assignment only has legal effect against third parties on registration and publication by the TPTO.

Copyright

Basis for copyright assignment. Only authors' economic rights can be assigned in whole or part under the Law on Intellectual and Artistic Works No. 5846 (Copyright Law).

The copyright holder cannot assign or waive their moral rights, but they can license the right to use their moral rights. Formalities for copyright assignment. An assignment of the author's economic rights must be in writing and the agreement must individually specify the rights being assigned (Article 52, Copyright Law).

There is no compulsory registration system for copyright in Turkey. There is a voluntary registration system with the Ministry of Culture and Tourism's General Directorate of Copyright. If the copyright to be assigned has already been registered voluntarily, the assignment must be notified to the Ministry. Voluntary registration may be helpful to prove the existence of the transactions and the scope, terms, and ownership of the copyright in the event of possible future disputes. There is no specific timeframe for voluntary registration.

Design Rights

Basis for design rights assignment. Design rights can be assigned in whole under the IP Law.

Assignment in part is only possible if the registration covers multiple designs. In this case, the owner can assign only some of the designs covered by the registration.

Formalities for design rights assignment. Under the IP Law, a design right assignment must be in writing and signed by both parties and notarised before a notary public.

Registration of a design right assignment with the TPTO is required for it to have effect against third parties. A short form of the assignment agreement is also accepted for recording purposes. The IP Law and its Implementing Regulation do not set a specific timeframe for registration. However, the assignment only has legal effect against third parties on registration and publication by the TPTO.

Trade Secrets and Confidential Information

Basis for assignment. Trade secrets and confidential information can be assigned by agreement in whole or part. There is no specific regulation on this. The agreement is an ordinary assignment agreement subject to the general rules of contract law.

Formalities for assignment. There are no specific formalities for an assignment of trade secrets and confidential information. It is recommended to have the agreement in writing and signed by both parties with undertakings about non-disclosure and confidentiality.

There is no system for registration of trade secrets and confidential information in Turkey.

Domain Names

Domain names can be assigned under Article 13 of the Domain Names Regulation.

A registry agency authorised by the Information and Communication Technologies Authority deals with applications, renewals, cancellations, and transfers of domain names and provides templates for domain name assignments on its website.

To assign a domain name, the domain name holder must fill in a template and the registry agency completes the assignment through the TRAB#S system, the central online system for domain names of the Information and Communication Technologies

Authority (Article 13, Domain Names Regulation). The TRABIS system was activated on 14 September 2022. If the domain name has a ".com.tr" extension, the registered trade mark or trade mark registration application that is the basis of the domain name registration must also be assigned.

It is advisable to have an assignment of a domain name in writing between the assignee and the assignor for evidentiary reasons.

From 14 June 2024, domain names with the "a.tr" structure continue to be allocated on a first come first serve basis as in the current system. The sale of "a.tr" domain names is prohibited until 14 September 2025.

Main Terms for Assignments

2.What main terms should be included in an assignment of IPRs?

The main terms to include in an assignment of IPRs are:

• Names and addresses of the parties.

• Registration numbers of registered IPRs, application numbers for registration applications, or any other form of identification of the IPRs.

• For a partial assignment, the scope of the assignment, relating to:

   • the goods and services for which a trade mark is assigned; or

   • the specific design rights assigned (in the case of multiple designs).

• Payment details (if any).

• An undertaking from the assignor (to prevent future disputes) that:

   • confirms that there are no other registrations or applications for the same or similar IPR(s);

   • confirms that there will be no further applications; and

   • warrants that the assignor has full power to assign the relevant IPR(s).

• Additional obligations to register the assignment (for example, any papers that the assignor must sign).

For copyright, an assignment of the author's economic rights should also contain the:

Rights to be assigned, expressly and separately stated using specific terms (for example, references such as "any media"must be avoided).

• Term of the assignment and the territory for which the rights are assigned, stated expressly.

IP Licensing

Scope and Formalities for IP Licensing

3. On what basis can the main IPRs be licensed? What formalities apply?

Patents

Scope of a patent licence. A patent licence is governed by the IP Law. Registered patents and patent applications can be licensed on an exclusive, non-exclusive, and sole basis.

Unless the patent owner reserves its rights to use the patent, the patent owner cannot use the patent if the owner grants an exclusive licence.

Depending on the nature of the invention protected by the patent and the scope of the independent claims, a patent can be licensed in part for some of the claims. A licence can include jurisdictional restrictions and time limits.

Formalities for a patent licence. A patent licence must be in writing and signed by both parties (IP Law). No notarisation is required. Parties are free to determine the terms of the licence.

A patent licence does not need to be registered with the TPTO to be valid and enforceable. However, registration is beneficial for the licensee if the patent is assigned to a third party who is not aware of (and not able to discover) the licence. In these cases, if the patent licence is registered the licensee can enforce the licence against the third-party assignee.

The IP Law and the Implementing Regulation do not set a specific timeframe for patent licence registration.

Utility Models

The same principles apply as for patents (see above, Patents).

Trade Marks

Scope of a trade mark licence. Registered trade marks and trade mark registrations application can be licensed on an exclusive, non-exclusive, and sole basis (IP Law). Unless the trade mark owner reserves its rights to use the trade mark, the trade mark owner cannot use the trade mark if the owner grants an exclusive licence.

Trade marks can be licensed in whole or part for some or all of the goods and services for which the owner uses the mark. The parties can agree on jurisdictional restrictions and time limits. The parties are free to determine the terms of the licence.

A trade mark licence automatically include the goodwill in the trade mark (but the parties can agree otherwise).

Formalities for a trade mark licence. Under the IP Law, a trade mark licence must be in writing and signed by both parties.

No notarisation is required. Parties are free to determine the terms of the licence.

A trade mark licence does not need to be registered with the TPTO for it to be valid and enforceable. However, registering the licence is beneficial for the licensee if the trade mark is assigned to a third party who is not aware of (and not able to discover) the licence. In these cases, if the trade mark licence is registered, the licensee can enforce the licence against the third-party assignee.

The IP Law and the Implementing Regulation do not set a specific timeframe for trade mark licence registration.

Copyright

Scope of a copyright licence. Under the Copyright Law, both the economic and moral rights of the author can be licensed on an exclusive, non-exclusive, and sole basis. Copyright can be licensed in whole or part. The parties can agree on jurisdictional restrictions and time limits. The parties are free to determine the terms of the licence.

The copyright holder cannot assign or waive their moral rights. Therefore, a copyright licence cannot include a moral rights waiver. However, it is possible to license the right to use the author's moral rights.

Formalities for a copyright licence. A licence of the author's economic rights and moral rights must be in writing and signed by both parties. The relevant right being assigned must be specified individually. (Article 52, Copyright Law.)

There is no compulsory registration system for copyright in Turkey. There is a voluntary registration system with the Ministry of Culture and Tourism's General Directorate of Copyright. If the copyright to be licensed has been registered voluntarily, the licence must be notified to the Ministry. Voluntary registration may be helpful to prove the existence of the transaction and the scope, terms, and ownership of the copyright in the event of future disputes. There is no specific timeframe for voluntary registration of a copyright licence.

Design Rights

Scope of a design rights licence. Under the IP Law, registered designs and applications for registered designs can be licensed on an exclusive, non-exclusive, and sole basis.

Design rights can be licensed in whole or part. A partial licence is only possible if the registration covers multiple designs and the owner licenses some of the designs covered by the registration. The parties can freely agree on jurisdictional restrictions and time limits.

Formalities for a design rights licence. A design licence must be in writing and signed by both parties (IP Law). No notarisation is required. Parties are free to determine the terms of the licence.

A design right licence does not need to be registered with the TPTO for it to be valid and enforceable. However, registering the licence is beneficial for the licensee if the design right is assigned to a third party who is not aware of (and not able to discover) the licence. In these cases, if the design licence is registered, the licensee can enforce the licence against the thirdparty assignee of the design.

The IP Law and the Implementing Regulation do not set a specific timeframe for the registration of design rights licences.

Trade Secrets and Confidential Information

Scope of a licence. Trade secrets and confidential information can be licensed on an exclusive, non-exclusive, and sole basis.

They can be licensed by agreement in whole or part, with jurisdictional restrictions and time limits as the parties wish. No specific regulation applies and the licence is subject to the general rules of contract law.

Formalities for a licence. There are no specific formalities for a licence of trade secrets and confidential information. However, it is recommended to have a written agreement that clearly defines the scope of the licence and includes appropriate provisions to maintain confidentiality.

Main Terms for Licences

4. What main terms should be included in an IP licence?

The main terms that should be included in an IP licence are:

• Names and addresses of the parties.

• Registration numbers of registered IPRs, application numbers for registration applications, or any other form of identification of the IPRs.

• For a partial licence, the scope of the licence, concerning:

   • the goods and services for which a trade mark is licensed; and

   • the design rights being licensed (in the case of multiple designs).

• Licence term and territory for which the licence is granted.

• Whether the licence is granted on an exclusive, non-exclusive, or sole basis (if the licence is silent on this, it is assumed to be non-exclusive).

• Powers granted to the licensee, for example, whether a sub-licence is allowed (if the licence is silent on this, it is deemed that sub-licensing is not allowed).

• Royalties (if any).

• Warranties and liability provisions.

• Obligations to record the licence.

• Other general business terms, depending on the relationship between the parties, including clauses on:

   • governing law;

   • jurisdiction;

   • penalties; and

   • confidentiality.

To license an author's moral and economic rights, the licence agreement must expressly and individually the rights being licensed using specific terms (for example, references such as "any media" must be avoided).

Depending on the nature of the technology or IP developments being licensed, government permits may be required (see Question 21).

Research and Development Collaborations

Improvements and Derivatives

5. How should research and development collaborations address improvements and derivatives?

There is no specific law or regulation on IPRs subsisting in improvements or derivatives arising from research and development (R&D) collaborations. Therefore, it is essential to carefully set them out in the collaboration agreement.

Collaboration agreements should clearly and specifically define improvements/derivatives to avoid any future confusion or dispute. While in some cases key definitions such as know-how, material, and product also cover improvements/derivatives, it is advisable to include a separate definition of an improvement/derivative in the agreement.

Under the Copyright Law, the right to exploit a work by adaptation belongs exclusively to the author. Similarly, under the IP

Law, use of a patented invention is subject to permission or licence from the right owner. In these cases, a party who wants to use the IPR of another party while creating improvements/derivatives must obtain permission or a licence from the right owner.

It is particular important to determine the ownership of IPRs resulting from improvements/derivatives. In practice, there is a fine line between an improvement/derivative and the contribution/effort of each party to generate it. It may be problematic to determine who owns the IPRs resulting from improvements/derivatives without a term in the agreement. In principle, it is possible to apportion these IPRs according to the contribution of each party. Parties can also decide to vest these IPRs in a specific party, regardless of their contribution. Whether improvements/derivatives are patentable/copyrightable or not, including separate terms about their ownership before engaging in a project is highly advisable.

To realise the intended objectives of a collaboration project, it is important to include terms that allow both parties to use the subject matter of the improvements/derivatives in the context of the project, regardless of IPR ownership.

However, terms that regulate how to apportion/assign the ownership of these IPRs may breach antirust and competition rules, depending on the circumstances. For example, under the Law on the Protection of Competition No. 4054, agreements, decisions, and practices that prevent, distort, or restrict competition between undertakings and abuse of dominant positions are examples of unfair competition. If a dominant party uses its superior position to have all the IPRs assigned to it, this may raise antitrust issues. In this case, the assignee may consider offering reasonable compensation or a licence of the IPRs to the assignor.

Joint Ownership of IP

6. How does joint ownership of IP arise?

Joint ownership of IP can arise from various commercial alliances/collaborations and by operation of law.

Under the IP Law, IP is jointly owned if an invention or design (and under the Copyright Law, a work) has been created as a result of joint intellectual efforts of two or more parties (see Question 7).

Under the IP Law, if an IPR belongs to more than one party, the IPR ownership is determined according to the agreement between the parties. If there is no agreement, the default provisions of the Civil Code (Law 4721) under the Law of Property section on joint ownership apply. As these provisions are insufficient because they are very generic, it is advisable to conclude a joint ownership agreement to cover specific needs for IPRs (see Question 7).

7. What key issues arise in terms of the parties' rights to exploit and enforce jointly owned IP? How should these issues be dealt with in the agreement between the parties?

Exploiting and Enforcing Jointly Owned IP

The starting point is the agreement between the joint owners of the IPRs relating to prosecution and maintenance, licensing and other exploitation, enforcement, and termination of the IPRs (see Question 6).

If there is no such agreement, the Law of Property section of the Civil Code sets out default rules for joint ownership of IPRs.

If the share of each owner is separable, each owner owns their share and can:

• Exploit the rights freely relating to their share.

• Use their share of the IPR freely.

• Take necessary measures to protect their share.

If one of the owners wants to sell their share to a third party, the sale must be notified to the other owners as they have a preemption right.

Each owner can bring legal infringement proceedings against third parties (Articles 689 to 697, Civil Code).

To license a jointly owned IPR, the right holders must reach an agreement. If not, any of them can apply to court for a decision to authorise one or more of them to license the IPR on an equitable basis (with regard to the specific circumstances) (Articles 689 to 697, Civil Code).

While the law sets out some rules about the exploitation and enforcement of jointly owned IPRs, it is difficult to apply them and they do not provide an effective basis for IPR exploitation and enforcement. It is therefore advisable for joint owners to decide on the terms in an agreement and to authorise one joint owner for the purposes of exploitation and enforcement.

Joint Ownership Provisions in Collaboration Agreements

A collaboration agreement should include the following:

• Clear definition of the contributed IP that each party brings to the collaboration (background IP).

• Clear definition of the jointly created IP generated by the collaboration and/or improvements/derivatives.

• Apportioning and determining ownership of jointly created IP and/or improvements/derivatives (see Question 5).

• Prosecution and maintenance of jointly created IPRs subject to the collaboration, such as defining the party responsible for the registration and renewal of IPRs used, payment of the relevant fees, and corresponding with the competent authorities.

• Licensing and other IPR exploitation. It is important to determine the scope of use of the jointly created IPRs by each party. If one party is willing to solely hold all the IPRs, reasonable compensation should be paid to the other party by allowing use of the IPRs in the scope of the project. During the commercialisation of the IPRs, it is practical to identify the authorised party who will grant licences to third parties and include a specific mechanism for these purposes.

• Enforcement of IPRs against third parties and defences against legal claims by third parties. It is important to identify the authorised party and the mechanism to duly protect the jointly created IPRs.

• Termination of the relationship and assignment or separation of the joint IPRs on termination.

• Confidentiality provisions.

IP Audit

8. What are the main steps in conducting an IP audit in your jurisdiction to determine the content of an IP portfolio?

The following steps are usually taken to determine the content of an IP portfolio:

• Listing all the IPRs of a business (see Question 9).

• Verifying the status of IPRs, including examining pending or potential conflicts, licences, and other agreements.

First published by Practical Law in Sep 13, 2024.

Link: https://uk.practicallaw.thomsonreuters.com/8-617-3217