Contract manufacturing is a commonly used method which is used by %70-80 of exporting companies operating in textile sector in all around the world. Foreign companies are also manufacturing their products in all around the world, especially in Turkey. However, Turkish manufacturing companies have some risks in such transactions.
Registered trademarks are protected under the Decree-Law on the Protection of Trademarks of Turkey numbered 556. This protection constitutes some limitations in terms of production which shall be analyzed in two aspects:
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If the foreign trademark is registered abroad and there is no other registration relating to such trademark in Turkey
The trademark owner shall have products produced in Turkey under its brand. Since no other registration and/or application providing the owner/applicant to prevent the usage of such trademark within the boundaries of Turkey, the owner will be entitled to manufacture such products under its foreign trademark. -
If the same trademark is both registered abroad and in Turkey under different owners
Rarely, a same trademark may be registered by different owners in different countries. In such cases, the registration dates shall be important to determine the priority. In some cases, the production may constitute a breach of trademark. In assumption of the foreign trademark has been registered in Turkey earlier, Turkish manufacturer shall not produce products under such foreign registered brand, since such brand is registered previously under the name of another person in Turkey. Decree-Law No. 556 on the Protection of Trademarks restraining the use, product, import and put on the market of the products under the registered trademark enables the Turkish trademark owner to demand material and immaterial damages and also file a criminal complaint about the manufacturer. Also it shall constitute an unfair competition under The Law No. 6012 Turkish Commercial Code. In assumption of the brand has been registered in foreign countries earlier, the foreign trademark owner shall file a suit by claiming the invalidity of the registration in Turkey. However, there is a possibility that the case shall be end up with the dismissal of action.
Abovementioned problems shall remain in the past with the effectiveness of the Trademarks Draft Code, which will possibly be accepted on future days before Grand National Assembly of Turkey. The new code regulates the exception in the scope of rights arising from trademark registrations. According to Article 12 of the Trademarks Draft Code, in case the trademark registered abroad is registered under the name of a person in Turkey following the registration date of such trademark abroad, the owners of the trademarks registered abroad shall make products manufactured and stocked in Turkey by meeting the conditions stipulated as followed; not putting the products on the market in Turkey, make the products manufactured only for export, and provide the information and documents about the manufacturing and export to the right owner.
All abovementioned conditions shall be met cumulatively by such owner. All rights arising from a registered brand under the Trademark Code shall be claimed to the foreign trademark owners, only if they act contrary to this provision.
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.
