Yayınlar

General Assembly of Court of Appeal fortifies its stance against badfaith

• The case involved a trademark application, filed by a local company, which was confusingly similar to a well-knowntrademark in the same sector
• The General Assembly found that the defendant had failed to present a legitimate defence explaining why it had chosen asign similar to the well-known mark
• It was evident that the defendant had filed the application in bad faith, as it could not be a mere coincidence

In a recent case, the General Assembly of Civil Chambers of the Turkish Court of Appeal has made a significant ruling regardingthe acceptance of bad-faith claims in trademark disputes: if a defendant fails to present a legitimate defence, the filing of anapplication similar to a well-known trademark is, on its own, sufficient to consider that the application was filed in bad faith.

Background

A local company engaged in the optic sector filed a trademark application that was confusingly similar to the trademark of awell-known manufacturer in the same sector. The earlier rights holder opposed the application, citing:

• the confusing similarity of the trademarks;
• the well-known status of its trademarks in the industry; and
• the bad faith of the applicant.

The Trademark and Patent Office (TPO) partially accepted the opposition based on the confusing similarity of the trademarks.The earlier rights holder then filed a cancellation action seeking the total refusal of the contested application, arguing that theapplicant had filed the application in bad faith and that registration of the mark would be detrimental to the well-known status of the earlier trademarks.

The First Instance Court recognised the legitimacy of the plaintiff's claims. It cancelled the TPO's partially favourable decisionand ordered the total refusal of the application, acknowledging the well-known status of the earlier trademarks and the badfaith of the applicant. The Regional Court of Appeal aligned its decision with the ruling of the First Instance Court.

However, the TPO, being a co-defendant of the applicant, appealed the decision before the Court of Appeal. The appeal wasaccepted on the grounds that the First Instance Court had accepted the well-known status of the plaintiff's trademark without aproper evaluation, and that the bad faith of the defendant had not been proven with definitive evidence. Consequently, the casewas sent back to the First Instance Court for a retrial.

The First Instance Court persisted in its initial favourable decision and once again ruled for the total cancellation of the TPO'sdecision in this case. The TPO then re-appealed, resulting in the file being sent to the General Assembly of the Court of Appealsfor a final examination.

Decision

The General Assembly agreed with the reasoning of the First Instance Court and upheld its ruling in favour of the earliertrademark holder, providing a detailed reasoning on the acceptance of bad-faith claims:

• The plaintiff had successfully proven the well-known status of its trademark on the Turkish market based on sufficientevidence. Therefore, the registration of the defendant's confusingly similar trademark would harm the distinctive character ofthe plaintiff's well-known trademark and allow the defendant to unfairly benefit from its reputation. Consequently, the FirstInstance Court's decision to accept the well-known status of the plaintiff's trademark and reject the application in its entiretywas correct.
• The defendant operated in the same sector as the plaintiff. The defendant had failed to present a legitimate defence explainingwhy it had chosen a sign similar to the plaintiff's well-known trademark. Thus, it was evident that the defendant had filed theapplication in bad faith, as it could not be merely a coincidence.

Comment

This decision provides significant guidance for future cases since the rulings of the General Assembly of Civil Chambers of theCourts of Appeal have a unifying effect on conflicting decisions made in similar cases. Previously, the Court of Appeal did notconsider that filing an application that was similar to a well-known trademark was sufficient ground to accept a bad-faith claim.However, here the General Assembly concluded that, without further evidence, the fact that the holder of the earlier trademarkoperates in the same sector is sufficient to establish bad faith if the defendant fails to provide a proper explanation for choosinga sign similar to a well-known trademark. There is a crossover with the Court of Appeal's opinion, which required clear andprecise indications to accept bad faith.

The perseverance of the First Instance Court in maintaining its initial decision is noteworthy, as it is uncommon for IP courts tooppose the rulings of the Court of Appeal. The decisions of the General Assembly ultimately carry authority and havesubstantial influence as precedents for the lower courts.