1. On what basis can the main IPRs be assigned? What formalities apply?
Basis for patent assignment. Under the Intellectual Property Law No. 6769 (IP Law), a patent can be assigned in whole. A patent cannot be assigned in part.
Formalities for patent assignment. Under the IP Law, a patent assignment must be in writing and signed by both parties and notarised before a notary public.
Registration of a patent assignment with the Turkish Patent and Trademark Office (TPTO) is required for it to have effect against third parties. A short form of the assignment agreement is also accepted for recording purposes. The IP Law and its Implementing Regulation do not set a specific timeframe for registration. However, the assignment will only have legal effect against third parties upon registration and publication of it by the TPTO.
Utility Models
The same principles apply as for patents (see above, Patents).
Trade Marks
Basis for trade mark assignment. Trade marks can be assigned in whole or part for some of the goods or services for which the trade mark is registered. A trade mark assignment must be for the entire Turkish territory (IP Law).
In a trade mark assignment, goodwill in the trade mark is automatically assigned (but the parties can agree otherwise).
Formalities for trade mark assignment. Under the IP Law, a trade mark assignment must be in writing and signed by both parties and notarised before a notary public.
Registration of a trade mark assignment with the TPTO is required for it to have effect against third parties. A short form of the assignment agreement is also accepted for recording purposes. The IP Law and its Implementing Regulation do not set a specific timeframe for registration. However, the assignment will only have legal effect against third parties upon registration and publication of it by the TPTO.
Copyright
Basis for copyright assignment. Only the economic rights of the author can be assigned in whole or part under the Law on Intellectual and Artistic Works No. 5846 (Copyright Law).
The copyright holder cannot assign or waive their moral rights but they can license the right to use their moral rights.
Formalities for copyright assignment. An assignment of the author's economic rights must be in writing and the agreement must individually specify the rights being assigned (Article 52, Copyright Law).
There is no compulsory registration system for copyright in Turkey. There is a voluntary registration system with the Ministry of Culture and Tourism Directorate General for Copyright. If the copyright to be assigned has already been registered voluntarily, the assignment must be notified to the Ministry. Voluntary registration may be helpful to prove the existence of such transactions and the scope, terms, and ownership of the copyright in case of possible future disputes. There is no specific timeframe for voluntary registration.
Design Rights
Basis for design rights assignment. Design rights can be assigned in whole under the IP Law.
Assignment of a design in part is only possible if the registration covers multiple designs. In this case, the owner can only assign some of the designs covered by the registration.
Formalities for design rights assignment. Under the IP Law, a design right assignment must be in writing and signed by both parties and notarised before a notary public.
Registration of a design right assignment with the TPTO is required for it to have effect against third parties. A short form of the assignment agreement is also accepted for recording purposes. The IP Law and its Implementing Regulation do not set a specific timeframe for registration. However, the assignment will only have legal effect against third parties upon registration and publication of it by the TPTO.
Trade Secrets and Confidential Information
Basis for assignment. Trade secrets and confidential information can be assigned by agreement in whole or part. There is no specific regulation on this. Such an agreement is an ordinary assignment agreement subject to the general terms of contract law.
Formalities for assignment. There are no specific formalities for an assignment of trade secrets and confidential information. It is recommended to have the agreement in writing and signed by both parties with undertakings about non-disclosure and confidentiality.
There is no system for registration of trade secrets and confidential information in Turkey.
Domain Names
Domain names can be assigned under Article 13 of the Domain Names Regulation.
A registry agency authorised by the Information and Communication Technologies Authority deals with applications, renewal, cancellation, and transfers of domain names and provides templates for domain name assignments on its website.
To assign a domain name, the domain name holder must fill in such a template and the registry agency completes the assignment through the TRABIS system, the central online system for domain names of the Information and Communication Technologies Authority (Article 13, Domain Names Regulation). The TRABIS system was activated on 14 September 2022.
If the domain name has a ".com.tr" extension, the registered trade mark or trade mark registration application that is the basis of the domain name registration must also be assigned.
It is advisable to have an assignment of a domain name in writing between the assignee and the assignor for evidence reasons.
2. What main terms should be included in an assignment of IPRs?
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Names and addresses of the parties.
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Registration numbers of registered IPRs, application numbers for registration applications, or any other form of identification of the IPRs.
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For a partial assignment, the scope of the assignment, relating to:
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the goods and services for which a trade mark is assigned; and
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the specific design rights assigned (in case of multiple designs).
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Payment details (if any).
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An undertaking from the assignor (to prevent future disputes) that:
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confirms that there are no other registrations and/or applications for the same or similar IPR;
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confirms that there will be no further applications; and
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warrants that the assignor has full power to assign the relevant IPR.
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Additional obligations to register the assignment (for example, any papers that the assignor must sign).
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Rights to be assigned, expressly and separately stated using specific terms (for example, references such as "any media" must be avoided).
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Term of the assignment and the territory for which the rights are assigned, stated expressly.
IP Licensing
Scope and Formalities for IP Licensing
3. On what basis can the main IPRs be licensed? What formalities apply?
Scope of a patent licence. A patent licence is governed by the IP Law. Registered and applied for patents can be licensed on an exclusive, non-exclusive, and sole basis.
Unless the patent owner reserves its rights to use the patent, the patent owner cannot use the patent if the owner grants an exclusive licence of it.
Depending on the nature of the invention protected by the patent and the scope of the independent claims, a patent can be licensed in part for some of the claims. The licence can contain jurisdictional restrictions and time limits depending on the agreement of the parties.
Formalities for a patent licence. A patent licence must be in writing and signed by both parties (IP Law). No notarisation is required. Parties are free to determine the terms of the licence.
A patent licence does not need to be registered with the TPTO for it to be valid. Registration is beneficial for the licensee if the patent is assigned to a third party who is not aware of (and not able to discover) the licence. In such cases, if the patent licence is registered the licensee can enforce the licence against the third-party assignee of the patent.
The IP Law and the Implementing Regulation do not set a specific timeframe for patent licence registration.
Utility Models
Scope of a utility model licence. The same principles apply as for patents (see above, Patents).
Trade Marks
Scope of a trade mark licence. Registered and applied for trade marks can be licensed on an exclusive, non-exclusive, and sole basis (IP Law). Unless the trade mark owner reserves its rights to use the trade mark, the trade mark owner cannot use the trade mark if the owner grants an exclusive licence of it.
Trade marks can be licensed in whole or part for some or all of the goods and services for which the owner has used the mark. The parties can agree jurisdictional restrictions and time limits. The parties are free to determine the terms of the licence.
In a trade mark licence, the goodwill in the trade mark is also automatically licensed (but the parties can agree otherwise).
Formalities for a trade mark licence. Under the IP Law, a trade mark licence must be in writing and signed by both parties. No notarisation is required. Parties are free to determine the terms of the licence.
A trade mark licence does not need to be registered with the TPTO for it to be valid. Registering the licence is beneficial for the licensee if the trade mark is assigned to a third party who is not aware of (and not able to discover) the licence. In such cases, if the trade mark licence is registered the licensee can enforce the licence against the third-party assignee of the trade mark.
The IP Law and the Implementing Regulation do not set a specific timeframe for trade mark licence registration.
Copyright
Scope of a copyright licence. Under the Copyright Law both the economic and moral rights of the author can be licensed on an exclusive, non-exclusive, and sole basis. Copyright can be licensed in whole and part. The parties can agree jurisdictional restrictions and time limits. The parties are free to determine the terms of the licence.
The copyright holder cannot assign or waive their moral rights therefore a moral rights waiver cannot be included in a copyright licence. However, it is possible to license the right to use the author's moral rights.
Formalities for a copyright licence. A licence of the author's economic rights and of the author's moral rights must be in writing and signed by both parties and the relevant right being assigned must be specified individually (Article 52, Copyright Law).
There is no compulsory registration system for copyright in Turkey. There is a voluntary registration system with the Ministry of Culture and Tourism Directorate General for Copyright. If the copyright to be licensed has already been registered voluntarily, the licence must be notified to the Ministry. Voluntary registration may be helpful to prove the existence of such transactions and the scope, terms, and ownership of the copyright in case of possible future disputes. There is no specific timeframe for voluntary registration of a copyright licence.
Design Rights
Scope of a design rights licence. Under the IP Law, registered and applied for design rights can be licensed on an exclusive, non-exclusive, and sole basis.
Design rights can be licensed in whole or part. A partial licence is only possible if the registration covers multiple designs and the owner licenses some of the designs covered by the registration. The parties can freely agree on jurisdictional restrictions and time limits.
Formalities for a design rights licence. A design licence must be in writing and signed by both parties (IP Law). No notarisation is required. Parties are free to determine the terms of the licence.
A design right licence does not need to be registered with the TPTO for it to be valid. Registering the licence is beneficial for the licensee if the design right is assigned to a third party who is not aware of (and not able to discover) the licence. In such cases, if the design licence is registered the licensee can enforce the licence against the third-party assignee of the design.
The IP Law and the Implementing Regulation do not set a specific timeframe for design right licence registration.
Trade Secrets and Confidential Information
Scope of a licence. Trade secrets and confidential information can be licensed on an exclusive, non-exclusive, and sole basis. They can be licensed by agreement in whole or part, with jurisdictional restrictions and time limits as the parties wish. No specific regulation applies and the licence is subject to general contract law provisions.
Formalities for a licence. There are no specific formalities for a licence of trade secrets and confidential information. However, a written agreement in which the scope of the licence is clearly defined with appropriate provisions to maintain confidentiality is recommended.
4. What main terms should be included in an IP licence?
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Names and addresses of the parties.
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Registration numbers of registered IPRs, application numbers for registration applications, or any other form of identification of the IPRs.
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For a partial licence, the scope of the licence, concerning the:
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goods and services for which a trade mark is licensed; and
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the design rights being licensed (in case of multiple designs).
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Licence term and the scope of the territory for which the licence is granted.
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Whether the licence is granted on an exclusive, non-exclusive, or sole basis (if the licence is silent on this, it is assumed to be non-exclusive).
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Powers granted to the licensee, for example, whether a sub-licence is allowed (if the licence is silent on this, it is deemed that sub-licensing is not allowed).
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Royalties (if any).
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Warranties and liability provisions.
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Obligations to record the licence.
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Other general business terms, depending on the relationship between the parties, including clauses on:
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governing law;
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jurisdiction;
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penalties; and
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confidentiality.
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Research and Development Collaborations
Improvements and Derivatives
5. How should research and development collaborations address improvements and derivatives?
There is no specific law/regulation on IPRs subsisting in improvements or derivatives due to research and development (R&D) collaborations. Therefore, it is essential to carefully set them out in the collaboration agreement.
In such agreements, improvements/derivatives should be clearly and specifically defined to avoid any future confusion/dispute. Even though in some cases key definitions such as know-how, material, and product also cover improvements/derivatives, it is advisable to include a separate definition of an improvement/derivative in the agreement.
Under the Copyright Law, the right to exploit a work by adaptation belongs exclusively to the author. Similarly, under the IP Law, use of a patented innovation/invention is subject to permission or licence from the right owner. In these cases, a party who wants to use an IPR of another party while creating improvements/derivatives must obtain permission or a licence from the right owner.
Particular importance should be given to the determination of ownership of IPRs resulting from improvements/derivatives. In practice, there is a fine line between an improvement/derivative and the contribution/effort of each party to generate it. It may be problematic to determine who owns the IPRs resulting from improvements/derivatives without a term in the agreement. In principle, it is possible to apportion these IPRs according to the contribution of each party. Parties can also decide to vest such IPRs in a specific party, regardless of their contribution. Whether improvements/derivatives are patentable/copyrightable or not, including separate terms about their ownership before engaging in such a project is highly advisable.
To realise the intended objectives of such a collaboration project it is important to include terms that allow both parties to use the subject matter of the improvements/derivatives in the context of the project, regardless of the IPR ownership.
However, terms that regulate how to apportion/assign the ownership of such IPRs may breach antirust and competition rules, depending on the circumstances. For instance, under the Law on the Protection of Competition No. 4054, agreements, decisions, and practices which prevent, distort, or restrict competition between undertakings and abuse of dominance situations are stated as examples of unfair competition. If a dominant party uses its superior position to have all the IPRs assigned to it, there is a risk of antitrust issues. In this case, the assignee may consider offering reasonable compensation and/or a licence of the IPRs to the assignor.
Joint Ownership of IP
6. How does joint ownership of IP arise?
7. What key issues arise in terms of the parties' rights to exploit and enforce jointly owned IP? How should these issues be dealt with in the agreement between the parties?
Exploiting and Enforcing Jointly Owned IP
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Exploit the rights freely relating to their share.
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Use their share of the IPR freely.
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Take necessary measures to protect their share.
Joint Ownership Provisions in Collaboration Agreements
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Clear definition of the parties' contributed IP that each party brings to the collaboration (background IP).
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Clear definition of the jointly created IP generated by the collaboration and/or improvements/derivatives.
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Apportioning and determining ownership of jointly created IP and/or improvements/derivatives (see Question 5).
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Prosecution and maintenance of jointly created IPRs subject to the collaboration, such as defining the party responsible for the registration and/or renewal of IPRs used, payment of the relevant fees, and corresponding with the competent authorities.
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Licensing and other IPR exploitation. It is important to determine the scope of use of the jointly created IPRs by each party. If one party is willing to solely hold all the IPRs, reasonable compensation should be paid to the other party by allowing use of the IPRs in the scope of the project. During the commercialisation of the IPRs, it is practical to identify the authorised party who will grant licences to third parties and include a specific mechanism for these purposes.
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Enforcement of IPRs against third parties and defences against legal claims by third parties. It is important to identify the authorised party and/or the mechanism to duly protect the jointly created IPRs.
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Termination of the relationship and assignment or separation of the joint IPRs in case of termination.
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Confidentiality provisions.
IP Audit
8. What are the main steps in conducting an IP audit in your jurisdiction to determine the content of an IP portfolio?
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Listing all the IPRs of a business (see Question 9).
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Verifying the status of IPRs, including examining pending or potential conflicts, licences, and other agreements.
IP Aspects of M&A
IP Due Diligence
Share Sale or Merger
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Quality.
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Scope.
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Registration.
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Use.
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Protection status.
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Strengths and weaknesses.
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Potential risks.
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Potential opportunities.
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Listing and classifying all the undertaking's IPRs (patents, trade marks, copyrights, design rights, domain names, know-how, trade secrets, and so on).
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Verifying the status and owners of the IPRs, including any pending or potential disputes, licences, and other agreements.
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Identifying any current or potential infringements to minimise risk or mitigate loss.
Asset Sale
Warranties/Indemnities
Share Sale or Merger
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A list of all the IPRs together with their complete history has been provided.
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Ownership of all the IPRs is full and valid, and the seller has full power to assign the IPRs without additional authorisations from third parties.
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The IPRs do not infringe those of third parties.
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Information on any pending and/or potential disputes about the IPRs has been provided, including pending or potential attachments on registered IPRs.
Asset Sale
Transfer of IPRs
Share Sale or Merger
Asset Sale
Lending and Security Interests
12. Can security be taken over IPRs?
13. What are the main security interests taken over IPRs and how are they created and perfected?
Patents, Utility Models, Trade Marks, and Design Rights
Copyright and Trade Secrets and Confidential Information
Settlement Agreements
14. What are the main considerations when entering an IP litigation settlement agreement?
Employees and Consultant Agreements
Employees
Ownership
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Service inventions. These are inventions made by the employee during the term of their employment while performing a task assigned to the employee, or which are based largely on the employer's experience and activities.
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Free inventions. These are inventions that are not service inventions.
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In execution of their duties.
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Using the information and equipment available at work.
Compensation
Patents and utility models. If the employer claims total or partial ownership, the employee is entitled to claim reasonable compensation from the employer in both cases.
Designs. The employee receives compensation corresponding to the importance of the invention to the employer and/or the market.
Copyright. The Copyright Law does not set a compensation amount to be paid to the employee if its economic rights and/or rights to exercise the moral rights are assigned to the employer. In practice, the parties cover this in the assignment agreement.
Main Steps
See above, Ownership.
Consultants
Ownership
Main Steps
If the external consultant works under the strict supervision and instruction of the commissioning business, the main steps a business can take to ensure it owns each of the main IPRs are the same as for an employee (see Question 15).
For copyright, if the external consultant acts independently, it is highly advisable for the employer to enter into separate agreements to assign the relevant IPRs, specifying each assigned/licensed right individually. In particular, if the relevant work is intended to be used in a different way to that agreed in the on-demand work agreement, a written assignment must comply with the Copyright Law by specifying the format and media of the relevant use (see Question 1 and Question 2).
For other IPRs, if the external consultant acts independently, it is highly advisable for the employer to enter into separate agreements to assign the relevant IPRs.
Key Issues in IP Transactions
Competition Law
17. What are the most common national competition law issues that arise in the exploitation of the main IPRs?
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If an entity that already has a dominant position in a market is assigned trade marks (or other IPRs) from its closest competitor, this may strengthen its dominant position and may not be allowed by the Competition Board.
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If an entity in a dominant position in a market refuses to license its IPRs (particularly patents or utility models), this may be an abuse of a dominant position if the entity does not have reasonable grounds for the refusal or imposes unreasonable conditions.
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Applying anti-competitive conditions to an IPR licence, for example, resale price maintenance, market sharing, and so on, may be an anti-competitive agreement prohibited by the Competition Law.
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The prohibition of agreements, concerted practices, and decisions that actually (or potentially) prevent, distort, or restrict competition. These include:
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price fixing;
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market sharing; and
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deterrence of entry, resale price maintenance, and discriminatory behaviour.
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The prohibition of an abuse of a dominant position. This includes:
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imposing unfair prices or conditions;
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discriminatory behaviour;
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tying and bundling;
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applying high sales price; and
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preventing market entrance of undertakings.
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Ensure new development and improvement or economic or technical development in the production or distribution of goods or the provision of services.
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Benefit the consumer through the above development or improvement.
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Do not eliminate competition in a significant part of the relevant market or limit competition any more than necessary to achieve the above benefits.
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Vertical agreements on sales, purchases, and resales of goods and services, including provisions relating to IPR transfers and use (Communiqué 2002/2).
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Research and development agreements (Communiqué 2003/2).
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Vertical agreements and concerted practices in the motor vehicle sector (Communiqué 2005/4)
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Technology transfer agreements (Communiqué 2008/2).
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Agreements among parties in the insurance sector (Communiqué 2008/3).
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Specialisation agreements including provisions relating to IPR transfers and licensing (Communiqué 2013/3).
Tax
19. What are the main taxes payable by a licensor on the licensing of the main IPRs?
Stamp Duty
Income Tax
Value Added Tax (VAT)
20. What are the main taxes payable by a seller on the sale or transfer of the main IPRs?
Stamp Duty
Income Tax
For a non-resident individual, if the IPRs are sold to public enterprises, other public entities, foundations, economic enterprises of associations and foundations, and so on (as listed under Article 94 of the Income Tax Law), the taxpayer does not pay tax on the sale.
VAT
Non-Tariff Trade Barriers
21. Are there any non-tariff trade barriers affecting IP development and licensing transactions?
Depending on the nature of the technology and/or the IP developments involved, regulatory consents may be required. Such permits can be considered a non-tariff trade barrier. It is highly advisable to consult the local regulations on the relevant technology area before engaging in such transactions/commercial relationships.
For example, public procurement practices may be considered as a non-tariff trade barrier. The public procurement terms usually require the public authority to fully own the IP which creates obstacles for foreign companies.
In addition, in the pharmaceutical industry, pricing regulations create a significant burden on innovative pharmaceutical companies, which creates obstacles for such companies to invest in their IP in Turkey.
First published by Practical Law in 08.11.2022.