Turkish Legislation Offers Various Solutions to Tackle Trademark Squatting

Similar as in other countries, trademark squatting is also a common problem which foreign brands face in Türkiye. Trademark squatting creates challenges for market entry and registration of trademarks for foreign companies, as well as leading to dilution of the original trademark. Although there are steps to be taken to better prevent squatters, the current intellectual property (IP) legislation still has effective tools to protect the rights of foreign trademark owners and to combat trademark squatting, with the well-established praxis of the Turkish Patent and Trademark Office (“Office”) and the Courts.

What is trademark squatting and how do the squatters register original brand owners’ trademarks?

Trademark squatting can be defined, briefly, as the situation where someone registers and/or uses the trademark of an original brand owner which is not registered in the relevant country. In most cases, the original brand owner’s trademark is well-known or has a certain reputation. In most cases, the squatter does not aim to genuinely use the trademark but makes attempt to “keep” in an attempt to gain profit from the original brand owner in some way; for example, they may offer to sell the trademark to the original brand owner or by forcing them to provide them with a license usually with the threat of a future infringement action based on its registration.

Trademark registration systems of countries have an important role in squatters’ ability to register a sign identical or similar to the original brand owners’ trademarks. In the first-to-file countries like Türkiye, it is somewhat easier for squatters to register the trademark if the original brand owners do not have an earlier registered trademark in the country in question. On the other hand, it might be harder for squatters to obtain registration in first-to-use countries; because in most cases, squatters do not use or do not have a genuine intention to use the trademark in question. Lack of absolute grounds, especially in terms of well-known trademarks, also affects the ability of squatters. In Türkiye, the Office conducts ex-officio examination based on absolute grounds, that is to say, a trademark application is rejected if it is identical or indistinguishably similar to an earlier dated trademark registration which covers identical or indistinguishably similar goods or services but there is no absolute ground based on well-known status of the trademark.[1]

How do original brand owners resolve trademark squatting in Türkiye?

As in all other disputes, settlement is often the desired outcome, but it is not always feasible due to unreasonable demands of squatters. In such cases, legal action becomes necessary. These actions might be (i) filing a non-use revocation action against the trademark in question before the Office if it is registered for more than five years, (ii) filing an opposition against the trademark before the Office (at the application phase) and (iii) filing an invalidation action against the relevant trademark registration before the Courts.

In an opposition or invalidation action, the legal grounds that may be relied upon by the original brand owner might be (i) bad faith of the squatter, (ii) well-known status of the original trademark, (iii) genuine rights of the original brand owner, (iv) copyrights and (v) tradename, as appropriate. In the following paragraphs, we further examine the details of the available grounds in such proceedings.

Bad faith of squatters

In regards to bad faith, there is no specific definition in the IP Code but in trademark squatting cases, the actions of the squatter are examined on a case-by-case basis and the bad faith argument is usually accepted if there is no commercial logic behind the squatter’s actions and it cannot be a mere coincidence that the squatter chose the original brand owner’s trademark. In most cases, the Office and Courts consider the following as acts conducted in bad faith and/or a situation which indicates bad faith: (i) use of the identical and/or very similar word or device element, font, colors etc., (ii) use of an existing original and unique trademark that could not have been created by someone else by chance, (iii) creating a portfolio of third-party (usually well-known) trademarks, (iv) operating in the same sector with the original brand owner, (v) dishonest actions such as monetary demands from the original brand owner or to force them to provide them with license, etc., and (vi) prior commercial relationship between the parties (license, distributorship etc.). The Office takes a broad approach to identifying actions which may be considered bad faith. For example, filing documents to prove that the squatter is the former distributor of the original brand owner to show that he is aware of the existence of the original trademark, or email correspondence or messages between the parties which prove that the squatter has made monetary demands of the original brand owner are usually found sufficient in proving the motives are in bad faith. If the original trademark is used in Türkiye, or it has built a certain reputation in Türkiye, it is more likely for the Office or the Courts to accept arguments of bad faith.

Well-known status of the original trademark

The well-known status of the original trademark is another argument that can be raised by the original brand owner. According to the IP Code, if the trademark is well-known as outlined in Article 6bis of the Paris Convention in its country of origin in the relevant sector, it can be raised as a ground for an opposition or invalidation action in terms of identical and/or similar goods and services. To prove the well-known status of the trademark, the original brand owner should file extensive evidence, such as list of worldwide registrations, awards, listings, survey/public opinion results, news items, articles, etc. that predates the filing date of the squatter’s trademark. Although there are decisions in which the well-known status of the trademark in its country of origin was considered sufficient, the Office and Courts sometimes require a proof that the original trademark has a certain level of regard or have a well-known status in Türkiye as well.

Genuine rights of original brand owners

In addition to these two arguments, the original brand owner may also argue that it is the genuine right holder. To prove the genuine rights, evidence proving that the original trademark was created and used by the original brand owner, before the squatter, should be submitted. The IP Code does not explicitly require proof of earlier use in Türkiye but in practice, the Office and Courts generally require evidence of use in Türkiye in order to be able to accept claims of genuine right. Invoices and/or customs declarations either issued by the original brand owner or its distributor in Türkiye is considered as the most significant evidence, but any other evidence, such as catalogues, news items, articles, awards, documents regarding creation and use of the trademark would support claims in the proof of genuine rights.

Copyright and Tradename of original brand owners

When the squatter applies for, or registers, a trademark which includes copyrighted works, such as a distinctive logo, the original brand owner may object based on its copyrights in accordance with the IP Code. The original brand owner does not have to obtain a copyright registration certificate in Türkiye and may submit foreign registration certificates or any other documents proving the creation of the copyrighted work to prove its rights.

Lastly, as per the IP Code, the use of a third-party’s tradename in a trademark can be prevented by the owner of the tradename. So, if the squatter’s trademark includes the original brand owner’s tradename, the original brand owner may object to the registration of the squatter’s trademark.

Trademark squatting examples from Türkiye

One of the most obvious examples of trademark squatting is the Jelly Belly case. A well-known retail company, which owns several discount stores across Türkiye, registered five trademarks for “Jelly Belly” (both word and device trademarks, such as ) which cover candy and confectionery in class 30. The Jelly Belly Candy Company, an American company manufacturing the famous Jelly Belly jelly beans, filed an invalidation action against these trademarks and the Court invalidated the subject trademarks based on the well-known status of the Jelly Belly trademark and consideration of bad faith of the defendant. Although the Jelly Belly Candy Company’s products were not sold in Türkiye, the Court considered evidence (most of which are related to the company’s activities abroad), including the worldwide registrations for “Jelly Belly”, sponsorships, news items and articles, survey results, foreign judgements acknowledging well-known status of the trademark and documents proving that several Turkish companies approached Jelly Belly Candy Company for distributorship and concluded that “Jelly Belly” is a well-known trademark. With regard to bad faith of the defendant, the Court took into account the fact that Jelly Belly is a well-known trademark which is used and promoted worldwide by Jelly Belly Candy Company for many years; it has been subject to numerous news items, articles and sponsorships, so the defendant cannot argue that it was not aware of the trademark. Furthermore, “Jelly Belly” comprises of foreign words which are not commonly used in the Turkish language, and so it was not plausible that the defendant would have created such a trademark by chance.

In another case, the Court invalidated the  trademark on account of the genuine rights of the original brand owner, which operates in online beauty services bookings, and bad faith of the defendant. The Court concluded that “Treatwell” is a distinctive word, and it is not possible for a Turkish person to create such trademark by coincidence. In addition, it was considered that the defendant is aware of the original brand owner and its activities in the beauty sector. This case is notable, as the original brand owner does not use its trademark or offer services in Türkiye, but the use of the trademark abroad was taken into consideration.

The Office also accepted the oppositions of original brand owners and rejected the trademark applications for , which copies the word element, color and font of a Korean cosmetics brand and for , which includes the same word element of another Korean cosmetics brand.

Conclusion and proactive actions

Trademark squatting poses significant challenges in many countries, including Türkiye. The wide range of actions and legal grounds currently available in the Turkish IP system ensure that original brand owners can effectively tackle matters concerning trademark squatting and safeguard their trademarks and reputation. It is also important to note that original brand owners should also take proactive actions to prevent squatting. Obtaining trademark registrations in several countries, regularly monitoring third-party trademarks and filing oppositions in other countries as necessary are steps toward better protection of original trademarks.

[1] Before the IP Code was enacted in 2017, the Decree Law no. 556 was in force and article 7/1 (ı) of the Decree Law ruled that an application shall be ex-officio rejected if it is identical to a well-known trademark within the meaning of Paris Convention; however, the relevant article was abolished by the Constitutional Court in 2015.