Turkish Supreme Court said the final word on non-use cancellation actions

Turkish Supreme Court (TCC) has recently clarified a long-disputed issue on non-use of trade marks.

Background

A Specialized Court of Intellectual and Industrial Property (IP Court) filed a request for the cancellation of Article 14 of the Decree Law no. 556, which includes provisions regarding use of trade marks and their cancellation in case that they are not used within five years from their registration. Meanwhile, the draft law for industrial property was enacted on December 22, 2016 by the Turkish Parliament. The new Industrial Property Law (IPL) was published and came into force on 10 January 2017.

Just before the entry into force of the IPL, the TCC’s decision cancelling Article 14 of the Decree Law No. 556 on January 06, 2017 was published and took effect. The decision of the TCC were established on the grounds that trade mark rights cannot be annulled on the basis of the provisions of Decree Law on the grounds that those rights are proprietary rights and so the fundamental rights in the constitutional meaning which are not allowed to be annulled under the Decree Laws.

As the IPL, which includes use provisions likewise, come into force after the cancellation of Article 14, many non-use pending cancellation actions filed under the Old  Decree Law were dismissed by the IP Courts due to 4-day legal gap before the effective date of the IPL and on the grounds that there are no longer provisions which allow trade marks, which are not genuinely used within the 5-years as from their registration, to be cancelled by non-use cancellation actions at the Courts.

This has not remained limited to only pending non-use cancellation actions but also raised the question about when the non-use cancellation actions can be filed under the IPL. As the IPL came into effect on January 10, 2017 and the laws are not usually made retroactively (as in this case), some academics and IP professionals have argued that non-use cancellation actions can only be filed after January 10, 2022 for the trade marks registered under both the old Decree Law and the IPL  with the following considerations:

• There is no non-use provision before the coming into force of the IPL (as a result of the cancellation of the provision related to the use of trade marks under the Old Decree Law by the TCC)
• the effective date of the IPL is January 10, 2017 and the 5-years use period, as prescribed by the IP Law, can be started as from this date of entry into force.

At the end of all these debates, the Turkish Supreme Court (TSC) has put end to the chaotic situation with its recent decision.

Decision of the Turkish Supreme Court

The TSC has firstly investigated whether the related provisions of the IPL can be applied retroactively and opined that the Laws are not made retroactively as a rule and bear legal consequences prospectively. Whereas it is the general principle, according to the TSC, there is no obstacle for the lawmaker (Turkish Parliament) to make legislations retroactively. The TSC further considered the following facts:

• The provisions of the IPL were enacted on December 22, 2016 by the Turkish Parliament and come into force on January 10, 2017.
• The cancellation decision of the TCC regarding the non-use provisions under the Old Decree Law  came into force on January 06, 2017.

In view of these, the TSC further considered and concluded that:

• It should be accepted that the will of the lawmaker emerged on 22 December 2016 (before the effective date of the decision of the TCC).
• While the main intention of the lawmaker is to implement the non-use provisions retroactively, a legal gap unpredictably emerged due to the TCC’s cancellation decision coming into effect after the enactment date but before the date of entry into force of the IP Law.

The TSC confirmed that non-use cancellation actions can be filed even before January 10, 2022 with regards to trade marks which are not used within 5-years use period.

The TSC has consequently clarified an issue which have been largely debated over 2 years in Turkey. In light of this cas law, anyone can any longer file non-use cancellation actions against trade marks based on non-use claim.

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Use or non-use matter for patents in Turkey

The period for using or working a patented invention is typically three years as from the publication of the patent grant in the Turkish Patent Bulletin or four years as from the application date of the patent, whichever is the later. This period is especially important in respect of the compulsory requests, as it is not possible for third parties to request compulsory license before the expiration of this statuary period.

The due date for use is actually relative since the actual due date for use is calculated considering the date of request for a compulsory license. In other words, the use can be performed any time during the lifetime of the patent but should be performed before the request for compulsory licence for avoiding any risk of compulsory license if three years period have already passed. For instance, if the use has been performed at a time after 3 years as from the publication of the patent grant in the Turkish Patent Bulletin but before the date when the request for compulsory license is filed, the use requirement has been deemed to performed.

In the case of European patents validated in Turkey, the initial 3-years period for the use requirement is calculated based on the publication date of the European patent in the Turkish Patent Bulletin (not the publication date in the European Patent Bulletin). After that period, any third party will be allowed to request compulsory license based on possible non-use.

Whereas the actual use is as defined above, non-use or use declarations, as prescribed by the Implement Regulation (Rule 117 (7)) but not the Law, should be filed within three years as from publication of the decision to grant patent in the Turkish Patent Bulletin or four years as from patent application date, whichever is the later. The use and non-use declarations filed for the patents are published in the Turkish Official Patent Bulletin. The patents in respect of which no use is declared are also published in the Turkish Official Patent Bulletin.

The Implementing Regulation, in general terms, specifies that the market conditions and circumstances beyond the control and will of the patentee is considered in assessing the use. Technical or economic or legal reasons of an objective nature, such as marketing authorization, compliance with standards, need for new applications to be made in different fields are to be deemed to constitute legitimate excuses for the inability to put the patent to use. These reasons in the nature of constituting obstacles for using the patented invention are accepted as reasons beyond the control and will of the patentee.

The Regulation does not prescribe any positive or negative effect on patent rights if use or non-use declaration is not filed within the prescribed due dates. This point is not sufficiently clear but it can be said that the main purpose for requiring to file non-use or use declarations is:

• to keep the third parties informed of the fact whether the patent is being used or not, on what grounds the use has been or has not been performed, or the legitimate reasons for non-use as generally defined in the Regulation, and
• to encourage the patent holders to use their inventions or to grant licenses if they do not use their patented inventions directly in Turkey.

As for the nature of the declarations, a standard form (P-34) in the nature of declaration is provided by the Turkish Patent and Trademark Office. The form, to be signed by patent attorney on behalf of the patentee, contains the following statements, one of which is selected:

• Pursuant to the seventh and eighth paragraphs of Article 117 of the Regulation on the Implementation of Turkish Industrial Property Code (Law No. 6769), it is hereby declared that the invention subject to the application/patent/utility model is used.

• Pursuant to the seventh and eighth paragraphs of Article 117 of the Regulation on the Implementation of Turkish Industrial Property Code (Law No. 6769), it is hereby declared that the invention subject to the application/patent/utility model is not used.

Although the form provides standard statements, an additional declaration can be submitted along with the form for reasoning non-use or clarifying use. Furthermore, evidences of use in the case of use, and any documents reasoning the non-use in the case of non-use can be attached to the declaration.

The declaration of non-use can cover a legitimate reason as identified above (e.g. procedures of marketing authorization ongoing). On the other hand, the declaration of use can cover a statement how the patented invention is being used in Turkey, e.g. by being imported to Turkey, or being produced in company or facility X located in Turkey etc., which may be useful to discourage third parties who would attempt to request compulsory license.

Alternatively, it is possible to file offer for license to prevent third parties from requesting the compulsory license if the subject invention is not used or will not be put into use by the patent owner. Offer for license can be always withdrawn.

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Turkish IP System has become more modern by new amendments

The Implementing Regulation on Industrial Property Code (Reg. No. 30825) has been amended for simplifying the procedures and formalities regarding the rights-cancelling or rights-restricting actions before the Turkish Patent and Trademark Office.

The new amendments came into force after their publication in the Turkish Official Gazette on July 08, 2019 together with a series of amendments which are made in other laws and regulations for reducing the red-tape in the government affairs and simplifying the citizens' business with the government.

After the amendment of the Regulation, the applicants will not be any longer required to submit notarized signature declaration (where the applicant is a natural person) or list of signatures (where the applicant is a legal entity) regarding their actions cancelling, restricting or withdrawing actions regarding their applications, registration or oppositions. Specifically, the notarized signature declaration or notarized list of signatures will not be required for the following actions anymore:

• Partially renewing a trademark (Reg. Rule 19(ç) (d)).
• Withdrawing a trademark application (Reg. Rule 22(ç) (d)).
• Cancelling trademark rights (Reg. Rule 22(ç) (d)).
• Withdrawing an opposition (Reg. Rule 22(c) (ç)).
• Cancelling rights for geographical indications (Reg. Rule 46(c)).
• Withdrawing an opposition regarding an design application (Reg. Rule 66(c) (ç)).
• Partially renewing a design registration (Reg. Rule 67(c) (ç)).
• Withdrawing a design application or cancelling a design registration (Reg. Rule 110(2)).
• Withdrawing a patent application or cancelling patent rights.

In the first version of the Regulation which was put into force on 24 April 2017 after the introduction of the Industrial Property Code on 10 January 2017, many formalities requiring notarization had been already removed.The recent amendments have further modernized the IP system and made it more applicant-friendly.

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TURKPATENT has made substantive discounts on search and examination reports

Turkish Patent and Trademark Office (TURKPATENT) has significantly discounted the official fees for search and examination reports in order to reduce patent and utility model registration costs.

The discounted fees will be limited to a certain number of requests for search and examination as follows:

- 10 requests for real persons,

- 25 requests for legal entities,

- 100 requests for universities.

The discounted fee will be 100 Turkish Lira (20 USD).

Thus, for example, if the applicant is a real person, he/she will be able to benefit from discounted fees up to 20 requests, including 10 for the search reports for patent or utility model applications and 10 for the substantive examination reports for patent or utility model applications.

When the number of requests determined according to the type of applicant is exceeded, the normal fees (if the request is filed through the e-government system) will be applied (590 TL (112 USD) for the search report and 355 TL (67 USD) for the examination report).

In the new schedule of official fees set by TURKPATENT for 2019, it has been noted that the official fees for the European patent validations and PCT national phase entries in Turkey have been substantively increased.

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Novartis loses a Glivec patent case in Turkey

The Turkish Constitutional Court has ruled that there has been no violation of the property rights due to the invalidation of one of "Glivec®" patents of Novartis in Turkey.

The Swiss pharmaceutical giant Novartis filed an international patent application (International patent application no. PCT/EP2003/004151) designating, among others, the European Patent Office (EPO) on 22 April 2003, the active agent of which is "imatinib mesylate", for use in the treatment of chronic mycloid leukaemia and gastrointestinal stromal tumours. The patent case is related to one of the patents for the drug trademarked "Glivec®" (as known in Europe) and "Gleevec®" (as known in the USA).

Novartis proceeded to the regional phase at the EPO and the EPO granted the patent (European patent no. EP 1 501 485 B1) for that and mentioned the grant in 2007 in the European Patent Bulletin. After the EPO’s grant, Novartis duly validated the European patent in Turkey, one of the contracting states of the European Patent Convention (Turkish Patent No. 2007 06715).

The invalidation of the patent requested

A competitor company has taken invalidation action against Novartis’ patent before the Turkish IP Court, i.e. Istanbul Intellectual and Industrial Property Rights Court, in 2008. The competitor argued that the subject matter of the patent was already known in the art and disclosed by the patents granted in 1992 and 1998. Therefore, it claimed that the use of the substance of the patent is not novel for use in the treatment of leukaemia and the preparation of the tablet according to the dosage for use should not be considered as “invention”.

The court in charge received an expert report issued by a panel of experts consisting of two pharmaceutical professors and a chemical engineer. The report argued that the methods described in the patent did not exceed the state of the art, and were lack of novelty and inventive step. Novartis raised objection against the report and the Court received a supplementary expert report from the same panel of experts. The supplementary report has confirmed the main report. On 24 January 2013, the Court accepted the case based on the expert report and invalidated the patent due to the lack of novelty and inventive step.

Novartis filed appeal against the first instance decision before the 11th Chamber of the Supreme Court of Appeals but the Supreme Court approved the decision of the first instance court in 2014.

Individual application

Novartis filed an individual application at the Constitutional Court in 2015 claiming that the right to property was violated by the invalidation.

It also filed a complaint alleging that the right to a fair trial was violated because of the refusal of compensation action that it has filed against the experts on the grounds that they had issued a false report.

Opinion of the Ministry of Justice

The Constitutional Court asked an opinion from the Ministry of Justice. In the opinion regarding the individual application that the Ministry of Justice sent to the Constitutional Court, it was said that the decision of invalidity had been aimed at the public interest.

Novartis stated that the Ministry had overlooked the fact of issuance of a false report by the experts, and the Judges who gave the decision have been arrested for other crimes out of the case.

No violation of property rights

The Constitutional Court concluded that the property rights had not been violated. The allegation of violation of the right to a fair trial was not accepted due to the lapse of time.

The Constitutional Court has stated that patent protection is not provided for every invention as they can be only patented provided that they are novel and have inventive step and industrial applicability pursuant to Industrial Property Law No. 6769.

The Constitutional Court has also said that the public authorities had no direct interference with the property rights of Novartis in a dispute between the private entities. The Court has also opinioned that in the disputes between the private entities, the legislator and the courts of instance have the power to judge on which parties would come superior and this should be made by balancing the interests of the parties as much as possible.

In the reasoned decision, the following judgment took place:

"It is for sure that the patent invalidation has led to a burden in terms of the applicant company, but it has been prescribed that the inventions in the field of technology may be patented provided that they are novel and involve an inventive step and industrial applicability. Keeping the inventions, which are determined to be incompatible with these conditions, out of the scope of the patent protection is important in terms of protecting the rights and interests of the third parties, as in the present case. Particularly, it should be noted that the public authorities have wide power of assessment in determining the scope of the patent rights. Considering the facts that the public authorities have a certain discretion over which inventions need to be taken under the scope of patent protection and the determination of this scope significantly affects the rights and interests of the third parties, it was concluded that the positive obligations of the state have been fulfilled in relation to property rights in respect of the case where the patent rights were invalidated on the grounds that the conditions prescribed under the Patent Law have not been met."

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