A bill was recently submitted to the Grand National Assembly of Turkey on November 13, 2018 (Bill number: E.2/1286). While the title of this bill has no relevance to IP law, some of the proposed regulations are directly related to IP rights and some IP litigation.
The preamble of the Article states that it is a legal obligation to apply to mediation before filing a lawsuit for receivables and damages regulated in Article 4 of the Turkish Commercial Code No. 6102. Article 4 paragraph 'd' of the Turkish Commercial Code No. 6102 states that civil lawsuits arising from intellectual property legislation shall be deemed commercial lawsuits. Therefore, if this bill is adopted, mediation will be a condition for litigation for receivables and compensation claims related to intellectual property rights.
The institution of mediation as a condition for litigation was first introduced to our legal practice in Turkey in January 2018 under Law No. 7036 on Labor Courts. Officially, it is claimed that these developments have had a positive impact on the legal system and that the number of labor lawsuits has significantly decreased after these modifications.
This hypothesis is open to discussion and needs to be thoroughly discussed and evaluated with strong, supportive, and objective statistical data with the participation of all relevant parties. Moreover, the pros and cons of mediation should also be evaluated in this context. Provided that the parties' will in this regard is in good faith and constructive, it is considered that mediation will have a very limited contribution only in terms of claims for receivables.
The main characteristic of intellectual and industrial property rights is that the proprietor has certain exclusive rights in case of infringement by third parties. In other words, the intellectual and industrial property rights holder has the sole authority to take legal actions against the infringing parties.
In infringement actions, the infringement itself is notified before the action is brought to shift liability to the infringing party. Sending a warning letter or filing a declaratory action is the most common way to achieve this goal. In most cases, the infringer knows that the intellectual property rights in question are illegally being used and is aware of the consequences. In other words, infringement actions are brought against third parties acting in bad faith. It is a well-known fact that in most attempts to mediate IP infringement, the infringing party refuses to even compensate IP right holders for the official payments made to date.
At this point, making mediation a condition of litigation, especially in infringement cases involving claims for damages, would, in most cases, constitute an advantage for the person acting in bad faith. In this respect, it would not be unfair to argue that the proposal would cause a prolongation of the process, which is a regression from the status quo, not an improvement
Intellectual property is an interdisciplinary field where specialization is a prerequisite. In addition to legal knowledge, it is necessary to follow and understand the institutions, precedents, national and international developments, and improvements regarding each IP asset.
Yet, according to Article 20/2-b of Law No. 6325 on Mediation in Civil Disputes, the mediator must be a graduate of a law faculty.
The Intellectual Property Courts generally appoint a panel of experts to report on each case where the subject matter of the dispute requires expertise. In addition, lawyers and, where the matter requires expertise, an expert from the relevant sector is assigned to resolve intellectual property disputes and reach a fair outcome.
Currently, most of the esteemed colleagues appointed as mediators cannot claim to obtain this level of expertise in Intellectual Property.
Simply to give an example, let us assume that the owner of an invention, the subject matter of which falls within the scope of the Industrial Property Law No. 6769 and which can be patented, has a claim for a receivable from the person who will use the patent related to this invention and the parties cannot agree. To what extent is it possible for a mediator, who does not have sufficient technical knowledge and infrastructure on this subject and who is essentially a lawyer, to reach a conclusion within the scope of the claims and defenses of the parties and/or to conduct this process in the sense sought by the law and to reconcile the parties? Similarly, in the case of claims for damages for infringement between a third party who follows due process and continues its tortious use, will it be possible for the mediator to determine whether the amount of compensation claimed would be equitable and find a settlement in this sense before filing an infringement lawsuit?
Therefore, in our opinion, what should be done is to exclude all cases related to intellectual and industrial property rights from the scope of mandatory mediation. If the draft law is adopted in its current form, it will become a process that only needs to be followed, which will serve no purpose other than time and expense. Let us wait and see what the outcome will be...
KIRCI Law Office
Attorney at Law
Trademark & Patent Attorney