Turkey: Liabilities Of Internet Hosting Providers On Electronic Commerce In Turkey

Last Updated: 17 January 2015
Article by Deniz Yetimalar

As electronic commerce ("e-commerce") has become widespread over the past decade, it has also become increasingly prone to abuse that could significantly hinder the business of internet hosting providers. E-commerce may be defined briefly as, the promotion, selling and marketing of products and services online. A significant number of companies use e-commerce to ply their trade in Turkey and around the world.

This article looks at the latest development in the field of trademark law, the recent Supreme Court Assembly of Civil Chambers of Turkey (the "SCACC") decision concerning a trademark infringement dispute through e-commerce, in which SCACC has set out the "notify-remove principle".

One of the most common methods of e-commerce is providing an environment for promoting, selling and marketing for products and services of multiple companies through websites. E-commerce companies which provide such environments are called "internet hosting providers" and they run the risk of being party to a dispute with their users at the fields of law of obligations, commercial law, consumer protection law, competition law and intellectual property law. Disputes regarding breach of trademark are the primary of these risks. Despite the fact that e-commerce companies provide environments for promoting, selling and marketing of the products and the services and the actual sale is made by the users; the e-commerce companies could be responsible for trademark infringement collectively with their users, if the products they are offering to sell are imitations of a registered trademark.

The subject of this article is designated as "the collective liability of internet hosting providers for offering to sale counterfeit products towards trademark right holders". Our research concerns a current SCACC ruling on a related dispute; therefore this article has the characteristics of a judgment review.

The dispute in issue concerns the sale of counterfeit products using the registered trademark of a well-known cosmetics company through the website of an internet hosting provider. The cosmetics company filed a lawsuit against the hosting provider claiming counterfeit products were being sold using its registered trademark and these transactions form trademark infringement and unfair competition and claim declaration and banning of unfair competition, prevention of infringement, stopping the sale, recalling and destruction of counterfeit products and compensation of damages for mental anguish. As result of this lawsuit, the Supreme Court Assembly of Civil Chambers of Turkey set out a new principle called "notify-remove principle" and established a precedent determining the basis of these claims; which would be discussed herein.

After the motion date of this case, on May 4, 2007 the aforementioned "notify-remove principle" became a law on "Turkish Law on Regulation of Publications on the Internet and Suppression of Crimes Committed by Means of Such Publications" numbered 5651 (the "Law"). The fifth article of the Law expressly indicates that "internet hosting providers are not obliged to control the content for which it hosts or to investigate whether an unlawful action is realized there or not". This rule would apply as the general rule to the disputes which occur after this Law became effective. To the disputes that had occurred before this Law became effective, the "notify-remove principle" would apply, putting the internet-hosting provider under obligation to remove the content from publication on condition that the provider is notified. The Law also stated the responsibility principles of hosting providers when the content on their websites constitutes encouragement and incitement of suicide, sexual abuse of children, facilitating the use of drugs or stimulants, supplying the hazardous substances for health, obscenity, prostitution, providing a place and possibility for gambling, crimes set forth in the "Law on the Crimes Committed against Ataturk" numbered 5816 or infringement of personal rights.

The "Decree Law on the Protection of Trademarks numbered 556" which was in effect on the motion date stated merchandising counterfeit products using an identical or confusingly similar trademark without the consent of the proprietor of the registered trademark and associating these actions or facilitating them shall be regarded as infringement. Therefore, the internet hosting providers are responsible for offering to sale the products that unlawfully imitate the cosmetics company's registered trademark through their websites under the Decree Law.

The Supreme Court Assembly of Civil Chambers of Turkey rightfully pointed that internet hosting providers are not in a position to acquaint its users' violations of trademark infringements owing to the technical structure of internet; thus in order for them to be liable of such actions, they should be notified ahead. Consequently, liability of internet hosting providers would only be in question in the event that they have been notified of the infringement and have not removed the unlawful content from publication without valid ground. (This principle is denoted as the "notify-remove principle".) In other words, in order to hold an internet hosting provider liable of its users' trademark infringements, they should have been aware of the infringement. Failing this, it would not be possible to refer to internet hosting providers' fault. In order for the plaintiff's prevention of infringement and stopping the sale claims to be recognized, the defendant's fault is not required. However, the fault is required for the defendant to be liable of the consequences and compensating damages for mental anguish. It must be noted that, internet hosting providers' active acquaintance is required, not it's being in a position to know about the trademark infringement. In brief, an internet service provider would only be regarded faulty and held liable of the breach in event of it is informed of its user's trademark infringement, yet have not removed the content from its website without having just cause.

The "notify-remove principle" is in accordance with European Union Directive on Electronic Commerce and the U.S.A Digital Millennium Copyright Act. The Turkish litigation has set out a principle that protects the freedom of trade, which is also protected by TRIPS and TRIPS Paris Convention. Since the rulings of Supreme Court Assembly of Civil Chambers are binding under Turkish law, the "notify-remove principle" has become binding for all district courts and the departments of the Supreme Court of Turkey.

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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