A party must disclose all evidence that it intends to rely on. A party is not required to disclose all relevant documents in its possession but must only provide documents that it deems appropriate. Parties must act in good faith and state the truth (Article 29, CPC).

Litigation and Enforcement 2023 in Turkey - 2

Beril Yayla Sapan joined the firm in 2008 and became a partner in 2021. Her practice focuses on employment, dispute management, business crime and anti-corruption and administrative, tax and regulatory areas.Beril advises on employment contracts and policies, confidentiality and restrictive covenants, collective bargaining agreements, employee related data protection, business immigration, terminations, collective redundancies, and settlement. She also represents clients in litigation relating to termination, employment-related debts, mobbing and discrimination claims.Beril handles high-profile commercial conflicts including those arising from unfair competition, distribution relationships and corporate structure along with complex debt collection proceedings. She successfully represents clients before the commercial and administrative courts.She is also experienced in areas where commercial and criminal laws overlap and advises several multinational companies on white collar crime, compliance, and legal audits. Practice Areas &amp; Work DepartmentEmploymentDispute ManagementBusiness Crimes and Anti-CorruptionAdministrative, Tax and Regulatory LanguagesEnglishTurkish MembershipsEthics &amp; Reputation Society (TEID), Board MemberInternational Bar Association (IBA)

Gün + Partners was founded in 1986 and is one of the largest law firms in Turkey with 13 partners and over 70 lawyers. The firm is based in Istanbul and provides transactional, advisory, and dispute management services to local and international companies throughout Turkey and assists clients worldwide through its established network of correspondents and contacts.The firm's core areas of expertise are corporate and commercial, dispute management, and intellectual property. It represents clients in numerous industry sectors with a particular focus on life sciences, insurance and reinsurance, energy, construction and real estate, logistics, technology, media and telecoms, automotive, FMCG, chemicals and the defence industries.

Gün + Partners

Partner

Asena Aytuğ Keser has been with the firm since 2011 and is a managing associate. Her practice focuses on dispute management; business crime and anti-corruption; employment; insurance and reinsurance; administrative, tax and regulatory and construction and real estate.Asena advises and represents both national and international clients in various commercial and corporate disputes before courts and arbitral tribunals, including high profile compensation cases, M&amp;A and shareholders disputes, real estate and construction disputes and enforcement of foreign court judgments and arbitral awards. She has a specific focus on business crimes and she handles various disputes where the dispute contains the application of both civil and criminal law principles.&nbsp;Asena also represents many clients in regulated markets and her experience in dispute management also expands to administrative and tax law related disputes.She is also experienced in employment law. She provides consultancy and represents clients in relation to a wide range of employment law issues including preparation and negotiation of employment contracts, terminations, personnel management, reemployment and unjust competition actions.Combining her experience in dispute management with insurance law, Asena focuses on the litigation aspect of the firm’s insurance &amp; reinsurance practice. She represents and advises many clients in both local and London insurance market, loss adjusters, international law firms and brokers for handling and management of disputes concerning various types of insurance, carrying out settlement processes, assessment of claim amount and liability of respected parties as well as of policy coverage. Practice Areas &amp; Work DepartmentDispute ManagementEmploymentBusiness Crimes and Anti-CorruptionInsurance and ReinsuranceAdministrative, Tax and RegulatoryConstruction and Real Estate LanguagesEnglishTurkish

Managing Associate

&lt;ul style="list-style-type: square;">&lt;li style="margin-left: 20px; text-align: justify;">&lt;span style="font-family: Arial, Helvetica, sans-serif; font-size: 14px;">Cumulative protection is no longer available in light of a recent Court of Cassation decision&lt;/span>&lt;/li>&lt;li style="margin-left: 20px; text-align: justify;">&lt;span style="font-family: Arial, Helvetica, sans-serif; font-size: 14px;">Trademarks are protected under the IP Code, but “name[s], title[s] or trademark[s]” are not covered by the unfair competition provisions under the new Commercial Code&lt;/span>&lt;/li>&lt;li style="margin-left: 20px; text-align: justify;">&lt;span style="font-family: Arial, Helvetica, sans-serif; font-size: 14px;">The decision will have a serious impact on pending cases&lt;/span>&lt;/li>&lt;/ul>&lt;p style="text-align: justify;">&lt;span style="font-family: Arial, Helvetica, sans-serif; font-size: 14px;">In a recent decision that challenges longstanding precedents, the Court of Cassation has ruled that, in cases where trademark infringement has been found, it is no longer possible to accept that the same infringing act also creates unfair competition.&lt;/span>&lt;/p>&lt;p style="text-align: justify;">&lt;span style="font-family: Arial, Helvetica, sans-serif; font-size: 14px;">&lt;strong>Background&lt;/strong>&lt;/span>&lt;/p>&lt;p style="text-align: justify;">&lt;span style="font-family: Arial, Helvetica, sans-serif; font-size: 14px;">In a civil court action involving pharmaceutical companies, the plaintiff argued that the defendant used a mark that was confusingly similar to its registered trademarks for the same or similar goods in Class 5. The plaintiff requested:&lt;/span>&lt;/p>&lt;ul style="list-style-type: square;">&lt;li style="margin-left: 20px; text-align: justify;">&lt;span style="font-family: Arial, Helvetica, sans-serif; font-size: 14px;">a determination of trademark infringement and unfair competition;&lt;/span>&lt;/li>&lt;li style="margin-left: 20px; text-align: justify;">&lt;span style="font-family: Arial, Helvetica, sans-serif; font-size: 14px;">the prevention and cessation of the defendant’s infringing use; and&lt;/span>&lt;/li>&lt;li style="margin-left: 20px; text-align: justify;">&lt;span style="font-family: Arial, Helvetica, sans-serif; font-size: 14px;">a preliminary injunction order to prevent the defendant from using the infringing mark until the finalisation of the case.&lt;/span>&lt;/li>&lt;/ul>&lt;p style="text-align: justify;">&lt;span style="font-family: Arial, Helvetica, sans-serif; font-size: 14px;">The first-instance court accepted the plaintiff’s requests and issued a preliminary injunction order at the beginning of the case to prevent the defendant’s infringing use. The court then decided to uphold the trademark infringement claims, but dismissed the unfair competition claims on the grounds that the plaintiff should not benefit from the protection afforded by the unfair competition provisions in addition to that afforded by the trademark infringement provisions.&lt;/span>&lt;/p>&lt;p style="text-align: justify;">&lt;span style="font-family: Arial, Helvetica, sans-serif; font-size: 14px;">Both parties appealed the decision before the Regional Court of Appeals. The Regional Court of Appeals decided to accept the plaintiff’s appeal on the ground that the defendant’s acts created unfair competition, because the defendant continued to use the infringing mark despite the refusal of its application for registration of that mark by the Turkish Patent and Trademark Office. The refusal was based on the ground that the defendant’s trademark application was similar to the plaintiff’s registered trademarks to the extent that it created a likelihood of confusion, and was incompatible with the good-faith principle under the Turkish Commercial Code. The defendant appealed to the Court of Cassation.&lt;/span>&lt;/p>&lt;p style="text-align: justify;">&lt;span style="font-family: Arial, Helvetica, sans-serif; font-size: 14px;">&lt;strong>Court of Cassation Decision&lt;/strong>&lt;/span>&lt;/p>&lt;p style="text-align: justify;">&lt;span style="font-family: Arial, Helvetica, sans-serif; font-size: 14px;">&lt;span style="font-size: 14px;">In a decision dated 14 March 2022 (No 2019/5189 E 2022/1852 K), the Court of Cassation overruled the decision of the Regional Court of Appeals on the ground that, as trademarks are protected under the Intellectual Property Code (No 6769) (and the former Decree Law No 556 on the Protection of Trademarks), the trademark infringement acts were protected cumulatively under the relevant articles of the Commercial Code No 6762; the relevant article of the Commercial Code No 6102 (‘&lt;/span>&lt;strong>new Commercial Code&lt;/strong>&lt;span style="font-size: 14px;">’) states that acts that lead to confusion with the goods, work products, activities or businesses of others creates unfair competition, but does not include the protection of a “name, title or trademark” on purpose, as trademarks are already protected by the trademark infringement provisions of the IP Code. Therefore, it is not necessary to also protect trademarks under the unfair competition provisions under the new Commercial Code.&lt;/span>&lt;/span>&lt;/p>&lt;p style="text-align: justify;">&lt;span style="font-family: Arial, Helvetica, sans-serif; font-size: 14px;">Following the decision of the Court of Cassation, the case file was returned to the Regional Court of Appeals. The latter decided to comply with the decision of the Court of Cassation, upheld the case only in terms of the trademark infringement claims and dismissed the unfair competition claims. The parties did not appeal the decision and the case was recently finalised.&lt;/span>&lt;/p>&lt;p style="text-align: justify;">&lt;span style="font-family: Arial, Helvetica, sans-serif; font-size: 14px;">&lt;strong>Comment&lt;/strong>&lt;/span>&lt;/p>&lt;p style="text-align: justify;">&lt;span style="font-family: Arial, Helvetica, sans-serif; font-size: 14px;">The fact that the Court of Cassation changed its longstanding precedents has come as a surprise to practitioners: the court stated that it is no longer possible to maintain its previous precedents on the cumulative protection afforded by the trademark infringement and unfair competition provisions, as trademarks are protected under the IP Code (and the former Decree Law) and “name[s], title[s] or trademark[s]” are not covered by the scope of the unfair competition provisions under the new Commercial Code. It is noteworthy that the new code entered into force in 2012; however, until recently the Court of Cassation had upheld all decisions where such cumulative protection had been accepted in similar cases. In addition, there has been no recent change in the legislation that would explain the Court of Cassation’s decision.&lt;/span>&lt;/p>&lt;p style="text-align: justify;">&lt;span style="font-family: Arial, Helvetica, sans-serif; font-size: 14px;">The finalised decision will have a serious impact on pending cases. Some courts have already started to dismiss unfair competition claims in similar infringement actions on the ground that cumulative protection is no longer available in light of the Court of Cassation’s decision. Arguably, this decision cannot be considered as a precedent in all cases where trademark infringement and unfair competition claims are brought together, and there needs to be a distinction between these cases - even though the Court of Cassation did not make one in its reasoning.&lt;/span>&lt;/p>&lt;p style="text-align: justify;">&lt;span style="font-family: Arial, Helvetica, sans-serif; font-size: 14px;">For instance, if there is infringing use of a registered trademark on a product, but the product packaging is not similar to the rights owner’s products, then the infringing use should be prevented under the IP Code. It is thus sufficient to bring only trademark infringement claims; otherwise, the courts will likely dismiss the unfair competition claims in light of the Court of Cassation’s recent decision.&lt;/span>&lt;/p>&lt;p style="text-align: justify;">&lt;span style="font-family: Arial, Helvetica, sans-serif; font-size: 14px;">However, in cases where the defendant is using a similar trade dress, or discrediting or making false statements/publications about the plaintiff or its products, activities or business, the protection afforded by the unfair competition provisions should still be available, in addition to that afforded by the trademark infringement provisions, because such acts would fall within the scope of the unfair competition provisions under the Commercial Code.&lt;/span>&lt;/p>&lt;p style="text-align: justify;">&lt;span style="font-family: Arial, Helvetica, sans-serif; font-size: 14px;">In light of the above, before initiating a civil court action based on trademark infringement and unfair competition, the possible existence of additional factor(s) that may be considered as acts of unfair competition which do not fall within the scope of the IP Code should be assessed carefully.&lt;/span>&lt;/p>&lt;hr>&lt;p style="text-align: justify;">&lt;span style="font-family: Arial, Helvetica, sans-serif; font-size: 14px;">&lt;em>First published by WTR in 17.03.2023.&lt;/em>&lt;/span>&lt;/p>

In a recent decision that challenges longstanding precedents, the Court of Cassation has ruled that, in cases where trademark infringement has been found, it is no longer possible to accept that the same infringing act also creates unfair competition.

Court of Cassation Overturns Longstanding Precedents on Cumulative Protection Afforded by Trademark Infringement and Unfair Competition Provisions

&lt;p style="text-align: justify;">&lt;span style="font-family: Arial, Helvetica, sans-serif; font-size: 14px;">&lt;span style="font-size: 14px;">Pharmaceutical prices in Turkey have always been one of the most controversial issues. The prices of medicines that are to be marketed are set under the Decision on Pricing of Human Medicinal Products (“&lt;/span>&lt;strong style="font-size: 14px;">Decision&lt;/strong>&lt;span style="font-size: 14px;">&lt;span style="font-size: 14px;">”) and the Communiqué on the Pricing of Human Medicinal Products (“&lt;/span>&lt;strong>Communiqué&lt;/strong>&lt;span style="font-size: 14px;">”) of September 29, 2017, issued by the Ministry, which is vested with the competencies to regulate this area.&lt;/span>&lt;/span>&lt;/span>&lt;/p>&lt;p style="text-align: justify;">&lt;span style="font-family: Arial, Helvetica, sans-serif; font-size: 14px;">&lt;span style="font-size: 14px;">&lt;span style="font-size: 14px;">The Decision provides a reference pricing system, whereby the least-expensive ex-factory price in one of the listed EU countries for the relevant product is taken as the ex-factory price in Turkey. The currency is then converted into Turkish liras; however, this transaction is done at a fixed value every year so that it is not affected by fluctuations in the exchange rates. Thus, the exchange rate applied to the reference price taken from the respective EU country is fixed for one year, and the price reached is considerably lower than the current exchange rate.&lt;/span>&lt;/span>&lt;/span>&lt;/p>&lt;p style="text-align: justify;">&lt;span style="font-family: Arial, Helvetica, sans-serif; font-size: 14px;">&lt;span style="font-size: 14px;">&lt;span style="font-size: 14px;">With the Decision entered into force in 2017, the rate was determined as 60% of the average euro value of the previous year. Accordingly, the main rule is that the Price Evaluation Commission gathers in the first 45 days of each year and announces the value of euro 1 based on a calculation of 60% of the average value in the previous year.&lt;/span>&lt;/span>&lt;/span>&lt;/p>&lt;p style="text-align: justify;">&lt;span style="font-family: Arial, Helvetica, sans-serif; font-size: 14px;">&lt;span style="font-size: 14px;">&lt;span style="font-size: 14px;">According to this rule, on February 14, 2022, the exchange rate to be used in the pricing of medicines was set as TL 6.2925. However, due to the rapid change in the exchange rate in 2022, with the provisional article added to the Decision, on July 8, 2022, the value of 1 Euro was increased by 25%, and the new exchange rate was set as TRY 7.8656. Subsequently, on December 14, 2022, the value of 1 Euro in Turkish Lira to be used in the pricing of pharmaceutical products for human use was increased by 36.77% to TL 10.7577 in December 2022.&lt;/span>&lt;/span>&lt;/span>&lt;/p>&lt;p style="text-align: justify;">&lt;span style="font-family: Arial, Helvetica, sans-serif; font-size: 14px;">&lt;span style="font-size: 14px;">&lt;span style="font-size: 14px;">For 2023, it was stated that this last amount would continue to be applied and that the Price Evaluation Commission would not announce a new value in the first 45 days of the year. However, although it has not been regulated in the legislation yet, one can expect an increase to be made again in 2023 due to the fluctuations in the current exchange rate.&lt;/span>&lt;/span>&lt;/span>&lt;/p>

Pharmaceutical prices in Turkey have always been one of the most controversial issues. The prices of medicines that are to be marketed are set under the Decision on Pricing of Human Medicinal Products and the Communiqué on the Pricing of Human Medicinal Products of September 29, 2017, issued by the Ministry, which is vested with the competencies to regulate this area.

Pricing of Pharmaceuticals and the Fixed Exchange Rate

&lt;p style="text-align: justify;">&lt;span style="font-family: Arial, Helvetica, sans-serif; font-size: 14px;">The grounds for the invalidation of a patent within the scope of Industrial Property Law No. 6769 are listed per the numerus clausus principle. The concept of plausibility – which has been the subject of numerous evaluations, especially by the European Patent Office (“EPO”) and frequently debated in academic circles in recent years – has not yet found a place within the scope of any legal regulation in Turkey. Moreover, there is no consensus on the Turkish wording that meets this concept as a legal term.&lt;/span>&lt;/p>&lt;p style="text-align: justify;">&lt;span style="font-family: Arial, Helvetica, sans-serif; font-size: 14px;">However, the concept of plausibility has started to be argued by the plaintiffs in Turkish invalidity proceedings and has been the subject of important conclusions by the EPO Enlarged Board of Appeal within the scope of application No. G 2/21, so the place of the concept of plausibility in Turkish legal practice must be scrutinized.&lt;/span>&lt;/p>&lt;p style="text-align: justify;">&lt;span style="font-family: Arial, Helvetica, sans-serif; font-size: 14px;">&lt;span style="font-size: 14px;">Plausibility can be defined as the ability to demonstrate the technical effect claimed by the invention credibly and convincingly with appropriate evidence to be submitted or to deduce this situation from the state of the art or common general knowledge to avoid speculative patents that can be produced at the desk (&lt;/span>&lt;em>Türk Patent Hukuku, Uğur Çolak, Adalet Yayınevi, Ankara, 2022;&nbsp;A Practitioner’s Guide to European Patent Law, Paul England, Hart Publishing, London, 2019&lt;/em>&lt;span style="font-size: 14px;">).&lt;/span>&lt;/span>&lt;/p>&lt;p style="text-align: justify;">&lt;span style="font-family: Arial, Helvetica, sans-serif; font-size: 14px;">The requirement of plausibility, which is not defined as one of the invalidation grounds in the law, is particularly an issue concerning pharmaceutical patents. However, not all the test data of clinical studies may be obtained by the patent application date due to the long duration of efficacy tests and their complicated processes.&lt;/span>&lt;/p>&lt;p style="text-align: justify;">&lt;span style="font-family: Arial, Helvetica, sans-serif; font-size: 14px;">Therefore, considering the necessity of making a patent application as soon as possible to avoid any loss of rights, there are issues around how much data indicating that the invention is applicable and working should be included in the patent application and to what extent post-published evidence can be used.&lt;/span>&lt;/p>&lt;p style="text-align: justify;">&lt;span style="font-family: Arial, Helvetica, sans-serif; font-size: 14px;">In other words, the concept of plausibility can be regarded primarily as a prohibition of speculative patent applications which do not disclose a technical effect of a chemical substance and/or disclose a technical effect which is not normally expected.&lt;/span>&lt;/p>&lt;p style="text-align: justify;">&lt;span style="font-family: Arial, Helvetica, sans-serif; font-size: 14px;">Although the lack of this requirement is not one of the invalidation grounds stipulated in Turkish legislation, in the Agreement on Trade-Related Aspects of Intellectual Property Rights or the European Patent Convention, to which Turkey is a party, it can be alleged in invalidation actions by asserting in the context of “sufficiency of disclosure” or “lack of inventive step”.&lt;/span>&lt;/p>&lt;p style="text-align: justify;">&lt;span style="font-family: Arial, Helvetica, sans-serif; font-size: 14px;">Indeed, where the concept of plausibility has been used as an invalidation ground before the intellectual and industrial rights law courts, the allegations on this issue were included under both headings.&lt;/span>&lt;/p>&lt;p style="text-align: justify;">&lt;span style="font-family: Arial, Helvetica, sans-serif; font-size: 14px;">&lt;strong>EPO Case Law on Plausibility&lt;/strong>&lt;/span>&lt;/p>&lt;p style="text-align: justify;">&lt;span style="font-family: Arial, Helvetica, sans-serif; font-size: 14px;">The issue of plausibility is also associated with inventive step and sufficiency of disclosure in the case law created before the EPO. Although given that the word “credible” was used instead of “plausible” in Case T 939/92 (AgrEvo), there are opinions claiming that this decision, which concluded that a technical effect should be reasonably predictable and credible, was the first to use the threshold of plausibility.&lt;/span>&lt;/p>&lt;p style="text-align: justify;">&lt;span style="font-family: Arial, Helvetica, sans-serif; font-size: 14px;">However, according to the contrary views, Case T 1329/04 (John Hopkins) was the first to establish the plausibility threshold in explaining that it was at least made plausible that the claimed invention could be carried out.&lt;/span>&lt;/p>&lt;p style="text-align: justify;">&lt;span style="font-family: Arial, Helvetica, sans-serif; font-size: 14px;">In contrast to these cases, Case T 609/02 (Salk) concerned the plausibility threshold about the sufficiency of disclosure, and it was concluded that there was a requirement to make the existence of a cause-and-effect relationship plausible.&lt;/span>&lt;/p>&lt;p style="text-align: justify;">&lt;span style="font-family: Arial, Helvetica, sans-serif; font-size: 14px;">Finally, in a more recent case, T 488/16 (Dasatinib/BRISTOL-MYERS SQUIBB), the EPO Enlarged Board of Appeal clarified that even though there is not always a requirement to have experimental data in an application, the technical problem must at least shown to be plausibly solved at the filing date.&lt;/span>&lt;/p>&lt;p style="text-align: justify;">&lt;span style="font-family: Arial, Helvetica, sans-serif; font-size: 14px;">The plausibility issue also raises a discussion regarding filing post-published documents. It is seen that there are many decisions of EPO Technical Boards of Appeal (see, in particular, T 578/06) addressing the plausibility issue together with evidence published after the date of filing. The majority of the decisions stress that post-published evidence can be considered on the condition that a certain effect was plausible at the filing date of the patent application. In that situation, post-published documents can be accepted.&lt;/span>&lt;/p>&lt;p style="text-align: justify;">&lt;span style="font-family: Arial, Helvetica, sans-serif; font-size: 14px;">&lt;strong>Case Law of Turkish Courts Regarding Plausibility Principle&lt;/strong>&lt;/span>&lt;/p>&lt;p style="text-align: justify;">&lt;span style="font-family: Arial, Helvetica, sans-serif; font-size: 14px;">Given that the concept of plausibility is only just gaining currency in Turkish law and that it has not been put forward as a sound argument by plaintiff parties, it has not yet been included in any high court case law and has not been evaluated in any decision by a court of first instance.&lt;/span>&lt;/p>&lt;p style="text-align: justify;">&lt;span style="font-family: Arial, Helvetica, sans-serif; font-size: 14px;">Indeed, the plaintiff claimed in a recent patent invalidation action that the subject patent was not plausible in the context of insufficient disclosure. However, the plausibility requirement was erroneously defined because of the presence of all the evidence in the patent document that directly and undoubtedly proved that the technical problem had been resolved. However, according to the EPO’s practices, for example, the submission of in vitro test results may be sufficient to make the solution to the technical problem foreseen in the patent plausible. In this respect, since the plaintiff could not prove its claim in accordance with the general principles of the law of proof, the court of first instance concluded that the invention was entirely and sufficiently disclosed to allow the implementation of the invention by the technical expert. No evaluation was made regarding the plaintiff’s plausibility argument; therefore, no steps were taken to form case law on plausibility.&lt;/span>&lt;/p>&lt;p style="text-align: justify;">&lt;span style="font-family: Arial, Helvetica, sans-serif; font-size: 14px;">&lt;strong>Unifying EPO Case Law Will Be Instructive to Turkish Courts&lt;/strong>&lt;/span>&lt;/p>&lt;p style="text-align: justify;">&lt;span style="font-family: Arial, Helvetica, sans-serif; font-size: 14px;">At the point reached in the practice of intellectual property law today, it is not possible to talk about advanced plausibility arguments having been put forward or argue that case law can be used as a criterion in the plausibility evaluations to be made by the courts has been established.&lt;/span>&lt;/p>&lt;p style="text-align: justify;">&lt;span style="font-family: Arial, Helvetica, sans-serif; font-size: 14px;">However, the decision to be issued regarding the G 2/21 application by the EPO Enlarged Board of Appeal following the oral hearing held on November 24 2022, is expected to bring about essential standards regarding the requirement of plausibility and addresses important questions about whether post-published documents should be taken into account in the examination of plausibility, and will have significant repercussions in the patent world. It would not be wrong to say that the effects of this decision will be seen in Turkey as well.&lt;/span>&lt;/p>&lt;p style="text-align: justify;">&lt;span style="font-family: Arial, Helvetica, sans-serif; font-size: 14px;">While no case law can be taken as a precedent in national legal practice given that Turkey is a party to the European Patent Convention, in our opinion, the G 2/21 decision will help to establish a uniform approach to applications by constituting a direct precedent for Turkish patent law.&lt;/span>&lt;/p>&lt;p style="text-align: justify;">&lt;span style="font-family: Arial, Helvetica, sans-serif; font-size: 14px;">The industry is very excited to see the written decision of the EPO Enlarged Board of Appeal, which will bring enlightenment to pending disputes in different types of jurisdictions.&lt;/span>&lt;/p>

The concept of plausibility – which has been the subject of numerous evaluations, especially by the European Patent Office (“EPO”) and frequently debated in academic circles in recent years – has not yet found a place within the scope of any legal regulation in Turkey.

“Plausibility” in Turkish Patent Law and Its Impact on Invalidation Proceedings

&lt;p style="text-align: justify;">&lt;span style="font-family: Arial, Helvetica, sans-serif; font-size: 14px;">For an extended period, the pharmaceutical industry needed a unique model of reimbursement where its conditions could be set together through negotiation with the SSI, and the regular price and reimbursement rules did not apply to innovative products.&lt;/span>&lt;/p>&lt;p style="text-align: justify;">&lt;span style="font-family: Arial, Helvetica, sans-serif; font-size: 14px;">With the enactment of the Social Security and General Health Insurance Law numbered 6552 in September 2014, alternative reimbursement models also became an essential topic in the Turkish healthcare industry. The complementary provisions introduced with the Regulation on the Alternative Reimbursement of Pharmaceuticals, published in February 2016, allowed companies and the SSI to benefit from discussing the terms and conditions of an alternative reimbursement model for particular products. It was expected that alternative reimbursement models, in which the SSI will enter a direct contractual relationship with pharmaceutical companies, will ultimately allow patients to access innovative pharmaceuticals faster. However, nowadays, these models also appear to control pharmaceutical prices.&lt;/span>&lt;/p>&lt;p style="text-align: justify;">&lt;span style="font-family: Arial, Helvetica, sans-serif; font-size: 14px;">In addition, with the conclusion of one of the actions filed against specific provisions of the Regulation on the Alternative Reimbursement of Pharmaceuticals, some articles were annulled on the grounds of procedural deficiency, as the SSI issued the regulation without receiving the opinion of the Ministry. Since the entire text is not the subject of the action, only some of the provisions were brought before the court, and essentially the entire Regulation is still in force, including the article of the law on which the alternative reimbursement models are based.&lt;/span>&lt;/p>&lt;p style="text-align: justify;">&lt;span style="font-family: Arial, Helvetica, sans-serif; font-size: 14px;">Following the annulment decision, the SSI was expected to update the Regulation on the Alternative Reimbursement of Pharmaceuticals by duly re-publishing the annulled articles. Instead, the SSI published the new Regulation on the Reimbursement of Pharmaceuticals, including the articles that will update the principle of confidentiality of the discount rates applied in these alternative models. In this context, the rule regarding confidentiality, implemented with the Alternative Reimbursement Regulation, has been re-introduced with the amendment made in the Pharmaceutical Reimbursement Regulation. However, it is unclear whether the Alternative Reimbursement Commission will be convened or the pharmaceutical companies will make new reimbursement agreements with the SSI with confidential and special discounted prices. It is thought that the elections, to be held in 2023, also play a role in how the implementation will continue in this issue, which is highly critical for the country’s economy and companies.&lt;/span>&lt;/p>

For an extended period, the pharmaceutical industry needed a unique model of reimbursement where its conditions could be set together through negotiation with the SSI, and the regular price and reimbursement rules did not apply to innovative products.

Market Access - Alternative Reimbursement Models

&lt;p style="box-sizing: border-box; margin: 0px 0px 10px; color: rgb(51, 51, 51); font-family: Arial, sans-serif; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-align: justify; text-indent: 0px; text-transform: none; white-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; background-color: rgb(255, 255, 255); text-decoration-thickness: initial; text-decoration-style: initial; text-decoration-color: initial; font-size: 14px;">&lt;span style="font-family: Arial, Helvetica, sans-serif; font-size: 14px;">Although there is no explicit provision in Turkish Law for the acceptance of the ongoing opposition or appeal proceedings before the European Patent Office (“EPO”) as a “pending issue” due to the principle of procedural economy, in practice, pending issue decisions may be given by the Civil Courts of Intellectual and Industrial Property Rights according to the particular circumstances. As Turkey is one of the signatory countries to the European Patent Convention, upon the issuance of a revocation decision regarding a European patent, the patent’s validation before TÜRKPATENT is also revoked. Therefore, the revocation decisions rendered by the EPO are binding for Turkey. In addition, based on the principle of procedural economy set out in Article 30 of the Code of Civil Procedure (“CCP”), which governs the proceedings, and taking into account that EPO decisions are also binding and the EPO may revoke the patent, it may be decided to postpone the proceedings before the national court to avoid unnecessary examination and workload. Since there is no specific provision in Turkish Law on the obligation to hold the EPO proceedings as a pending issue, the courts decide on whether to hold the EPO proceedings as a pending issue by considering the stage of the EPO proceedings, the type of the action, and the balance of interests among the parties.&lt;/span>&lt;/p>&lt;p style="box-sizing: border-box; margin: 0px 0px 10px; color: rgb(51, 51, 51); font-family: Arial, sans-serif; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-align: justify; text-indent: 0px; text-transform: none; white-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; background-color: rgb(255, 255, 255); text-decoration-thickness: initial; text-decoration-style: initial; text-decoration-color: initial; font-size: 14px;">&lt;span style="font-family: Arial, Helvetica, sans-serif; font-size: 14px;">However, considering the length of the EPO proceedings, it is necessary to consider the balance of interests among the parties in this process. In this context, especially considering that the patent protection period is limited to 20 years and there is no regulation extending this period in Turkish Law, if there is a request from the parties, it is essential to decide on provisional legal protection measures to prevent the damages that may arise due to the duration of the proceedings.&lt;/span>&lt;/p>&lt;p style="box-sizing: border-box; margin: 0px 0px 10px; color: rgb(51, 51, 51); font-family: Arial, sans-serif; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-align: justify; text-indent: 0px; text-transform: none; white-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; background-color: rgb(255, 255, 255); text-decoration-thickness: initial; text-decoration-style: initial; text-decoration-color: initial; font-size: 14px;">&lt;span style="font-family: Arial, Helvetica, sans-serif; font-size: 14px;">Indeed, the Regional Court of Appeal issued a precedent-setting decision emphasizing this importance. In an infringement and counter-invalidation action, the court of first instance decided to wait for the outcome of the EPO appeal process because the opposition process regarding the EPO patent has been concluded, but the appeal proceedings are still ongoing. The court rejected the preliminary injunction request filed by the patentee to compensate for the loss of rights during the waiting period of the EPO process because the EPO appeal and objection processes directly concern the infringement action, and the infringement action will affect the decision of the court. The patentee appealed this decision which was found unfair and unlawful on the grounds that the EPO appeal proceedings were concluded in favor of the patentee, the experts appointed by the court determined the patent infringement, the patent protection period is limited, and cannot be extended. There is no need to wait for this process to issue an injunction.&lt;/span>&lt;/p>&lt;p style="box-sizing: border-box; margin: 0px 0px 10px; color: rgb(51, 51, 51); font-family: Arial, sans-serif; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-align: justify; text-indent: 0px; text-transform: none; white-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; background-color: rgb(255, 255, 255); text-decoration-thickness: initial; text-decoration-style: initial; text-decoration-color: initial; font-size: 14px;">&lt;span style="font-family: Arial, Helvetica, sans-serif; font-size: 14px;">The District Court, deeming the plaintiff’s requests appropriate, ruled that&nbsp;&lt;em style="box-sizing: border-box;">“Although it is understood that the request for a preliminary injunction was rejected due to the pending EPO appeal proceedings,&lt;/em>&nbsp;&lt;em style="box-sizing: border-box;">holding the process a pending matter does not constitute an obstacle for the evaluation of the request for a preliminary injunction.”&lt;/em>&nbsp;Accordingly, the District Court, by noting that the request for a preliminary injunction should be evaluated while waiting for the conclusion of the EPO appeal proceedings to protect the balance of interests among the parties at this stage of the case, revoked the decision of the court of first instance that rejected the request for a preliminary injunction.&lt;/span>&lt;/p>&lt;p style="box-sizing: border-box; margin: 0px 0px 10px; color: rgb(51, 51, 51); font-family: Arial, sans-serif; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-align: justify; text-indent: 0px; text-transform: none; white-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; background-color: rgb(255, 255, 255); text-decoration-thickness: initial; text-decoration-style: initial; text-decoration-color: initial; font-size: 14px;">&lt;span style="font-family: Arial, Helvetica, sans-serif; font-size: 14px;">This decision has once again emphasized the purpose of the preliminary injunction to prevent the emergence of damages that occurred during the trial that are difficult or impossible to compensate for later on. Furthermore, this decision makes it clear that the requests for a preliminary injunction should be decided on a priority basis to protect the patent rights of patentees in an effective and timely manner; holding the EPO process a pending issue should not be an obstacle to the consideration of preliminary injunction requests. This decision sets an example for cases where the EPO opposition and appeal process is awaited to be finalized to prevent the parties from losing their rights for years in prolonged cases due to the pending issue.&lt;/span>&lt;/p>

Although there is no explicit provision in Turkish Law for the acceptance of the ongoing opposition or appeal proceedings before the European Patent Office as a “pending issue” due to the principle of procedural economy, in practice, pending issue decisions may be given by the Civil Courts of Intellectual and Industrial Property Rights according to the particular circumstances.

The Need for an Injunction in Cases Where the EPO Proceeding is held as a Pending Issue

In an economically strained climate, be it with the aftermath of the Covid-19 Pandemic or the rising inflation rates causing price increases and economic hardship, the cost of arbitration is a factor that has become ever more prevalent.

ICC - Partial Award on Costs Where a Party Defaults in Paying its Share of the Advance Payment

It is time to take a look back at the first months of 2023 and digest the recent updates and developments happening in the world of international arbitration. Recent court decisions present the new trends and shed light to the future of international arbitration.

Esin Arbitration Quarterly

The main and most commonly used method for resolving large commercial disputes in Turkey is litigation. Civil litigation is based on the principle that the parties to the dispute prepare their case. The judge is bound to hear claims, defences and evidence brought by the parties.

Litigation and Enforcement 2023 in Turkey - 1

Both the International Arbitration Code and Civil Procedural Code contain default procedural rules. However, the majority of these rules are not mandatory, and the parties are free to determine procedural rules in their arbitration agreement or after the arbitration begins. In practice, the parties often agree to apply institutional arbitration rules with their sets of default procedural rules.

Litigation and Enforcement 2023 in Turkey - 2

Popular Articles on Dispute Resolution

Latest Insights from Gün + Partners

Litigation and Enforcement 2023 in Turkey - 2

Popular Articles on Dispute Resolution

Latest Insights from Gün + Partners

Subscribe to our newsletter