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Design Infringement And Related Courtd Actions In The Light Of The Supreme Courts Current Decision

Design Infringement And Related Courtd Actions In The Light Of The Supreme Courts Current Decision

ABSTRACT

Article 55 of the Turkish Industrial Property Code numbered 6769 (“Code”) states the legal definition of design with the provision that ” Design shall be the appearance of the whole or a part of a product resulting from the features of, the line, contour, colour, shape, material or texture of the product itself or its ornamentation”. Provided that the design is new and distinctive, it can benefit from the protection arising from the Code. Moreover, when designs are registered in Turkey before the Turkish Patent and Trademark Office (“Turkish PTO”), they are protected as “registered design”, otherwise they are protected as “unregistered design” on the condition that they are presented to the public for the first time in Turkey. The design, as an industrial property right, can be subject to tortious acts of third parties, which is considered design infringement within the Code’s scope. These acts become subject to various rules and sanctions. In this article, after touching on general information about the design infringement, the decision of the 11th Civil Chamber of the Supreme Court, dated 30.05.2022 and numbered 2020/1455 E. 2022/4194 K, will be examined. In this case having the claims for determination, termination, and prevention of infringing actions together with compensation, the Supreme Court made extremely important determinations by separating the claims as compensation and others. 

I. Design Infringement and Potential Civil Claims

Design infringement means the interference with the industrial right related to one of the acts determined in the legislation, without the consent of the actual design owner, and it has the characteristic of tortious act by actual nature. As it is known, the Turkish Decree Law No. 554 on the Protection of Industrial Designs, which is the first special regulation regarding designs, entered into force in 1995, and then, the Code entered into force and abolished the Decree Law No. 554, except for some provisions that will continue to be partially implemented temporarily. Therefore, it will be necessary to make an evaluation within the framework of the current Code for the design rights and the infringing acts against them in its current form. 

The infringement of the design right is stated in article 81 of the Code with the principle of numerus clauses; The following acts shall be deemed as infringement of a design right: 

  • to produce, put on the market, sell, offer for contracting, import, use for commercial purposes or stock for those purposes an identical or similar product in which the design is incorporated or to which it is applied without the consent of the right holder;
  •  to broaden the rights granted by the design owner through licensing or to transfer these rights to third parties without consent; 
  • to disseize the right of a design.

In order to file a lawsuit for infringement of the design right, it can be said that as a rule, the design must be registered and subsequently published (for unregistered designs, after it is presented to the public in accordance with the Article 57 of the Code). On the other hand, pursuant to the relevant legislation, if the right owner has informed the infringing third party of the design application and its scope, there is no need to wait for the publication of the design. Therefore, unauthorized use of a design at the application stage might also mean violation of rights and may be subject to an infringement lawsuit. Besides, in case of the relevant acts of the infringer are the result of his/her bad faith, it will not matter whether publication of the design is made or not. 

In case of infringement of the design right, the right owner may file a lawsuit with the claims for the determination, prevention, suspension, removal of the infringement as well as material, moral and reputation compensation before the specialized IP courts (in case there is no specialized court before the general civil courts of first instance). In addition, seizure of infringing products and tools such as devices and machinery used exclusively in their production; establishing a property right on these vehicles in favor of the plaintiff; destruction of vehicles, if conditions exist; the announcement of the finalized decision by the court or its notification to the relevant parties may be claimed in the same case. 

In the event that financial compensation is claimed within the infringement action, the damage of the plaintiff will be compensated by the defendant, as a general rule. The plaintiff’s loss includes his actual loss and deprived earnings. According to the plaintiff’s request for choice, in the calculation of the deprived earnings: a) the possible income that the plaintiff could have obtained if there was no competition of the defendant, b) the net income of the defendant, c) the cost that the defendant would have paid if he had used the industrial right in accordance with the law with a license agreement will be taken into account. 

In addition to the above, claims for non-pecuniary damage can be claimed within the framework of general provisions for the pain and suffering caused by the infringement and the loss of confidence in commercial life. However, the damage to reputation means “damage to the reputation of design” and manifests itself in the form of bad production or putting products on the market in an inappropriate way. 

II. About the Supreme Court’s Decision

Regarding design infringement cases and related compensation claims, it is seen that the 11th Civil Chamber of the Supreme Court made an important determination in cases where design infringement and compensation claims are available together through its decision dated 30.05.2022 and numbered 2020/1455 E. 2022/4194 K. 

In the related case, the plaintiff claimed determination, termination, and prevention of the infringement against the registered design together with material/moral compensation based on the related infringement. Although all of the related claims were found justified by the first instance IP court, at the end of the appeal examination of the 11th Civil Chamber of the Supreme Court, the related decision was reversed for the benefit of the defendant in some aspects.

In the decision, the first instance court’s determinations for recognizing the infringement were found legitimate by the Supreme Court, while the determinations for compensation claims were deemed as unacceptable with several reasons. The Supreme Court ruled that the following issues should be investigated and taken into consideration in order to reach a positive result for the compensation claims, and absence of such an examination/investigation for the given points led the Court to reverse the decision in favor of the defendant: 

  • Similarity of registered designs to each other, 
  • Relations and closeness between the parties, 
  • Whether the product subject to the design is wellknown and whether its sale in the market is widespread. 
  • Whether the defendant was aware of or was able to know the previous design of the plaintiff. 

When we look at such decision in detail, it is understood that two factors should be emphasized at this point. The first one is that the claims for determination, termination, and prevention of infringement on the plaintiff’s design and the claims for compensation should be evaluated separately. The other factor is that for acceptance of the compensation claims, it is required for the defendant to know or to be in position to know the infringement. 

In the decision, the Supreme Court also referred to Article 45 of TRIPS ordering “The judicial authorities shall have the authority to order the infringer to pay the right holder damages adequate to compensate for the injury the right holder has suffered because of an infringement of that person’s intellectual property right by an infringer who knowingly, or with reasonable grounds to know, engaged in infringing activity.” to justify its decision for necessity of the defendant to know (or ought to know) of the “infringement and its consequences”. 

Through the related decision, the Supreme Court clearly concludes that infringement claims should be kept separate from the compensation claims, and it should not be accepted that availability of design infringement automatically causes compensation order. 

III. Conclusıon and Remarks

As a result, as determined in the settled case-law of the Supreme Court, in cases where the design infringement and compensation claims are examined together, the compensation claims are evaluated separately from infringement claims and are accepted only if the defendant knows or needs to know the infringement. At this point, informing the infringer of the infringement by issuing a warning (it will be beneficial to be through a notary public for ease of proof) or by other notification methods should be found sufficient by the courts to meet the related condition. In the event that this vital element is missing, even if the available evidence are sufficient to decide infringement in favor of the plaintiff, no compensation order will be issued by the Court

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