Turkish Law Blog

Recovery of Damages due to Patent Infringement in Turkey

Selman Baltacı Selman Baltacı/ DNB Legal
21 April, 2020
306

Abstract

Patent holders may file lawsuits in order to claim the damages that occurred due to infringement of their patents. However, the calculation method of the pecuniary and non-pecuniary damages may differ in accordance with the request of the Patent Holder. Besides, since patents are very valuable assets which contain technical characteristic, the strategy of the lawsuit should be carefully analyzed, and Patent Holder should secure the documents which prove the patent infringement. In this article, we will discuss the actions which are accepted as patent infringement, legal actions that can be taken prior to the lawsuit, calculation methods of the pecuniary damages and essential points of the mentioned lawsuit.

1. Introduction

In accordance with the 6769 numbered Industrial Property Code (“IPC”), Patent Holders are entitled to take legal actions against the infringement of their registered patents. Such legal actions may differ in accordance with the characteristics of the infringement and Patent Holder shall choose the best method in order to prevent the infringement and collecting the pecuniary and non-pecuniary damages. However, first of all, we should briefly explain the patent rights and it’s registration procedure.

2. What is Patent?

An invention shall have three characteristics in order to be registrable as a patent. Mentioned characteristics are stated in the article 82/1 of IPC and they are as follows;[1]

i. Invention should be new, (original)

ii. Invention should possess the sufficient “inventive step”, in other words, should provide an advantage compared to previous knowledge,

iii. Invention should be feasible to industry,

Complying with the above-mentioned definition, World Intellectual Property Organization (“WIPO”) has designated the characteristics which are required for the patent registration. Thus, an invention must meet several criteria if it is to be eligible for patent protection. These include, most significantly, that the invention must consist of patentable subject matter, the invention must be industrially applicable (useful), it must be new (novel), it must exhibit a sufficient “inventive step” (be non-obvious), and the disclosure of the invention in the patent application must meet certain standards.[2]

If an invention is complying with the mentioned characteristics, it can be registered as “Patent” before the Turkish Patent and Trademark Office. Applicants should fulfill the required transaction in order to complete the registration. If an invention is registered as Patent, the Patent holder will be the sole and absolute owner of the Patent and will be entitled to use all kinds of legal and commercial powers arising from the patent rights.

In principle, if the patent application is registered before the Turkish Patent and Trademark Office, the registered patent will be protected only in Turkey. However, the patent holder may file an application for international registration in accordance with the Patent Cooperation Treaty and Paris Convention for the Protection of Industrial Rights.[3]

As it is already known, Patents had become one of the most important and valuable assets of the Companies, due to improving technology. Besides, almost always, patents allow to manufacture the goods faster and with better quality, than the previous methods. As a result of these benefits, sometimes third parties may use the patent without the prior consent of the Patent Holder and thus may infringe the patent rights which are provided by the IPC regulations.

Actions that shall be accepted as patent breach is stated in article 141 of IPC. In this regard, a. imitating the invented product partially or wholly by manufacturing, b. Producing and commercializing the same in any way, c. If the patent concerns a process, commercializing the product directly obtained through such process; d. Enlarging the scope of the rights granted by the patent holder on the basis of a contractual license or granted by compulsory license or transferring such rights to third persons, without permission.[4]

In order to prevent such infringements, IPC provides Patent Holders to right the to take legal actions in order to stop or prevent such actions or compensate for the damage occurred because of patent infringement. However, Patent Holder may take preventive actions in order to secure it’s rights and documents which proves the patent infringement.

3. Preventive Actions 

The patent holder shall file a lawsuit before the authorized court for the compensation of pecuniary and non-pecuniary damages. However, in order to prove the patent infringement, Patent Holder may commence “declaratory action” before the “Civil Court of Peace”.

Also, Patent Holder may request a preliminary injunction in order to temporarily prevent the infringement actions until the lawsuit is finalized.

i. Declaratory Action

If Patent Holder files a lawsuit against the breaching party, the defendant may stop the infringement actions or hide the evidences. In order to protect the rights of Patent Holder, Declaratory action allows Patent Holder to record the patent infringement before commencing the lawsuit. In this regard, Patent Holder shall file an application before the Civil Court of Peace, by stating the documents which prove that patent is registered.[5]

If declaratory action is accepted by the court, the place in which patent infringement is conducted will be visited without prior notice and experts will investigate the type of infringement.

After that, the expert will write a report which is investigating that if the infringement is occurred or not. If the mentioned report proves that infringement is occurred, Patent Holder may use this as proof during the lawsuit.

Also, if products that are manufactured through the patent infringement are exhibited at the website of breaching party, Patent Holder may issue an online declaratory action through notaries.[6] In this way, even if the breaching party removes the products from the website, Patent Holder will be able to prove the infringement.

ii. Preliminary Injunction

When Patent Holder files a lawsuit in order to stop the breaching activities, the breaching party may continue to infringement activities and production, until a final determination is ordered. In this case, infringement activities will continue, and damage of the Patent Holder will increase.

In order to prevent this, article 390 of the Turkish Civil Procedure Code (CPC) regulates the preliminary injunction, aimed at the prevention of damages generated by the breaching party, prior to the final court order.[7] However, preliminary injunction restricts the operation of the breaching party, that’s why a preliminary injunction is subjected to strict regulations.

In accordance with the article 390/3 of CPC, the requesting party shall have to approximately prove that the preliminary injunction is true. “Approximate proof” is a subjective term and it is not defined in the code; however Supreme Court Practices might be helpful about this matter.

Requesting Party should clearly explain the reason for preliminary injunction and type which is stated in the writ of summons and should "approximately prove" rightfulness of the preliminary injunction request, with the legal evidences. Proof evaluation should be determined in accordance with the “approximate proof” rule. In this rule, judge accepts that request is probably right, but also considers that opposite is possible even if it is much more minimal chance.[8]

In the light of Supreme Court decisions, approximate proof can be defined. Declaratory Action would be very beneficial for the approximately prove the rightfulness of the preliminary injunction claim. Also, Patent Holder is obliged to provide a guarantee in order to pay the damages sustained by the defendant party, if the preliminary injunction is determined to be unjust at the end of the lawsuit. On the other hand, the Court may decide not to take any guarantee if the preliminary injunction request is based on legal document, or any other certain proof or situation requires the preliminary injunction.

The court shall state the grounds of not taking any guaranteed payment explicitly.[9]

Patent Holder can request to seize the products which have been manufactured through patent infringement, stop the infringement actions, destroy the products which has been manufactured through patent infringement and any kind of action that would prevent the breach of patent rights.[10]

Also, a preliminary injunction is regulated in article 159 of the IPC too, and most common preliminary injunction actions are stated. They are as follows;[11]

  • Preventing and stopping all kind of actions which constitutes an infringement to the industrial property right of the requesting party.
  • Seizing the products which have been manufactured or imported through infringement of industrial property, seizing the tools or machines which have been exclusively used for the production of the breaching products.
  • Requesting a guarantee for the recovery of any kind of damage.

If a preliminary injunction is granted by the court, the requesting party should execute the preliminary injunction within a week beginning from the date of order. Or else, preliminary injunction order will be removed.

4. Pecuniary, Non-Pecuniary and Reputational Loss Damages

By filing a lawsuit, Patent Holder may ask for the recovery of damages occurred because of the infringement of the patent rights. In Turkish Regulations, Patent Holder is entitled to request to the recovery three types of damages, such as Pecuniary Damages, Non-Pecuniary Damages, Reputational Loss.

Patent Holder should note that mediation is specified as a condition of action pursuant to article 4 of the 6102 Turkish Commercial Code. (TCC) If a lawsuit is filed without fulfilling the mediation procedure, the lawsuit will be rejected without prejudice.[12]

i. Recovery of Pecuniary Damages:

As it is stated above, Patent Holder has a right to claim the recovery of damages occurred because of patent infringement. However, calculation of the pecuniary damages is a complicated issue that may differ in accordance with the characteristics of each lawsuit. Because of this reason, the Turkish Code provides three different calculation methods to Patent Holder.

  • Possible revenue that Patent Holder would earn if the defendant party had not committed unfair competition.
  • Net revenue which the defendant party earned through patent infringement.
  • The annual license price of the patent, for each year that the defendant party infringed the patent.

Patent Holder should state the selected calculation method in the writ of summons, by carefully analyzing the characteristics of patent infringement.  

ii. Recovery of Non-Pecuniary Damages:

Patent Holder is entitled to recovery of non-pecuniary damages, pursuant to IPC, article 149/1-ç. Since non-pecuniary damages are not regulated in the IPC, Patent Holder shall request the non-pecuniary damages based on 6098 numbered Turkish Obligations Code (“TOC”).

The infringement of patent rights is considered as the violation of personal rights, thus patent holders can request the non-pecuniary indemnification based on article 58 of TOC. However, there is not a certain calculation method for the determination of non-pecuniary damages. That’s why Supreme Court decisions should be a guideway for the calculation of non-pecuniary damages.

While determining the non-pecuniary damage amount, the judge shall consider the characteristics of the violation, defective fraction of the parties, their title, their social and economical situation. Since there would be specific conditions for each lawsuit, judge should state the “objective” reasons of the decision at the court order.  Because it is stated in article 4 of the Turkish Civil Code that judge shall use the juridical discretion complying with the law and fairness. The determined amount shall aim to recover the peace of the damaged party. It is not a penalty as well as it does not aim to recover certain tangible damage. In this regard, the amount of the indemnification shall be determined in accordance with its purpose.[13]

In Turkish legislation, non-pecuniary damages are not “punitive” and only aim to recover the peace of the damaged party.

iii. Reputational Loss Damages:

In the article 150/2 of IPC, Patent Holder is entitled to request for the recovery of the reputation loss occurred since products which constitute an infringement to patent rights are manufactured with low quality, submitted to sale by non-conforming methods or any other way. This shall not be considered as, non-pecuniary damage and can be requested as different indemnification.

It should be noted that pecuniary damages, non-pecuniary damages and reputational loss damages do not compete with each other, but they accumulate. Patent Holder is entitled to request all of the abovementioned damages separately.[14]

5. Conclusion

 In this article, recovery of the damages occurred because of the patent infringement is briefly explained. As a result, the most important matter with the protection of patent rights is, carefully evaluating the characteristics of patent and shaping the strategy of the lawsuit in this regard.

To understand the technical characteristics of violated patent, Patent Holder may require assistance from the patent attorneys, experts, and professionals.


[1] 6769 numbered Turkish Industrial Property Code art. 82/1

[2] WIPO Intellectual Property Handbook: Policy, Law and Use, Chapter 2 : Fields of IP Protection, art. 2.6

[3] Paris Convention for the Protection of Industrial Rights, 1883 art. 4 – Patent Cooperation Treaty, 1970 art. 3

[4] 6769 numbered Industrial Property Code, art. 141

[5] 6100 numbered Turkish Civil Procedure Code, art. 400

[6] 1512 numbered Turkish Notary Code, art. 198/A

[7] 6100 numbered Civil Procedure Code, art. 390

[8] T.C. Supreme Court 19th Civil Chamber E. 2019/2981 K. 2019/4812 T. 17.10.2019

[9] 6100 numbered Civil Procedure Code, art. 392

[10] 6100 numbered Turkish Civil Procedure Code, art. 391/1

[11] 6769 numbered Turkish Industrial Property Code, art. 159

[12] 6102 numbered Turkish Commercial Code, art. 4

[13] T.C. Supreme Court 4th Civil Chamber E. 2018/1327 K. 2019/5335 T. 18.11.2019

[14] KARAHAN, Sami/SULUK, Cahit/SARAÇ, Tahir/NAL, Temel; s.406

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