Turkey: Goods Subject To Transit Regime Do Not Constitute Trademark Infringement Under The Industrial Property Law No. 6769 According To A Recent Decision Of Istanbul Regional Court Of Appeals

Last Updated: 7 March 2019
Article by İbrahim Barış Sayar

Istanbul Regional Court of Appeals ("RCA") has ruled in a very recent decision that trademark holders cannot prohibit (counterfeit) goods under transit regime since such act is not clearly regulated as an act of trademark infringement under the Industrial Property Law No. 6769 ("IPC") of Turkey. Before explaining the legal grounds of this decision; it is worth to mention the background of the matter and the situation when the abolished Decree-Law No. 556 Pertaining to the Protection of Trademarks ("Decree-Law No. 556") is in force.

A. The situation before January 21, 2009

Decree-Law No. 556 has been entered into force on June 27, 1995 and implemented to trademark related disputes until January 10, 2017 when the IPC is entered into force. Article 9 of Decree-Law No. 556 was titled as "Rights Conferred by a Registered Trademark" and Article 61 was titled as "Acts Considered as Trademark Infringement". Both articles have been changed on January 21, 2009 with the Code No. 5883. Before this amendment made in 2009; trademark holders were entitled to prevent third parties from doing inter alia "...importing or exporting goods under the sign" as per Article 9/1-c and acts of "the sale, distribution, putting to commercial use or importation, or holding for such purposes, of goods bearing a trademark that is known or should be known to be an unlawful imitation, by using of an identical or confusingly similar trademark" are considered infringements of a trademark as per Article 61/c of the Decree-Law No. 556. Within this scope, there was no clear provision about transit goods under the Decree-Law No. 556 until January 21, 2009 and the issue of whether trademark holders can prohibit the goods under transit regime due to the trademark infringement or not was unclear. There were various contradictory decisions given by the Court of Cassation ("CoC") some of which accepted these acts as trademark infringement and some of which did not.

B. The situation after January 21, 2009 and until January 10, 2017

As of January 21, 2009, some of provisions of Decree-Law No. 556 has been amended. Accordingly, a wording of "the entry of the good carrying the sign into the customs area, such good being subject to a transaction or use approved by the customs" was included to Article 9/1-c of the Decree-Law No. 556 to enable to attack goods under transit and other custom regimes approved/applied by Customs as well as the act of "to place at the customs area, is subjected to a process or a usage, which had been approved by the customs for such purposes" was included to Article 61/c as infringement of a trademark. After making the said amendment, discussions ended and vogue wording of "such good being subject to a transaction approved by the customs" was interpreted to cover several custom regimes including transit regime applied by customs meet this requirement. Since then and until the entry into force of IPC on January 10, 2017; there has been established practice of CoC stating that goods under transit regime can constitute infringement of a trademark.

C. The situation under the IPC and the recent decision of Istanbul RGA

The IPC has entered into force on January 10, 2017 and abolished the Decree-Law No. 556. The relevant articles of IPC is quite similar to the wording of Decree-Law No. 556 before its amendment in 2009. Accordingly, trademark holders is entitled to prevent inter alia "...importing or exporting the goods under the sign" as per Article 7/3-c of the IPC and custom regimes are not regulated as a trademark infringement either. Practitioners had some concern about IPC's interpretations by courts considering it remains silent on the issue and there is no CoC decision on the IPC yet since it is quite new.

Although the provision of the IPC is limited with "the export or import of the good carrying the sign" without the wording of "such good being subject to a transaction approved by the customs" regulated in the Decree-Law No. 556; most of practitioners were of the opinion that IP courts should interpret the IPC broadly and stick to established practice of CoC on the grounds that the aim of IPC is harmonize the Turkish trademark law with recent EU directives as well as there is no clear wording within the preamble of IPC that transit regime is excluded from scope of the trademark protection.

In the dispute subject to the decision of Istanbul RCA on the matter; (counterfeit) goods loaded from Pakistan and goes to Romania through Turkey by transit trade has been suspended due to trademark infringement by a Custom Directorate in Iran Border. According to relevant legislation; the trademark holder shall have to provide the relevant Custom Directorate with a Preliminary Injunction ("PI") decision for the continuance of initial suspension. The trademark holder filed its PI request before First Instance Civil Court of IP Rights; however the First Instance IP Court decides for the refusal of the PI request on the grounds that "transit pass or being subjected to a process or a usage, which had been approved by the customs for such purposes may be prohibited" is not mentioned under the IPC as well as transit regime is not regulated under the infringement of a trademark.

The trademark holder then filed an appeal against this decision before Istanbul RCA on the grounds that the IPC shall have to be interpreted to cover transit regime even if it does not have a clear wording about it since the wording of IPC is similar to the wording of the abolished Decree-Law No. 556 before its amendment in 2009 and there are precedents of CoC accepting such acts as a trademark infringement as well as the Turkish IP doctrine has the same perspective in that period. Besides, it is clearly stated in preamble of the IPC that acts which can be prohibited by trademark holders are not numerus clausus and the transit pass is regulated under article 9/4 of Regulation (EU) 2017/1001 on the European Union Trade Mark which the IPC aims to harmonize the Turkish legislation with.

Istanbul RCA evaluated the matter and decided for the refusal of the appeal filed by the trademark holder as well. In its reasoned decision; Istanbul RCA stated that while "importation or exportation of the goods" are considered as an act of trademark infringement under the IPC; act of "to subject to a process or a usage, which had been approved by the customs for such purposes" is not mentioned. Besides, transit regime has not been regulated between articles 50 to 60 of TRIPS agreement which Turkey is also a party to and transit regime cannot be considered as an act of importation or exportation of the goods. As per the procedural law; it is not possible to further appeal decisions of RCA related to PI requests before CoC and therefore RCA's decision on the matter is final and binding.

Although the opinion of CoC on the matter is currently unknown, the decision of Istanbul RCA is important since it is one of the most recent decisions which reveals the view of IP Courts on this controversial topic that whether custom regimes including transit regime will be considered as trademark infringement under the IPC or not since it does not have a clear wording thereof. Accordingly, trademark holders may take that it is not possible to prohibit the (counterfeit) goods subject to transit regime entering in Turkey under the IPC due to trademark infringement and therefore, they shall consider attacking such (counterfeit) goods subject to transit regime in the arrival country.

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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