Intellectual Property, Information Technology & Cybersecurity

Yesim Tokgoz; Erdem & Erdem (Turkey)

Competition is a constitutional right. However, to assert the deceptive and dishonest acts among people, competitors, clients and seller, as a right, and to protect these acts, is impossible. Unfortunately, at the present time, trademarks, which are the most important factors in competition, are being used to provide unjust gains. In this article, protection of trademarks under unfair competition provisions and the unfair competition actions will be addressed.

The Protection of Registered and Unregistered Trademarks

As it is emphasized in our previous article[1], trademarks are protected under Decree-Law on the Protection of Trademarks numbered 556 (“Decree-Law”) in the Turkish legal system. However, protection is not limited with this. In accordance with the established case law[2], actions that are derived from the Decree- Law, and actions of unfair competition, can be initiated at the same time. However, in this event, the Court shall separately examine whether or not the act that infringes the right of the trademark’s holder, constitutes a breach under the unfair competition provisions, as well.

The protection of the Decree-Law begins with registration. This protection is national. However, trademarks are far too universal to be protected only within national borders. Therefore, the protection of unfair competition reaches beyond national borders[3]. Within this scope, Articles 10bis and 10ter of the Paris Convention for the Protection of Industrial Property to which Turkey is a party, regulate international protection. As a result, aside from registered trademarks, foreign trademarks cannot benefit from the Decree-Law if they are not registered in Turkey, but are protected with the provisions of unfair competition.

Unfair Competition Actions

Unfair competition encompasses all types of abuse of competition by deceptive and dishonest acts. The action of unfair competition aims to protect the competition environment, not intellectual property. In the event of unfair competition between merchants, provisions of Article 54 et seq. of the Turkish Commercial Law (“TCL”) are applicable. Acts of unfair competition are counted analogically under Article 55 of the TCL[4].

In the event that the trademarks are used contrary to unfair competition provisions, the right-holder who suffers may initiate the action of declaration, the actio negatoria, action pleading the cessation of the acts, and/or the action for remedies[5]. Actions of material and moral compensation can be initiated pursuant to the Turkish Law on Obligations, as well.

In the event that a foreign right holder who did not include Turkey in the registration of his/her trademark with the international trademark registry system created by the Madrid Protocol, or who did not register his/her trademark in Turkey, and learns that his/her trademarks is being used in Turkey without his/her knowledge, he/she may prevent this usage by initiating the above-mentioned actions pursuant to the unfair competition provisions. Within the scope of these actions, the right-holder may demand precautionary measures that are also set forth in the Decree-Law. For an actio negatoria, an action pleading the cessation of the acts, and/or an action for remedies, negligence is not sought, where it is sought for the actions of compensation.

In addition, in the event that both actions as derived from the Decree-Law and unfair competition are initiated at the same time, only one form of compensation can be requested, since the compensation should not be deemed as a vehicle for enrichment[6].

Apart from the other civil actions, the final decisions of these actions are enforceable towards the persons who provided the goods subject to unfair competition, directly or indirectly, excluding the acquirer for personal use.

We would like to underline that the provisions of unfair competition are applicable to company names, business products that are not registered, or trademarks, which are no longer under the protection of the Decree-Law.

Prescription

Unfair competition actions are time-barred within one year after the knowledge of the abuse by the right-holder, and three years under any circumstances. The prescription does not start in the event of an ongoing unfair act. Therefore, the right-holder, whose right was time-barred pursuant to the Decree-Law may request to remove the injustice in accordance with the provisions of unfair competition. However, in the event that the right holder keeps silent for a lengthy period of time, and does not initiate an action of unfair competition, pursuant to the principle of loss of right caused by remaining silent, even though the unfair act continues, the right can be time barred[7].

Penal Liability

Apart from above-mentioned regulations, upon the complaint of the persons who have right to initiate an action of unfair competition, persons who perform one of the acts listed under Article 62 of the TCL will be imposed a fine of imprisonment or monetary fine up to 2 years.

Conclusion

The provisions of unfair competition serve the purpose of providing an honest and fair competition environment for all participants[8]. In order to realize this purpose, the trademarks which are the essential actors of competition, should not be used in bad faith. Within this scope, the provisions of unfair competition of the TCL and the Decree-Law compliment the other. In addition to the protection of the Decree-Law, or the situations/products that are excluded from the Decree-Law, the rights of the right-holders are protected in light of the provisions of unfair competition, and through this, a fair competition environment is provided.