Turkey: A Comparative Analysis Of Trademark Dilution In Turkish And Us Law Systems In View Of Precedent Decisions

Last Updated: 4 October 2019
Article by Damla Duyan and Belce Barış

In accordance with the Article 6/4 of the Industrial Property Code numbered 6769 which came into force on the date of January 10, 2017, "Trademark applications which are identical or similar to the well-known marks within the context of Article 6 bis of the Paris Convention, shall be refused upon opposition in respect of the identical and similar goods or services."

As per the Article in question, well-known trademarks that will benefit from protection have to be in well-known status in Turkey and within this scope, protection is provided only to identical goods and services or to goods and services of the identical type.

However, in cases where well-known trademarks are used in different goods and services, clients of these particular trademarks usually have a tendency to change their preferences in goods and services assuming that the owner of the well-known trademark resorted to expand their area of activity. Thus, the well-established bond between a well-known trademark and a business begins to wane and becomes diluted. Therefore, lawmakers have always aimed for providing protection not only to identical and similar goods or services but also to different goods and even services especially for trademarks that have managed to achieve well-known status in a society.

In respect thereof, Federal Trademark Dilution Act (FTDA) which provides protection against dilution in U.S. law defines the concept of dilution as "the lessening of the capacity of a famous mark to identify and distinguish goods or services".

In the United States, Trademark Dilution Revision Act (TDRA) which came into effect for the purpose of eliminating deficiencies posed by the Federal Trademark Dilution Act (FTDA) has granted trademark owners an authority that prevents the use of trademark by others which causes dilution by blurring or by tarnishing if the well-known status of the trademark is proven. As one can clearly see that in accordance with the laws of the United States of America, "blurring" and "tarnishment" are both key elements in defining the concept of trademark "dilution".

As a matter of fact, this can be seen in the decision of the United States Court of Appeals, Second Circuit on the case involved Starbucks Corp. and Wolfe's Borough Coffee Inc. as parties;

(United States Court of Appeals, Second Circuit. STARBUCKS CORPORATION, a Washington corporation, Starbucks U.S. Brands, L.L.C., Plaintiffs-Counter-Defendants-Appellants, v. WOLFE'S BOROUGH COFFEE, INC., a New Hampshire corporation doing business as Black Bear Micro Roastery, Defendant-Counter-Claimant-Appellee.)

Starbucks v. Charbucks Decision.

STARBUCKS CORP. acting as the party plaintiff in the action pended by the United States Court of Appeals, Second Circuit claimed that the expression of CHARBUCKS present in the product of "Mr. Charbucks Blend Coffee" which belongs to the company of Black Bear Micro Roastery owned by Wolfe's Borough Coffee caused "dilution" by "blurring" and "tarnishing" the trademark of STARBUCKS.

Unlike the ruling of the New York County Court where the original case was pending, Circuit Judge, Hon. Raymond Lohier came to a conclusion that Seattle-based STARBUCKS has no right to have an injunction enacted in order to stop sales of defendant's CHARBUCKS products by pointing out the STARBUCKS CORP. failed to prove that the Charbucks Marks are likely to cause dilution by "blurring" in Starbucks' well-known "Starbucks" marks. Despite the fact that STARBUCKS submitted evidence arguing that coffee bearing the expression of CHARBUCKS was over-roasted by third parties in New England, the Court of Appeals ruled that a use such as this would not cause any impairment in the quality of Starbucks and that there was no likelihood of "tarnishment" due to the fact that Black Bear announced its coffee product bearing the expression of "Mr. Charbucks Blend Coffee" as a first-class product.

In the related decision, it was additionally determined that the District Court interpreted indication types that were established to be diluting a well-known trademark in a very limited manner and accordingly a reassessment was requested from the New York County Court where the case was pending.

Although the "substantial similarity" between two marks is not a necessary condition for the dilution of a trademark, respective Circuit ruled that STARBUCKS and CHARBUCKS were not "substantially similar" and that the degree of similarity between these two marks were minimal by stating that the presence of "substantial similarity" is a necessary condition for the dilution of a well-known trademark. Moreover, respective Circuit further stated that CHARBUCKS and STARBUCKS expressions did not cause any confusion among consumers and that Starbucks had no evidence to assert the contrary.

As a consequence of the case pending in the respective Court of Appeals in the United States in 2001, the court placed the final judgement and ruled that the defendant may continue with sales of products bearing the expressions of "CHARBUCKS BLEND", "MISTER CHARBUCKS" and "MR. CHARBUCKS."

According to the US law, the concept of the dilution of a trademark is defined as the lessening of the capacity of a famous mark to identify and distinguish goods or services in abovementioned Trademark Dilution Revision Act (TDRA). In US law practices, the concept of dilution is explained in two elements which are diluting by harming the distinctive characteristic of a trademark (dilution by blurring) and diluting by harming the reputation of a trademark (dilution by tarnishment). According to the EU law, conditions like unfair exploitation (free-riding), harming the distinctive character of a trademark (blurring) and harming the reputation of a trademark (tarnishment) are considered as cases of dilution.

In Turkish Law, on the other hand, the definition of the concept of dilution is not stated clearly in any law text. However, regarding dilution, Established Court of Appeal Practices provide a definition stating "Utilization of a trademark in more than one mark may result in lessening of a well-known trademark's strength and its area of influence. This is called dilution of a trademark." (Court of Appeal, Assembly of Civil Chambers, Prec. 2013/11-1885, Dec. 2015/1161 and Date 8.4.2015).

As such, Article 6/5 of the Industrial Property Code No. 6769 forms the very basis of the concept of dilution in Turkish Law; "A trademark application which is identical with, or similar to, an earlier registered trademark or application irrespective of whether the goods or services for which it is applied or registered are identical with, similar to or not similar to those for which the latter trademark is applied for, and the use of the latter trademark without due cause would take unfair advantage of, or be detrimental to the distinctive character or the repute of the earlier trademark due to the reputation the earlier trademark has in Turkey; shall be refused upon opposition of the proprietor of that earlier trademark."

In accordance with abovementioned provision of the Industrial Property Code; in cases where a trademark application that may potentially take unfair advantage of an earlier registered trademark due to its degree of recognition or that may be detrimental to the reputation of the earlier registered trademark or that may yield results detrimental to the distinctive character of the earlier registered trademark that reached to a certain degree of recognition and was registered at an earlier date or applied for registration at an earlier date, the latter application shall be refused irrespective of whether the latter trademark shall be used in different goods or services.

Still, one cannot conclude that unfair advantage will be taken of a well-known trademark, that harm will come to the reputation of the well-known trademark or its distinctive character will be disrupted due to every use realized for different goods and services. Available conditions are required to be proven by the claimant depending on the very nature of the present case.

As a rule, the claimants are obliged to prove their allegations. In that case, the opposing party is required to prove that there is indeed a risk of unfair advantage should the applied trademark gets registered or there may be consequences which may potentially bring harm to the reputation or to the distinctive character of their well-known trademark, or at least should be convincing in terms of the presence of significant risks in this regard. According to what criteria is the presence of this risk determined? The degree of recognition of the claimant's trademark, the degree of similarity between marks, relation between goods and services involved by the marks and in what goods and services have the claimant's trademark reached a certain degree of recognition may be listed among the factors used in determining the presence of this risk. Said factors are assessed separately in themselves depending on the dynamics of every case.

For instance,

In the decision involving Rolls Royce, German Federal Court of Justice ruled that using famous Rolls Royce trademark in a whiskey advertisement constituted a clear violation even though there was no connection between the car manufacturer and the whiskey manufacturer.

However, in the decision involving Camel Tours, German Federal Court of Justice ruled for the dismissal of the action on the grounds that using the word "Camel" as in "Camel Tours" in the mark of a Turkish tourism agency did not constitute any violations since the use of "Camel" which symbolizes the Middle East in tourism services is quite widespread and would not be perceived in correlation with Camel Cigarettes.

Analogously, one can see that the Court of Appeal in Turkey does not automatically implement the Article 6/5 of the Industrial Property Code in terms of well-known trademarks and renders the judgement on whether one of the conditions is realized or not after conducting an examination on the evidence submitted by the plaintiff and experts' reports.

As a matter of fact, in accordance with the "TWIST" decision dated 25.10.2011, numbered 2011/14419 and recorded under the Merits number of 2009/12971 of the 11th Civil Chamber of the Court of Appeal;

the defendant operating in the food sector filed an application before Turkish Patent in order to have the expression of "TWIST" registered and the appeal filed by the plaintiff upon the publication of said application was ultimately rejected by the Re-Examination and Re-Evaluation Board.

In response, the plaintiff who is the owner of the TWIST trademark alleged that marks bearing the expression of "TWIST" are well-known, that they are a company operating in the clothing sector and that would eventually impair the trademark and would bring harm to its distinctiveness even if the defendant operating in food sector will use "TWIST" trademark in different goods and services. Therefore, the plaintiff filed a lawsuit and requested the nullity of the decision given by the Re-Examination and Re-Evaluation Board, invalidity of the trademark in case it gets registered as well as its erasure from the registry.

On the other hand, the defendant claimed that they would like to have the mark bearing the expression of "TWIST" registered only for "dried nuts and fruits" and there would be no likelihood of confusion and dilution since the plaintiff operates in the clothing sector and accordingly requested the dismissal of action.

Turkish Patent, acting as the other defendant party, stated that since there is no similarity in terms of goods and services between the defendant's application and the plaintiff's trademark, there would be no likelihood of confusion and defended the dismissal of the action. In the respective verdict issued by the Court of Appeal, it was stated that

"in accordance with gathered evidence and the expert's report, goods involved in the scope of the subject-matter application, and goods involved in the scope of the plaintiff's trademark fall in to two totally different sectors in respect of consumer profiles, production and distribution channels and sales points, moreover it is quite clear that these goods are not competing goods, therefore likelihood of confusion is out of the question, furthermore it is unlikely for the consumers of the goods involving "dried nuts and fruits" included in defendant's application and consumers of goods and services mentioned in the plaintiff's trademark to err due to correlation by association, additionally, the impediment for registration mentioned in the subclause b of the Article 8/1 of the decree law numbered 556..."

This statement shows that the Court of Appeal initially made a similarity evaluation between the marks subject to trademark within the scope of the Article 8/1-b of the decree law numbered 556 regarding the trademarks in dispute.

The verdict further stated that using marks that are identical or similar to the well-known trademark of TWIST in different goods and services only does not allow benefiting from protection within the scope of Article 8/4 of the decree law numbered 556, on the other hand it also stated that the likelihood of trademark dilution should be sought. Eventually, the Court of Cassation ruled for the dismissal of action

"...based on the grounds of the fact that 'dried nuts and dried fruits' involved in the scope of the defendant's application and 'clothing and textile materials' in which trademarks belonging to the plaintiff are well-known are completely different from one another, that it is not possible for the defendant's application to take unfair advantage of the recognition of the plaintiff's trademarks, to exploit them, to disrupt their reputation or to bear consequences that would potentially cause any impairment in distinctive character of the plaintiff's well-known trademarks, i.e. to dilute them, and that the conditions of rejection regulated in Articles 7/1-b, 8/1-b and 8/4 of the decree law numbered 556 did not realize with respect to the application of the defendant..."

Consequently, when well-known trademarks are used for different goods and services, one can observe the fact that the concept of "dilution" rises into prominence. In the quoted decision, the Court of Cassation also stated that at least one of the conditions for trademark dilution must be occurred or likelihood of occurrence of the said conditions must be present. Even though there are established Court of Cassation practices (e.g. General Assembly of Civil Chambers, D. 08.04.2015, M. 2013/11-1885, D. 2015/1161) that are in the opinion of that the owner of the mark that is the subject of application may get the chance to take unfair advantage of the reputation of the plaintiff's well-known trademark in cases where a mark that is identical or similar to a plaintiff's well-known trademark, even if it is in different goods or services that is, gets registered as a trademark, the Court of Appeal reached the conclusion that conditions of dilution were not present for marks that are in dispute in the abovementioned verdict. Accordingly, one can observe the fact that a trademark that is both well-known and highly distinctive will not lead to acquiring direct protection in terms of goods and services of different classes.

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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