A recent decision ruled that invoking the exercising rights
arising from a registration certificate is not always lawful. The
Council of Appellate Circuits of the Turkish Court of Appeals
awarded damages to a party on the basis of another party
registering an industrial design the Turkish Patent Institute (TPI)
For several years, Party X manufactured and sold PVC pipe clips
used in conjunction with rainwater down-pipes. The PVC pipe clips
are commonly used in the market. Party Y held an industrial design
registration for the same PVC pipe clip with the TPI.
The legal actions leading up to the Council of Appellate
Circuits' decision were as follows.
Party Y (which held the industrial design registration)
initiated a criminal action against Party X. Party X was convicted
of design infringement and the PVC pipe clips in its store were
seized, along with related manufacturing machinery. Party X's
financial losses further increased when it could no longer fulfill
its contractual obligations.
Party X initiated an invalidation action to vacate Party Y's
industrial design registration. Party X claimed that Party Y's
design lacked novelty and distinctiveness. Party X claimed that
Party Y had filed its application to register the design with the
TPI despite knowing that the same product was widely used in the
market and existed in many sales catalogues. The Court invalidated
Party Y's registered industrial design on the grounds that it
was not novel and distinctive.
The Council of Appellate Circuits'
Party X later initiated a civil action claiming monetary and
moral damages which it had incurred as a result of Party Y
initiating the criminal action.
Party X claimed that Party Y had initiated the criminal action
despite knowing the design lacked novelty and distinctiveness and
the registration had since been invalidated. Accordingly, Party X
claimed that due to being convicted of design infringement in the
criminal action, it had suffered both moral and monetary
Party Y argued that although the design registration was later
invalidated, at the date when the criminal action and raids took
place, it held a valid registration which allowed Party Y to enjoy
the associated rights which arise from such a registration. Party Y
argued that the right to petition was a constitutional right and
even if these were later invalidated, the rights arising from a
registered design should not give rise to liability to compensate
Party X's losses.
The Council of Appellate Circuit upheld a decision that Party Y
must compensate Party X's damages. The court reasoned that
Party Y had unfairly benefited from the weak points of the
TPI's design registration system under which the novelty and
the distinctiveness of design applications are not examined.
The Design Decree Law
A general rule exists under Turkish Design Decree Law number 554
that invalidation of a design takes effect retrospectively. This
means that if a design is cancelled, it will be removed from the
registry as if it had never been in force. The Design Decree Law
also protects registrations granted by the TPI. It states that the
retrospective effect of an invalidation decision will not affect
decisions regarding infringements of design rights which are
reached and enforced before the invalidation. The Design Decree Law
provides an exception to this rule though, stating that the
retrospective effects of invalidation do not harm claims for
damages which have arisen due to the acts of a design owner
registering the design in bad-faith (Article 45).
In these circumstances, the Council of Appellate Circuits ruled
that the Article 45 exception should be carefully examined. The
Court said that if it is determined that the design holder
registered the design in bad-faith, the design holder should be
liable to compensate damages caused by the registration.
Although the Design Decree Law ostensibly gives the right to
claim compensation from the owner of an invalidated design, the
courts are reluctant to accept that bad-faith exists and tend to
protect registrations granted by the TPI. The general idea with
this practice is to maintain confidence in registrations granted by
the governmental authority.
Considering previous bad examples in Turkey, it is very
important for the Council of Appellate Circuits to require the
design owner to compensate damages incurred by parties which have
used the subsequently invalidated design in bad faith. These
decisions will force applicants to think twice about misusing a
registered design and inappropriately taking advantage of the
TPI's design registration system due to the potential risk of
having to pay compensation to parties against which they have used
the design in bad-faith.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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The chapter on the UK summarises the IP court and litigation system in the UK, recent developments in relation to IP law and practice, the forms and availability of IP protection and trends and outlook in the IP sphere.
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