Comprehensive changes have been introduced to Turkey’s Intellectual and Industrial Property regime. New legislation has been eagerly awaited in Turkey, which now unifies provisions for prosecution and enforcement of rights into a single Law (primary legislation) which includes trademarks, patents, utility models, designs and geographical indications.
The Industrial Property Law Numbered 6769 (“IP Law”) was published in Official Gazette number 29944 on 10 January 2017, with the majority of provisions entering into effect on the same date.
The new regime reconciles provisions were previously addressed by separate pieces of Decree Laws (secondary legislation). However, Decree Laws will continue to apply to application procedure for trademarks, patents, designs and geographical indications made before 10 January 2017.
The Turkish Patent Institute’s name has also changed, to now become the Turkish Patent and Trademark Institution (“TPTI”).
Significant Changes for Common Provisions:
– Fixed time periods: Unless otherwise stated, all time periods become two months. For trademarks, the opposition period is shortened from three months to two months. For designs and geographical indications, this period will be three months.
– Registration is no longer a defense in infringement actions: Infringing third parties will not be able to use their registrations as defense.
– Compensation and Seizure: Right holders cannot raise infringement and seizure complaints against third parties if they already obtained compensation from a counterparty for damages, but failed to seize the offending goods.
– International Exhaustion: The international exhaustion principle is specifically stated to apply.
– Right Ownership in Universities: All patents/designs invented/ made by scientific staff (including regular students) while at work will belong to the university.
– Lack of Criminal Provisions: While providing the right to take criminal actions against trademark infringements, The IP Law does not include criminal provisions for patents, industrial designs and geographical indications.
Specific Changes for Trademarks:
– Co-existence: Consent letters are now accepted as a legitimate method to overcome a provisional refusal decision, based on the existence of an earlier trademark.
– Non-use defence: In opposition proceedings based on similarity, where the opponent’s trademark is registered for five or more years, the TPTI is now entitled to ask (at the applicant’s request) for proof of the use, as of the filing date or date of priority of the later trademark application. Likewise, during cancellation proceedings based on similarity, defendants can now request proof of use.
– Ex-officio cancellation: The TPTI becomes the authorized body to consider and determine requests for revocation of trademarks based on non-use as well as the claims about generic and misleading trademarks. The TPTI will begin accepting these claims seven years after the IP Law comes into force (10 January 2024).
– Loss of Right Due to Remaining Silent: The IP Law defines the silence period as being five years, running from when the senior right holder knows (or is deemed to be informed) about use of the trademark and has not taken any action within that period.
Specific Changes for Patents:
– Post-Grant Opposition System: The IP Law introduces a post-grant opposition system, whereby third parties can now oppose a patent within six months of publishing the decision stating that the patent is granted.
– Compulsory License Criteria Expanded: In addition to the criteria listed in Decree Law, The IP Law introduces following grounds for compulsory license:
– Export of pharmaceutical products in case of public health in other countries, in line with the TRIPS Agreement.
– Plant breeders which cannot develop a new breed without infringing a patent.
– Patent owners which behave in a manner to restrict, prevent or damage market competition.
– Omission of Protection for Patents Granted Without Substantive Examination: It is now compulsory to request a substantive examination within three months of notification of the search report.
– Non-Patentable Biotechnological Inventions: The scope of non-patentable inventions is expanded. Accordingly, biological processes regarding plant or animal varieties (or production thereof) are considered non-patentable. An exception applies to microbiological process, or products obtained by means of such process.
– Reviving Abandoned Patents Due To Non-Payment of Maintenance Fees: Patent holders can revive a patent which has lapsed due to failure to pay the annual maintenance fee in time.
Specific Changes for Designs:
– Protecting Unregistered Designs: Unregistered designs will be protected for three years, provided they are being made available to the public for the first time in Turkey.
– Novelty Criteria for Preliminary Examination: Among other ex officio examination criteria, novelty is also introduced as a criteria for the preliminary examination step.
– Use of Equivalent Parts: The use of the equivalent parts which are confirmed and published by Ministry of Science, Industry and Technology will not constitute design infringement.
– Bad Faith: Bad faith will be a ground for oppositions and cancellation actions.
– Protection for Parts of Joint Products: Visible parts of joint products can also enjoy design protection if they meet the requirements.
Specific Geographical Indications:
– Traditional Product Names: Parallel to EU regulations, protection is extended to traditional product names which do not fall under the scope of geographical indications.
– Producer groups as Applicants: Regardless of their legal entity, producer groups will also be entitled to file applications.
– Publication by TPTI: Applications will now be published in the Official TPTI Bulletin, instead of the Official Gazette or local newspapers.
– Amendment requests: If a change occurs within the scope of a registered geographical indication, the relevant parties will be able to request amendment. Application process will apply to these requests.
– Short Control Periods: The control period for use of geographical indications is reduced from every ten years to now be annual.
Please see this link for full text of the IP Law (only available in Turkish).
For the second time, comparative advertising has been postponed in Turkey, now becoming possible from 1 January 2018 onwards. From that date, advertisements will be allowed to include competitors’ titles, trademarks, logos or other distinguishing marks or phrases, as well as commercial names and company names (more). Clarifying provisions have also been specifically introduced for advertising of food products and electronic communication services.
The Regulation To Amend The Regulation On Commercial Advertisement and Unfair Commercial Practices (“Amendment Regulation”) was published in Official Gazette number 29938 on 4 January 2017.
The Amendment Regulation introduces provisions for comparative advertisement about food products. Accordingly, advertising cannot include comparison of health claims, but can include comparison of nutrition claims.
Moreover, specific provisions for the advertisement of electronic communication services has been set forth in the Amendment Regulation. For advertisement of electronic communication services, the following requirements apply:
– If internet speed and network coverage is stated, information must include the fact that that promised speed and network coverage may differ depending on infrastructure, geographical circumstances, network density, device used, building location. The information must be given in a manner and duration which consumers can easily perceive.
– Advertising must not give the impression that internet speeds available in test or laboratory circumstances will be provided to the consumer.
– If any fair use quota, speed quota or similar restriction exists, it must be clearly indicated.
Until 1 January 2018, the Regulation on Implementation Fundamentals of Commercial Advertisement and Announcements will continue to apply (Temporary Article 1(3) of the Law), including the prohibition on use of “names of compared goods, services or trademarks” in comparative advertisements (Article 11).
Please see this link for full text of the Amendment Regulation (only available in Turkish).
From 1 January 2017, employers must enrol all employees into an Individual Pension System if they are under 45 year’s old and Turkish citizens. Employees can terminate their enrolment in the pension scheme within two months of being notified of their enrolment (more). Further details of the transition schedule and how the scheme will work have now been announced via secondary legislation.
The Regulation Regarding Procedures and Principles of Auto-Enrolment of the Employees to the Employee Pension Scheme by Their Employers (“Regulation”) was published in Official Gazette number 29936 on 2 January 2017, effective from 1 January 2017.
The Regulation outlines details of:
– A gradual transition schedule
– Which workplaces and employees are included in the scheme
– The contribution amount to be deducted from employee salaries.
– The procedures and principles regarding how the scheme will work.
Accordingly, employees will be gradually and automatically included in the scheme pursuant to the following calendar.
When determining the number of employees, all employees of the same employer should be counted and added together, including employees working at different locations.
The employee contribution amount is 3% of the base salary to premiums or base salary to pension contributions, respectively. The contribution amount will be deducted from the employee’s salary and transferred to the related pension company.
Salary paid to the employee for works done before the employee was included in the scheme cannot be subject to any contribution deductions.
Please see this link for full text of the Regulation (only available in Turkish).
Turkey has introduced a support scheme for investments into R&D, innovation, and high value-added projects. The scheme aims to encourage investments which support the country’s critical current and future needs, as well as provide supply security, reduce foreign dependency and realize technological development. To qualify, the fixed investment amount should be at least US $100 million and be made for purposes which are consistent with the scheme’s intentions.
The Ministry of Economy (“Ministry”) published the Decision on Support for Project Based Investments (“Decision”), in Official Gazette number 29900 on 26 December 2016.
Qualifying investments can potentially receive:
– Exemptions from customs duties.
– Value Added Tax exemptions and refunds.
– Tax deductions or exemptions.
– Reduction in employers’ contributions to social security premiums.
– Support with income tax withholding.
– Support for qualified employees.
– Interest or grant support.
– Capital contribution.
– Energy support.
– Public procurement guarantee.
– Land allocation for investments.
– Infrastructure support.
– Exemptions from allocation, permit, or license restrictions.
A Support Decision will be published for approved investments, as well as an investment incentive certificate, stating details of the government support (features, conditions, dates, project period, etc).
Investment transfers are subject to the Ministry’s approval in accordance with the period and terms determined in the Support Decision.
The investor is responsible for failure to complete the investment within the determined time period. If the investor fails to meet obligations foreseen in the Support Decision, the taxes will be collected, with default interest (but without imposing tax loss penalty). Other support will also be withdrawn in accordance with the Law On Asset Collection Procedures.
If an investor benefits from support under the Decision, he or she cannot benefit from the other government supports.
Please see this link for full text of the Decision (only available in Turkish).
The Turkish Competition Board (“Board”) recently published a short-form decision concluding that Booking.com B.V. had breached Article 4 of Law on Protection of Competition Number 4054, by its contacts with partner accommodation facilities including price and quota parity, as well as most favored customer clauses (“MFC Clauses”). Accordingly, the Board imposed an administrative monetary fine of 2,543,992 TL.
The Board recognized MFC Clauses as violations for the first time in June 2016, imposing a 427,977 TL fine on major online platform Yemeksepeti (more). In the Yemeksepeti decision, the Board stated that MFC Clauses are effectively price protection mechanisms within supply contracts. Their overall effect is that the seller cannot offer a lower price on other platforms and this creates an exclusionist effect on the market.
Although the Yemesepeti decision was based on abuse of a dominant position, the Board issued the Booking.com fine based on violation of a legislative provision prohibiting anti-competitive agreements (Article 4 of Competition Law Number 4054).
Despite differing basis for the administrative fines, the Board underlines the same competitive problems arising from MFC Clauses in both decisions.
Viewed collectively, the two decisions suggest the Board may initiate other investigations into contractual limitations, including price parity clauses and MFC Clauses.
The Board initiated its investigation into Booking.com in August 2015 (more). A long-form version of the Board’s decision is expected in the near future, which will include further details about the Board’s reasoning.
The full text of the Board’s short-form decision is available at this link (only available in Turkish).
Turkey’s Central Bank has updated the default interest ratio to 10.75% for late payments made to creditors in the context of commercial transactions for goods and services. The minimum compensation amount which creditors can claim for recovery cost has also been updated to 150 TRY.
The Communiqué on Default Interest Ratio Determination of Late Payments Made to the Creditors With Regards to Provision of Goods and Services (“Communiqué”) was published in Official Gazette number 29936 on 2 January 2017, entering into effect on 1 January 2017.
In January each year, Turkey’s Central Bank determines the default interest ratio for late payments in delivery of goods and provision of services, where no default interest rate exists in agreements or the relevant provision is invalid in relation thereto are not valid (Article 1530, Turkish Commercial Code). The Central Bank must also set the compensation recovery amount.
Accordingly, the Communiqué sets the 2017 rates as:
– 75% default interest rate for late payments where no default rate is set in the agreement, or the relevant provision is invalid.
– 150 TRY as the minimum compensation amount for recovery cost.
Please see this link for the full text of the Communiqué (only available in Turkish).
Turkey has amended legislative arrangements for electricity consumer tariffs. Changes apply to pricing methods for consumers to use electricity distribution systems, expanded definitions for technical and non-technical electricity leakage and losses (now including losses caused by illegal uses), as well as revised rules for determining last resort procurement prices.
The Regulation on Amendments to the Electricity Market Tariffs Regulation (“Amendment Regulation”) was published in Official Gazette number 29917 on 13 December 2016. The Amendment Regulation makes changes to the Electricity Market Tariffs Regulation.
Notable changes introduced by the Amendment Regulation include:
– The distribution price paid by consumers is now limited to the expenses arising from connection lines built to connect a consumer’s interior wiring to the distribution network. Formerly, the distribution price was determined based on all expenses arising from connecting consumers to the distribution network.
– The definition of the technical electricity loss has been amended to now also include losses caused by illegal uses. The updated definition states that technical loss is the difference between the energy entering the distribution system and the amount of energy accrued by the consumers in the distribution system arising out of a technical loss and / or illegal use, which effects the cost of the distribution company and not caused by a technical cause. Previously, technical losses only included losses accrued during the transfer of energy via distribution networks.
– The prices for use of electricity distribution system which will be reflected to consumers must now be determined in a manner which does not exceed the target ratio determined by the Energy Market Regulatory Board.
– Last resort procurement prices paid by high or low consumption consumers will now be determined based on:
– Investment costs and/or operational expenses required for operation (such as invoicing and customer services costs, retail sale service costs).
– Any and all costs for services and expenses within the scope of last welding operations (such as energy supply costs).
Please see this link for the full text of the Amendment Regulation (only available in Turkish).
Turkey’s Energy Market Regulatory Authority (“Authority”) has introduced changes to official names, types and Custom Tariff Statistics Position (“CTSP”) numbers, as well as classifications for marketable petroleum products. The Authority has also announced official names for marine and aviation fuels, since earlier Decisions only included CTPS numbers for these fuels.
The Authority’s Decision regarding Crude Oil, Fuel Oil, Bunker Oil, Base Oil and the Substances Related to Petroleum (“Decision”) was published in Official Gazette number 29913 on 9 December 2016, entering into effect on 1 January 2017. The Decision repeals Decision number 5922, published on 17 December 2015.
The Decision continues existing classifications for crude oil, fuel oil, bunker oil, base oil and substances related to petroleum, as well as import rules and documentation, and CTSP numbers.
Please see this link for full text of the Decision (only available in Turkish).
From 3 January 2017, camera systems must be installed in LPG tube distribution centres and retail outlets, as well as where tubes are stored. The systems should detect people entering or exiting the workplace. Video records must be saved for 30 days and may only be shared with competent authorities. The requirement is added as an obligatory requirement for business permits, under the Regulation on Business Permits.
The Amendment Regulation Regarding Regulation on Business Permits was published in Official Gazette number 29937 on 3 January 2017. Please see this link for full text of Amendment Regulation (only available in Turkish).
Turkey’s Ministry of Justice announced increased 2017 fees for notification and rogatory requests outside of Turkey, as well as fees for serving notifications via the relevant country’s legal authorities.
The Communique Regarding Principles And Procedures To Be Applied To Out Of Country Notification And Rogatory Requests (“Communiqué”) was published in Official Gazette number 29928 on dated 24 December 2016, entering into effect on 1 January 2017.
Accordingly, the 2017 mailing fee for notification and rogatory requests are:
– To the Turkish Republic of Northern Cyprus: Increase from TRY 25 to TRY 27
– To other countries: Increase from TRY 48 to TRY 52.
The Communiqué stresses that notifications will be served in accordance with the respective country’s procedures (except where a notification is being served to a Turkish citizen out of Turkey, via the Turkish Embassy or the Consulate).
The Communiqué states 2017 fees for serving notifications through the relevant country’s legal authorities:
Please see this link for full text of the Communiqué (only available in Turkish).