Current Intelligence - The scope of protection of Lacoste's trade mark in Turkey

Turkish Court of Cassation refuses to extend scope of protection of Lacoste’s well-known trade marks


Uğur Aktekin, Güldeniz Doğan Alkan and Dilan Kayalıca

Abstract

The Turkish Court of Cassation, reversing its previous decisions on the matter, has rejected the action brought by Lacoste against registration of a ‘Crocodile’ trade mark for goods in classes 11, 20 and 21 of the Nice Agreement. The court has provided detailed criteria to assess the scope of protection of a well-known trade mark in relation to goods and services different from those for which the trade mark is registered.

Legal context and facts

The defendant, Özlider Plastik Ve Metal Sanayi Ticaret Anonim Şirketi (Özlider), filed a trade mark application for the word ‘Crocodile’ in classes 11, 20, 21 and 24 of the Nice Agreement before the second defendant, the Turkish Patent and Trademark Office (Office). Registration in class 24 was excluded ex officio by the Office due to absolute grounds for refusal not related to this case. Thus, the application was published in the Official Trademark Bulletin for classes 11, 20 and 21 only. The plaintiff, Lacoste, filed an opposition against the trade mark application. Both the opposition and a further appeal for re-examination filed by Lacoste were rejected.
Lacoste filed a court action, challenging the final decision of the Office which had rejected both their opposition against the trade mark application and the rejection request brought against the trade mark in question. Lacoste’s arguments were mainly based on likelihood of confusion, due to the similarity of the trade mark application for ‘Crocodile’ to Lacoste’s famous ‘crocodile device’ trade mark. Lacoste also argued that the registration of Özlider’s mark caused damage to the well-known status and reputation of Lacoste’s trade mark.
The 3rd Civil IP Court of Ankara dismissed the action filed by Lacoste. The court found that there was no likelihood of confusion between the trade marks in question as, despite the similarity between the trade marks (a word and a device which defines the same concept), the goods in classes 11, 20 and 21 within the scope of the contested trade mark application were not identical or similar to the goods covered by Lacoste’s trade mark registrations. It also dismissed arguments concerning the well-known status of Lacoste’s trade marks.
The decision was appealed by Lacoste before the 11th Civil Chamber of the Court of Cassation (CoC), competent to review matters concerning IP law at the appeal stage. The CoC examined the file and overturned the decision issued by the 3rd Civil IP Court of Ankara, finding that Lacoste’s trade marks were well-known trade marks and that the application for ‘Crocodile’—even if in different classes than Lacoste’s trade marks—could derive unfair benefit from or damage the distinctiveness or well-known status of Lacoste’s trade marks. The case was remanded to the court of first instance.
According to Turkish Civil Procedure Law, if a decision of a court of first instance is found inappropriate and reversed by the CoC, the highest civil court in the Turkish legal structure, the case is sent back to the same court of first instance and re-examined in light of the reversal decision. Upon re-examination, the court of first instance may decide to comply with the reversal decision, changing its initial decision, or insist on its initial judgment. In this case, the 3rd Civil IP Court of Ankara decided to insist on its initial decision, reiterating the rejection of Lacoste’s arguments.
The decision was again appealed and brought before the General Assembly of Civil Chambers (‘General Assembly’) of the CoC, which has the authority to resolve the conflict between the two decisions. The General Assembly reviewed the second decision of the 3rd Civil IP Court of Ankara and decided to reverse the decision, in parallel with the decision of the 11th Civil Chamber of the CoC.
Özlider applied for a review of the reversal decision given by General Assembly. As prescribed by civil procedure rules, the review was again examined by the General Assembly.

Analysis

The General Assembly decided to revoke its own decision, upholding the second decision of the 3rd Civil IP Court of Ankara.
The court found that there was a weak similarity between the parties’ trade marks, and that the goods covered by registration were neither identical nor similar. It added that even if a trade mark is well known, it is not possible to assume that a trade mark which seeks registration for different goods or services would automatically derive unfair benefit from the reputation of the well-known trade mark. A different conclusion, according to the court, would have conferred wider protection the well-known trade mark than legally due.
Özlider’s trade mark application concerned goods related to construction materials and kitchenware. The court noted that these goods were not similar or related to the clothing sector in which Lacoste’s trade mark is well-known. Therefore, Özlider’s trade mark application, if registered, would not derive unfair benefit from the well-known status of Lacoste’s trade mark and would not harm its reputation or distinctive character.
The well-known status of Lacoste’s crocodile device mark was beyond dispute. The main subject of the dispute was the scope of protection conferred to a well-known trademark under Article 8(4) of the Turkish Trademark Decree Law.
The decision of the General Assembly confirms the validity of the approach taken by the 3rd Civil IP Court of Ankara, which had ruled that the dissimilarity of the goods and services in question prevented an automatic finding of likelihood of confusion based solely on the well-known status of a trade mark.
Of significant relevance for this decision were the ‘DERBYTECH’ and ‘NIVA’ cases. In the former case (2013/11-656 E. 2014/427 K., decision of 2 April 2014), the court of first instance had concluded that the trade mark ‘DERBYTECH’ could not be registered for goods such as ‘saw, sanding machine, cutting machine, powered lawn-mover’ in class 07/01 and ‘machines and tools for agriculture, agriculture tools pulled by machine or engine, agriculture machines’ in class 07/07 because of the well-known status of the trademark ‘DERBY’ for ‘razor blades’ and the likelihood of association between the trade marks. On appeal, the CoC had found that the goods compared were not similar or related and therefore the conditions under Article 8(4) of the Turkish Trademark Decree Law (taking unfair advantage of, or being detrimental to, the distinctive character or reputation of the registered trade mark) had not been met.
In the latter case (2015/1633 E. 2015/8463 K., decision of 18 June 2015), the court of first instance had declared the trade mark ‘NIVA’ invalid even for goods not falling within the scope of the well-known ‘NIVEA’ trade marks. The CoC, however, had reversed this decision, highlighting the need for expert examination and a more detailed assessment of the scope of protection of well-known trade marks.

Practical significance

The decision of the General Assembly in this case, as well as the decisions discussed above, demonstrate that Turkish courts in practice do not automatically apply Article 8(4) as a ground for refusal based on well-known trade marks. Instead, they require a careful examination of the trade marks in question and a detailed assessment of the applicability of the three conditions set forth in Article 8(4). The Lacoste judgment, rendered by the highest civil court in Turkey, represents a clear and authoritative endorsement of this approach.
Although this is not the most favourable outcome for owners of well-known trade marks, the CoC’s position is in line with the wording of Article 8(4)1 of the Turkish Trademark Decree Law, as well as Article 8(5)2 of the EUTM Regulation, and it clarified the CoC’s approach to the scope of protection for well-known trade marks in relation to the registration of similar trade marks for dissimilar goods or services.






1 Article 8/4 of the Turkish Trademark Decree Law was ratified on 24 June 1995 and entered into force by publication in the Official Gazette numbered 22326 on 27 June 1995. This Decree Law was abolished by the publication of the Industrial Property Code no. 6769

2 Article 8/5 of the European Union Trade Mark Regulation No 207/2009 was published in the Official Journal of the European Union on 24 March 2009 and amended by the EU Regulation No 2015/2424 of the European Parliament and of the Council of 16 December 2015.

April editorial - counterfeiting and pharmaceutical products


Seeking effective remedies for the growing epidemic of counterfeit pharmaceutical products 

During the course of 2016 the European Observatory on Infringements of Intellectual Property Rights (‘Observatory’) released several studies on the economic costs of IP rights’ infringement. The task of the Observatory is indeed to improve the understanding of IP rights and the negative consequences of infringement upon such rights.
The studies on the economic costs of infringement were carried out in nine sectors which are considered intensive in the registration and use of IP, ie: cosmetics and personal care; clothing, footwear and accessories; sports goods; toys and games; jewellery and watches; handbags; recorded music; spirits and wine; and, last but not least, pharmaceuticals.
The sectorial report on pharmaceuticals was published on 29 September 2016. The full report can be found on the website of the Observatory (at https://euipo.europa.eu/tunnel-web/secure/webdav/guest/document_library/observatory/resources/research-and-studies/ip_infringement/study9/pharmaceutical_sector_en.pdf).
The aim of these types of report is to provide empirical data on the costs of IP infringement. It takes into account the direct costs (effects in terms of lost sales and loss of employment), as well as indirect costs, including reduced sales and job losses in other sectors (eg sectors that supply to the pharmaceutical sector) and impact on public finances due to the losses in tax revenues.
The report reveals that in 2013 the production within the EU of pharmaceuticals was worth EUR 284 billion at wholesale prices. Employment in the sector was good for 1.1 million people in the EU. The principal countries involved in the production and trade of pharmaceuticals in the EU appear to be Germany, Ireland, France, and Italy.
The report contains data on a EU-wide level, as well as per EU country. From an EU-wide perspective the estimated total direct effect in terms of sales lost due to counterfeiting is €10.2 billion. When legitimate manufacturers and traders are confronted with lesser sales, this will of course have an impact on employment. As to the indirect effect, the report adds a further estimated €7.1 billion loss of sales in other sectors. The report estimates the total loss of employment at no less than 90,900 jobs in the EU. Finally, it is estimated that the total loss for public finances amounts to €1.7 billion.
Taking the above into account, it is important to continue the fight against counterfeiting. This is particularly so in the pharmaceutical sector, where not only economic interests are at stake but also possible health issues for patients and consumers alike. In this respect the Convention on the counterfeiting of medical products and similar crimes involving threats to public health of the Council of Europe (also known as the Medicrime Convention) is a step forward. The Medicrime Convention dates back to 2011 and already at that point in time emphasized that the pharmaceutical sector increasingly faced the problem of counterfeiting, among other things, because of the relatively low risk of detection and prosecution of trade in counterfeit products on the one hand, and the potential of high financial gains on the other.
The Medicrime Convention has so far been ratified by a handful of EU Member States, ie Spain, Hungary, Belgium, and France. The principal countries involved in the production and trade of pharmaceuticals in the EU, as established in the Observatory report have unfortunately not yet ratified.
The Medicrime Convention can however be a helpful tool in combatting counterfeit trade in pharmaceutical products, in that it not only provides criminal sanctions, but also preventive measures and protection of victims in a uniform and harmonized fashion. Furthermore, it promotes both cooperation between different authorities of the same Member States as well as international cooperation. For instance, it contains a provision according to which Member States shall consult each other to determine the proper venue for prosecution in case several Member States have jurisdiction. It could then be agreed that one Member State will be the sole prosecutor, thus avoiding duplication of procedures and rendering the combat against counterfeiting more efficient. Another interesting provision is the possibility to take foreign judgments into account when dealing with recidivism.
As the Observatory study reveals that combatting counterfeiting in the pharmaceutical sector remains an important battle, not only for the pharmaceutical companies holding IP rights, but also for consumers, patients and the public sector alike, future ratifications of the Medicrime Convention would therefore be applauded.

Our latest issue - what's in it?

Here is the table of contents of our April issue. Editorial Board member Carina Gommers (Hoyng Rokh Monegier) penned a delightfully interesting editorial on effective remedies to tackle counterfeiting of pharmaceutical products, taking into account the recent EUIPO's study on "The economic cost of IPR infringement in the Pharmaceutical Industry" and the MEDICRIME Convention of the Council of Europe. We will post Carina's editorial after the weekend.

Our April issue also features a wide selection of Current Intelligence notes, including comments on trade mark rulings from Turkey and Canada. To whet your trade mark appetite, we also have a trio of CIs on recent EU rulings (including the General Court's judgments on the KitKat bar shape and the Guess logo) and a comprehensive EU trade mark round-up drafted by Arnaud Folliard-Monguiral and David Rogers, as well as an original and very interesting analysis of the protection of country names by Natalie GS Corthésy. Rob Kunstadt discusses patent jury trials in the US in light of the decision of the Court of Appeals for the Federal Circuit in MCM v HP (and of the recent decision of the Supreme Court to deny certiorari in this case). Rajam Neethu examines the issues surrounding biobanking and big genomic data, moving from the CoE's Recommendation CM/Rec (2016) 6 on research on biological materials of human origin and the recent World Medical Association's Declaration of Taipei on Ethical Considerations regarding Health Databases and Biobanks. Caterina Sganga provides an in depth critical analysis of the judgment of the CJEU in Soulier and Doke and evaluates its significance for EU copyright law. Our exchange with GRUR provides us with access to co-editor Eleonora Rosati's article on intermediary IP injunctions in the UK and EU context. Finally, our usual selection of book reviews looks at some of the latest publications in the field of IP.



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