Opposing interpretations on bad faith in Turkey

 This article was written by Yasemin Aktaş and was first published in the World Trademark Review (WTR) website on the 12th of December 2022. 

 

Contrasting PTO and court decisions on the same case highlight the need for clarification on what constitutes bad faith in Turkey.

 

In Turkey, a finding of ‘bad faith’ requires “total” refusal/invalidation of the conflicting application/registration by the Turkish Trademark and Patent Office (TPTO) and the courts, according to Article 6/9 of Intellectual Property Code no. 6769 (the IP Code). Bad faith trademark applications may be found in the case of the following circumstances:

  • Pre-emptive filing of a trademark for identical/similar goods/services before its prior user registers their mark in Turkey.
  • Filing an application for a trademark that is confusingly similar to a well-known/famous trademark, but for different goods and/or services, with the objective of taking unfair advantage of the trademark’s goodwill, or as a strategy against the owner taking action to stop the sale of products using lookalike branding and/or packaging.
  • Filing applications for various trademarks without any intention to use such marks, including in order to block a prior user from market entry or to negotiate payment of a licence fee or a fee for an assignment of rights.
  • Applications made for a brand by the relevant entity’s agent or representative.
  • Offensive filings such as applications filed by current, former, or soon to be former business partners or employees known to the trademark owner (in a bid to use registered rights against the rightful owner, either as a negotiating tactic or to gain the upper hand in a dispute).
  • Filing an application for a trademark identical to the applicant’s previous registrations, covering the same goods/services, in an effort to circumvent genuine use requirements.

However, since the IP Code does not clarify specific indications of bad faith, its determination remains a matter of interpretation for the PTO and the courts. This has resulted in contradictory decisions in similar – and even identical – disputes.

In one recent case, a brand owner (the largest independent US manufacturer of high-end gear for professional audio, car stereo, marine audio, and home theatre) with a master brand word mark and distinctive logo had registered its marks in Class 9 in the US and a number of other jurisdictions, but had not done so in Turkey. The brand owner had also been using an updated version of its logo in a different stylisation and with additional word elements.

The brand owner discovered a local third-party registration at TPTO for a mark consisting of its word mark and distinctive logo, in identical presentation and covering all sub-classes in Class 9. The local registrant was in the same sector as the brand owner and had other filings which were apparent copies of other foreign marks in the audio system sector (which similarly had not been registered in Turkey by the genuine right holders). Moreover, the local registrant also owned an application in Classes 12 and 35 for the brand owner’s updated logo. This application was still in the opposition phase.

The US brand owner contacted the local registrant to solve the matter amicably. At the beginning, the registrant said that they had never used the conflicting marks and agreed to fulfil all requests in writing. However, they subsequently changed their approach, stating that they had made investments into the brands and cannot simply withdraw them without a reimbursement of these costs.

The US brand owner filed an invalidation action against the registration and an opposition against the pending application for total invalidation/refusal of the marks. Based on the above, the strongest cause of action was bad faith, based on the following arguments.

  1. The identity of the registered mark with the brand owner’s own word mark and distinctive logo – and the identity of the pending application with the brand owner’s updated logo – show that the registrant has been following the brand owner’s activities/branding and copying the brands in bad faith (an argument supported by the precedent of the 11th Chamber of Supreme Courts, 13.10.2011, (2009/12370E./ 2011/12969K).
  2. The registrant’s other trademark filings copied unregistered foreign marks in the same sector, supporting the contention that they systematically copy and register foreign marks in bad faith (Supported by the precedent of the 11th Chamber of Supreme Courts, 24.10.2011 (2011/12336E./ 2011/14360K).
  3. The fact that the registrant has not used its registered mark after registration (for almost 4.5 years), as well as the change in its approach, evidence that they did not register the mark to use, but rather to negotiate payment of a fee for an assignment of rights (supported by the decision of the Supreme Court Assembly of Civil Chambers 16.07.2008 (2008/11501E./ 2008/507K) and the precedent of the 11th Chamber of the Supreme Courts (24.02.2022 (2020/6923 E, 2022/1234 K)).

These arguments were accepted as an indication of bad faith in precedents issued by the Supreme Court’s in similar cases.

The local company defended its application and registration in both actions by saying that it was a total coincidence for them to apply for registration of the subject’s marks and their filings were made in good faith. They did not respond to any other claims.

The IP Court sent the invalidation file to an official expert panel for examination of the parties’ claims and defences. The expert panel determined that the registrant’s marks consisting of the plaintiff’s word mark and distinctive logo, as well as the updated logo, cannot be the result of a “coincidence” and suggested that the registration should be deemed as a bad-faith filing.

Meanwhile, the opposition against the pending application was rejected by the Trademark Directorate of the TPTO. However, upon the brand owner’s appeal against this refusal before the Re-examination and Evaluation Board of the TTPO, the board deemed the opposed application as a bad faith filing and decided to entirely reject it based on the below grounds:

  1. The opposed application is identical with the opponent’s foreign registrations and use of the cited mark on its website for identical/similar goods/services with the goods/services covered by the opposed application.
  2. The local company must have been aware of the opponent and the opponent’s marks.
  3. The opposed application should be deemed as a bad faith filing considering the summarised facts and the correspondences between the parties regarding the opposed application and the local company’s former registration.

Despite the expert report and the PTO decision, though, the IP Court of first instance refused the bad faith claims on the ground that “identity/similarity between the registered mark and the US owner’s unregistered mark is not sufficient for acceptance of bad faith arguments by itself.”

The brand owner appealed the First Instance Court’s refusal before the Regional Courts of Justice and the appeal is still pending. Meanwhile, the local company did not challenge the board’s decision, and it is now finalised (decision no 2022-M- 5744, dated May 10, 2022).

The court decision not only contradicts the TPTO decision in the same dispute, it also contradicts the Supreme Court’s precedents in similar disputes. Likewise, although the board decision recognises bad-faith and accepted the arguments 1 and 3, it does not accept argument 2 despite the supporting precedent of the Supreme Court.

Expecting PTO and court decisions to always be aligned is not very realistic, although it is what should occur in an ideal world. However, the contradictions between the above decisions in the same dispute, and with decisions in other similar disputes, highlight the need for reasonable clarification on the indications of bad faith in trademark disputes.

The result of the pending appeal against the court decision is awaited with the hope that the Regional Court will bring much needed clarification.

If you would like to talk to Yasemin on this topic, please contact her directly.

You can also read this article on the WTR website here.

 

Q
Yasemin_Aktas_BIO

Bio

Whenever Yasemin gets some free time, she loves nothing more than travelling around the world learning about new cultures and history. When not jumping on a plane in search of new adventures, Yasemin enjoys translating her memories into beautiful paintings or drying flowers as a way to preserve special moments.

As an experienced IP litigator, Turkish trademark and patent attorney who has been practising IP law in this region since 2010, Yasemin advises clients on a wide range of IP issues and transactions and represents clients in complex trademark, design and patent infringement and invalidation cases as well as copyright disputes. With expertise in a number of industries, Yasemin helps clients in building strong anti-counterfeiting strategies (including customs monitoring, raids, seizures and settlement negotiations), implementing IP protection, litigation and enforcement strategies and portfolio management.

Yasemin speaks: Turkish and English

© 2020 BRANDIT. All Rights Reserved. Privacy notice & Terms and Conditions

Share This