Whether a trade name or business name can create trademark infringement and unfair competition, particularly in cases where the trade name is not used as a trademark, is a controversial issue in Turkey. This issue has been subject to numerous disputes under both Decree Law No. 556 Pertaining to Protection of Trademarks and the Industrial Property Code (the IP Code). The courts, by considering the applicable provisions of the legislation in force, as well as the specific facts of each dispute, have rendered decisions on this topic.
The issue was thoroughly discussed in the decision dated February 8 2023 issued by the Court of Cassation General Assembly of Civil Chambers (the General Assembly), which is the highest board of the civil chambers in the Court of Cassation (CoC) and its decisions are final. Its decisions are considered as precedents and these decisions are seriously considered by the lower-instance courts, unifying all previous rulings. It was concluded that trademark infringement may occur if there is a possibility of damage to the functions of the trademark, and use of trade name as a trademark is not a mandatory requirement for trademark infringement.
In the court action subject to the cited General Assembly decision, it was evaluated whether the use of the earlier trademark ‘MESA’ in the trade name of the defendant company constitutes trademark infringement and unfair competition against the plaintiff’s registered trademarks. The defendant conducts business for the same and similar services covered by the registered trademarks of the plaintiff.
The first-instance court decided to partially accept the court action because using the plaintiff’s ‘MESA’ trademark in the trade name of the defendant did not constitute trademark infringement, but such act constituted unfair competition pursuant to the Turkish Commercial Code. It was reasoned that the defendant did not use MESA as a trademark but only registered within its trade name. The appeal, filed by the plaintiff against the first-instance court’s decision, was accepted by the Regional Court of Appeals (the Regional Court).
The Regional Court called for determination and revocation of the trademark infringement and unfair competition, as well as for deletion of MESA from the defendant's trade name. Upon the defendant's appeal, the 11th Civil Chamber of the CoC reversed the decision by stating that the use of the trade name as a trademark is mandatory for trademark infringement, but the Regional Court resisted the reversal decision of the CoC. The resisting decision was appealed by the defendant.
In the final decision rendered by the General Assembly, the resisting decision of the Regional Court was found to be appropriate and was upheld. It was concluded that it is not a mandatory condition for the trade name to be used as a trademark for the infringement of the trademark rights. The decision was grounded on Article 7/3(e) and Article 29/1(a) of the IP Code, clearly ruling that using the sign as a trade or company name shall be considered as infringement of trademark rights.
It was also held that infringement of trademark rights may also occur if there is possibility of damage to the functions of the trademarks. Therefore, it was determined that the use of the registered trademark of the plaintiff – i.e., ‘MESA’ – in the trade name of the defendant company, which conducts business for the same and similar services covered by the plaintiff’s trademarks, constitutes trademark infringement against the plaintiff’s registered trademarks.
The Bakırköy 2nd Civil IP Court, in its decision dated July 12 2023, followed the February ruling of the General Assembly as precedent and adopted the same principles.
Before the enactment of the IP Code, it was accepted that the mere use of a prior-dated trademark in a trade name does not constitute trademark infringement. The trademark infringement was acknowledged if the trade name is used as a trademark. Indeed, intellectual property law scholars, academics and authors have stated that mere use of a prior-dated trademark in a trade name does not constitute trademark infringement within the meaning of Decree Law No. 556, and trademark use of the trade name is required.
Article 7/3(e) and Article 29/1(a) of the IP Code explicitly stipulates that using the sign as a trade or company name shall be considered as infringement. Therefore, the use of a trademark in a trade name will constitute trademark infringement not only when the trade name is used as a trademark, but also in cases where the use poses risk to the functions of the trademark.
Considering the above decisions, it is evident that the courts and scholars have adopted a consistent perspective: the use of a registered trademark in a trade name will constitute trademark infringement, even if the trade name is not also used as a trademark.
First published by ManagingIP in 30.10.2023.