New IP Code changes regarding patents, new post-grant opposition and enforcement provisions

Transcription

1 INTELLECTUAL PROPERTY - TURKEY New IP Code changes regarding patents, new post-grant opposition and enforcement provisions AUTHORS Mehmet Nazim Aydin Deriş January Contributed by Deris Avukatlik Ortakligi Introduction Changes to patents, utility models, designs, trademarks and geographical indications Structural changes concerning patent protection and enforcement Requirement of use Filing with office of declaration and evidence of use discontinued Compulsory licences Adoption of reinstatement Employee inventions Filing language Mandatory declaration for genetic resources Farmer exception Cancellation of independent claims State-of-the-art search report deadlines Amending or commenting on official communications Annuity fees Post-grant opposition (newly introduced) Enforcement burden of proof regarding process patents Patent infringement under new IP Code Legal remedies against patent infringement Compensation Indirect contributory infringement Doctrine of equivalents Preliminary injunction Comment Okan Can Introduction The Industrial Property Code 6769 (IP Code) entered into force on January It repealed and replaced the decree-laws on patents, utility models, trademarks and service marks, industrial designs and geographical indications. The new IP Code has made a wide-ranging impact at: the legislative level regarding the establishment, prosecution, maintenance and enforcement of IP rights; the administrative level regarding the administrative structure and function of the Patent and Trademark Office (previously known as the Turkish Patent Institute); the professional level with new rules regarding the organisation and activities of patent and trademark attorneys, especially from a disciplinary standpoint; and the judiciary level concerning the Patent and Trademark Office's judicial competences, such as the cancellation of trademark registrations on the ground of non-use. As regards IP rights, the IP Code replaces the following repealed decree-laws with an act of Parliament: Decree-Law 551 on Patents and Utility Models; Decree-Law 554 on Designs;

2 Decree-Law 556 on Trademarks; and Decree-Law 555 on Geographical Indications. It also aims to: further harmonise Turkey's IP legislation with: the EU Trademark Regulation (2015/2424/EU) and the EU Trademark Directive (2015/2436); the EU Community Designs Regulation (6/2002) and the EU Community Design Directive (98/71/EC); and the international conventions to which Turkey is a signatory; simplify and accelerate prosecution with a view to shorten the patent registration timeframe; make structural changes regarding the instruments and requirements of IP protection and invalidity; and improve enforcement effectiveness by addressing difficulties and shortcomings experienced or encountered during opposition and litigation proceedings. With regard to IP legislation, the new IP Code was prepared by using the repealed decree-laws as its starting point. Accordingly, the coherent and integrated body of IP legislation that Turkey has enjoyed since June through the repealed decree-laws is now found in the new IP Code, albeit with some amendments. These measures underline the aim to keep modernising and adapting Turkey's IP legislation and institutions. The new IP Code consists of: Introductory General Purpose Articles Articles 1, 2 and 3; Book One Trademarks Articles 4 to 32; Book Two Geographical Indication and Traditional Product Names Articles 33 to 54; Book Three Designs Articles 55 to 81; Book Four Patents and Utility Models Articles 82 to 145; and Book Five Common and Other Provisions. Section 1 of Book Five covers common provisions applicable to patents, designs, trademarks and geographical names in: Article 146 on terms and notifications; Article 147 on mutual representation; Article 148 on legal transactions; Article 149 on requests that may be put forward by the rights holder whose industrial property right has been infringed; Article 150 on indemnification; Article 151 on non-realised income; Article 152 on the exhaustion of rights; Article 153 on non-prosecutable persons; Article 154 on actions with regard to the non-existence of infringement and the conditions thereof; Article 155 on the effect of previous rights; Article 156 on the competent courts; Article 157 on the prescription of time limits; Article 158 on actions to be filed by licensees and the conditions thereof; Article 159 on requests for interim injunctions and the nature thereof; Article 160 on persons authorised to act and notify; Article 161 on fees, payment periods and the effects thereof; Article 162 on the execution of decisions; Article 163 on prompt destruction procedures; Article 164 on provisions to be applied to traditional product names; and

3 Article 165 on regulations. Articles 166 to 180 concern the internal organisation of the Patent and Trademark Office. These provisions introduce structural changes to the office's organisation by amending Law 5000/2003 on the establishment and duties of the Patent Institute (its former name), such as the establishment of the Intellectual Property Academy and Educational Centre of Industrial Property Rights (Article 168) and the Department of Geographical Indications. Articles 181 to 182 of Section Two, Book Five concern patent and trademark attorneys and introduce: a new professional code of conduct as specified under the ad hoc regulation; new penalties against breaches of professional code of conduct rules; and a new disciplinary board as an organ of the Patent and Trademark Office with the authority to penalise breaches of professional code of conduct rules. Articles 183 to 193 of Section Two, Book Five concern staff needs and the Patent and Trademark Office's structure. Changes to patents, utility models, designs, trademarks and geographical indications International exhaustion of rights Article 152/1 of the IP Code replaced the national exhaustion principle under repealed Decree-Laws 551, 554 and 556 with the international exhaustion of rights principle. Trademarks Under Article 152/2 of the new IP Code, trademark rights holders can stop the commercial use of products which have been altered or depreciated. New form and (electronic) means of notification Under Article 160/6 of the new IP Code, the Patent and Trademark Office no longer needs to follow the electronic notification rules as provided by Notification Law 7201/1959. Prompt destruction procedure Article 163 of the new IP Code is applicable to goods seized and placed under judicial custody in the context of the criminally punishable acts mentioned in Book One of the code with regard to trademarks. No criminal penalties for infringement of patents, utility models, design patents and geographical indications Repealed Decree-Laws 551 on Patents and Utility Models, 554 on Design Patents and 555 on Geographical Indications provided criminal penalties which were subsequently annulled by Constitutional Court decisions on the grounds that criminally punishable acts and criminal penalties cannot be provided by decree-laws, but only by acts of parliament. Criminal penalties only for trademark infringement Law 5833/2009 on criminal penalties regarding trademark infringement has not been repealed. Registered IP rights no longer valid defence against infringement claims Under Article 155/1 of the new IP Code, registered trademarks, patents and industrial design registration rights do not constitute a legitimate defence against an infringement claim put forward by the owner of the earlier IP right. This provision will evidently require an intensive clearance search even in the case of a registration before the use of any IP right. Case law under the repealed legislation accepted that trademark and industrial design rights registered with the Patent and Trademark Office constituted a legitimate defence against infringement claims, unless and until the registered right was cancelled and removed from the register. This case law caused preliminary and permanent injunction requests to be delayed or rejected until cancellation of the infringer's trademark or design right.

4 More favourable provision clause Article 4 of repealed Decree-Laws 551 on Patents and Utility Models, 554 on Design Patents and 556 on Trademarks has not been included in the IP Code. This provision has apparently been excluded to avoid duplication of Article 90 of the Constitution, which concerns the hierarchy of norms (ie, international conventions override national laws). Article 4 would have permitted the application of Articles 54/4 and 54/5 of the European Patent Convention when filing a patent application for second medical use. Due to the IP Code's silence on this issue, such a request would not be favourably received. Instead, the only alternative would be to challenge an administrative decision through the courts. Suspensive effect of appeal of first-instance or appellate court decisions Article 162 of the new IP Code states that "in court actions instituted against the decisions of the Higher Council of Examination and Evaluation (of the Patent and Trademark Office) as well as in invalidation actions, the decision of the court shall not be executable until it becomes finalized". In other words, for all such cases, the appeal will automatically have a suspensive effect on firstinstance or appellate court decisions until the case is finalised. This new provision introduces yet another regime under Article 367 of the Civil Procedural Law for cases involving invalidation and cases instituted against Patent and Trademark Office actions (eg, refusal decisions or actions regarding post-grant oppositions in patent and design patent matters). Structural changes concerning patent protection and enforcement Repealed Decree-Law 551 on Patents and Utility Models provided: a choice between three protection instruments; a short-term seven-year patent with a state-of-the-art search report; a full-term 20-year patent with a state-of-the-art search report and substitute exam; a 10-year utility model with an optional state-of-the-art search report; the possibility to branch out from three protection instruments; no post-grant opposition for patents and utility models; and the possibility for third parties to file opinions on the publication of the state-of-the-art search report. Abolition of short-term seven-year patent The new IP Code provides: a choice between two protection instruments; a full-term 20-year patent with a mandatory substantive examination; a 10-year utility model with a mandatory state-of-the-art search report; and a branching-out option. Introduction of post-grant opposition (for patents only) The new IP Code establishes an appeal board as part of the Patent and Trademark Office. Utility models The IP Code has also introduced changes concerning utility models. As regards the new requirement of mandatory state-of-the-art search report: the criteria of novelty and industrial applicability (Article 142/1) has been retained unchanged; no opposition for utility models has been included (Article 143/11); applicants can raise objections to the state-of-the-art search report with the possibility of bringing amendments; and third parties can file opinions on the publication of the state-of-the-art search report. As regards the explicit definition of matters excluded under utility models, the new IP Code grants no utility model certificate for:

5 chemical processes and products obtained by such processes or chemical products; pharmaceutical processes and products obtained by such processes; and biotechnological inventions and the processes and products obtained by such processes. Second medical use patents The new IP Code is silent concerning the patentability of second medical use inventions, despite a recent Supreme Court ruling that second medical use inventions are patentable. Turkey acknowledges the protection of second medical use patents validated through the European Patent Convention, to which it is a party. Supplementary protection certificates no protection afforded The IP Code harmonises Turkish legislation with the European Patent Convention and EU Directive 98/44/EC on the legal protection of biotechnological inventions. Articles 82/3/b, c, ç, d and 5 of the code, which concern patentable inventions and exceptions to patentability, cite non-patentable biotechnological inventions in order to mirror the provisions of: Article 53/b-c of the European Patent Convention concerning patentability exceptions; and European Patent Office (EPO) Guideline Rules 28(a), (b), (c) and (d) ("exceptions to patentability, EP shall not be granted in respect of biotechnological inventions") and Rule 29 ("the human body and its elements"). Accordingly, what is not expressly excluded therein remains patentable. The motivation of the new IP Code clearly establishes the biotech areas that qualify for patent protection, which reflects the biotechnological subject matter retained as patentable according to EPO Enlarged Board of Appeal decisions. As no definition of a 'biotechnological invention' is provided in the act, this issue will have to be shaped by case law. The IP Court recently ruled in the same decision that: a claimed method for detecting nucleic acids was patentable as long as the patentability requirements of novelty and inventive step are met; and gene sequences are non-patentable. The decision is pending before the Supreme Court. Requirement of use Article 130/2 of the new IP Code introduces an application date as an alternative date for using a patent. The statutory period for using a patent has been amended to: three years from publication of the decision to grant in: the Patent Bulletin for national patents or entries into the national phase of Patent Cooperation Treaty cases; and the European Patent Bulletin for the EU patents validated in Turkey according to the Patent and Trademark Office's practice, which is to be confirmed by a yet-to-be-issued regulation; four years from the application date, which is later than previously; or "discontinuing use without a justifiable reason for an uninterrupted period of 3 years". Further, the period for using a patent may be longer than the timeframes referred to above, as Article 130/2 provides that "use as of the date when the compulsory license request has been made is to be evidenced". In other words, any use made after the above timeframes, but before the compulsory licence request, will remedy non-use after the above deadlines until the date when the request for compulsory licence is made. This increases flexibility in favour of the patentee. This amendment makes it possible to: offer a patent application for a licence (Article 128/1); and request a compulsory licence for a patent application (Article 130/2).

6 Patents cannot be cancelled on the ground of non-use and the sole penalty for the non-use of a patent is a compulsory licence. Filing with office of declaration and evidence of use discontinued The requirement to file with the office a declaration and evidence of use has been annulled. Under Decree-Law 551, patent use had to be reported to the Patent and Trademark Office by filing the appropriate declarations and documentary evidence to such effect. The new IP Code is silent on this issue and contains no provisions regarding the declaration and documentary evidence of the use of patents. Therefore, the prosecution of the filing of declarations and other documentary evidence concerning the use of patents has been discontinued and no action need be taken from January in this regard. This is a welcome development, as it streamlines this process by simplifying and reducing prosecution costs regarding the maintenance and working of patents. Compulsory licences Compulsory licences have been maintained by introduction of the following grounds for requesting a compulsory licence: behaviour that results in a restriction or breach of competition rules (Article 129/1-e of the IP Code as opposed to unfair competition under Article 93 of the repealed Decree-Law 551); the exportation of pharmaceutical products to address public health needs in other countries. This requirement has been introduced on the basis of Article 31bis of the protocol amending the Agreement on Trade-Related Aspects of Intellectual Property Rights, which came into effect on January ; and the inability to develop a new plant variety without infringing a patent. In addition, the Competition Board has also been introduced to hear and decide cases alongside the courts and judiciary where the grounds for requesting compulsory licences concern the restriction or breach of competition rules (Article 129/2 of the IP Code). Adoption of reinstatement Article 107/2 of the new IP Code introduces reinstatement to Turkish legislation, thus furthering harmonisation with the European Patent Convention. This is a welcome development, as reinstatement was not permitted under the repealed Decree-Law 551. The new IP Code mirrors Article 122 of the European Patent Convention in this regard. However, the Patent and Trademark office has yet to settle on agreed practice regarding reinstatement. For example, European patent validations not effected within the deadline for various reasons must wait for the office's decision regarding reinstatement. For patents that have lapsed by failure to pay annuities on time, the office will reinstate the patent provided that the six-month grace period for late payment with fines expires after the IP Code's enactment date (ie, January ). Employee inventions Employee inventions are one of the new IP Code's main areas of intervention. This chapter has undergone substantial structural modifications with resulting interpretative uncertainties. The new IP Code provides three regimes for employee inventions: patentable inventions which are service inventions that benefit the employer or free inventions which benefit the inventor; inventions made in higher education bodies; and inventions made as part of projects supported or financed by public bodies. Under Article 116/1 of the IP Code, an employer must apply for a patent on claim of full ownership of a service invention. In such cases, the employer must file the first patent application before the Patent and Trademark Office.

7 Under the repealed Decree-Law 551/1995, employers had the right to apply to the Patent and Trademark Office for a patent (Article 26/1) and could also file a patent application in a foreign country (Article 27/1). Inventions made in higher education bodies The IP Code has abolished the so-called 'professors' privilege' regarding the ownership of inventions made during the performance of work duties. All inventions made by scientific staff (including doctorate students and interns in the course of their duties) are deemed to belong to the higher education body concerned, with the proviso that in reply to a declaration of invention made by the inventor, the higher education body makes a formal request of ownership for the invention which is tied to the obligation to file a patent application. If a patent application is not filed on time, ownership of the invention reverts to the inventor. Under Article 121/5 of the IP Code, Articles 115, 116, 118 and 119/4 are not applicable to inventions made in higher education bodies. Inventions made under projects supported or financed by public bodies Article 122 of the new IP Code constitutes new rules for inventions made in the scope of projects supported or financed by public bodies. Persons benefiting from such a project or support must inform the public body in question in writing within one year from the declaration of an invention if they claim ownership thereof. Employee inventions applicable solely to patentable inventions In contrast to the Articles 16(1) and (2) to 33 of repealed Decree-Law 551/1995, which distinguished between patentable inventions and non-patentable technical improvements within the context of employee inventions, the IP Code is silent about non-patentable technical improvements. Accordingly, under Article 113(1) of the new IP Code, employee inventions are restricted to patentable inventions only. Filing language Under Article 90/2 of the new IP Code, any descriptions, claims, abstracts and drawings, if any, can be filed as part of a patent application in the official language of any signatory country to the Paris Convention or the Agreement on Trade-Related Aspects of Intellectual Property Rights or the language of any other country subject to reciprocity. Under Article 42/4 of the repealed Decree-Law 551, the filing language was limited to English, French and German. Mandatory declaration for genetic resources Article 90/4 of the IP Code introduces a mandatory declaration to patent applications concerning genetic resources and traditional knowledge based on genetic resources. This requirement is introduced on the basis of Turkey's membership of the Convention on Biological Diversity and the Cartagena Convention on Biosafety. There is no need to make this declaration for patents validated in Turkey through the European Patent Convention. Farmer exception The new IP Code has introduced the 'farmer exception' to the provision regarding the scope of patent rights concerning: new plant varieties the use of production material originating from such new plant varieties is subject to Law 5042 on Plant Breeder's Rights (Article 85/4); and patented animal breeding material farmers have the right to use such material in their operations and these rights will be used in compliance with the yet-to-be-released regulation (Article 85/5). Cancellation of independent claims Under Article 138/4 of the new IP Code, the cancellation of an independent claim causes the

8 cancellation of any dependent claims provided that each of the dependent claims, on its own, does not meet the patentability criteria. Accordingly, the dependent claims that meet, independently from each other, the patentability criteria, will survive. The IP Code does not provide for the possibility of amending claims by combining them to overcome their cancellation. This stance conforms court practice by retaining or rejecting claims in their entirety. It is regretful that the IP Code has not brought the amendment of claims in the course of invalidity actions before the IP courts in line with Article 138/3 of the European Patent Convention. State-of-the-art search report deadlines The deadline for requesting a state-of-the-art search report has been shortened to 12 months from the filing date of an application (Article 96/1 of the new IP Code) and the priority date has not been retained. Under the repealed Decree-Law 551, this deadline was 15 months from the application date or priority date. Amending or commenting on official communications The possibility to amend and comment on official communications by an examiner before a substantive examination report is issued is limited. A single substantive examination report will be issued, whereas up to three examination reports were previously allowed. This provision realises the long-standing Patent and Trademark Office practice of limiting the number of replies and amendments allowed against office actions concerning substantive examination reports. Annuity fees Under Article 101/2 of the new IP Code, no yearly annuity fee is paid for the second annuity. Yearly fees are due from the end of the second year from the date of filing. Post-grant opposition (newly introduced) Under the new IP Code, the grounds of opposition are that: an invention is not novel, includes no inventive step or is not susceptible to industrial application; an invention's subject matter is excluded from patentability; an invention lacks sufficient disclosure; and an invention contains subject matter which extends beyond the content of the application as filed. The deadline and procedural sequence are as follows: oppositions must be lodged within six months from the publication of the decision to grant a patent; opposition proceedings develop in the usual way with the Patent and Trademark Office notifying the opposition lodged to the patentee and inviting it to file any observations and amend the patent if required; the Patent and Trademark Office's opposition board examines any observations and amendments filed by the patentee and then renders its decision, which can be refusal of the opposition or the patent's total or partial invalidation; and the patent, in its amended version, is published in the Official Patent Bulletin, on approval, within two months by the patentee following the amendments received from the opposition board. Should the patentee not approve the amendments and not file them with the Patent and Trademark Office within two months (if required), the patent will be deemed invalid.

9 Invalidity decisions are issued by the Patent and Trademark Office and published in the Official Patent Bulletin. Decisions can be appealed within two months before the Ankara IP Court. Enforcement burden of proof regarding process patents With regard to patent enforcement, Article 141/2 of the new IP code aims to remove any room for interpretation by retaining that: "where the patented process results in a new product or substance, those claiming the contrary in respect of products or substances having the same characteristics, shall have to bring evidence thereof"; and "where the products or substances are the same as those obtained by the patented process, the court has discretionary competence to ask the defendant to bring evidence that said products/substances are obtained by a process which is different than the patented one". These provisions are in line with the Trade-Related Aspects of Intellectual Property Rights Agreement. Patent infringement under new IP Code Under Article 141 of the new IP Code, the following actions constitute patent infringement: the unauthorised copying (either partially or totally) of a patented product; the unauthorised import, sale, distribution or commercialisation of copied products; keeping infringing products for commercial purposes; the use of such products; entering into agreements concerning copied products; usurping the rights of a patent or utility model (this is a new provision); expanding the rights that the rights holder confers by a contractual or compulsory licence or the transfer of such rights to third parties; and the unauthorised use of a patented process or the import, sale, distribution or commercialisation of such products. These provisions are almost identical to those in Article 136/1 of repealed Decree-Law 551. Notably, the new IP Code has added "making proposals to enter into agreement in relation to such products" to the list of what constitutes patent infringement. It will be interesting to see how case law determines the scope of application of this newly added act of infringement. Notably, the new IP Code has removed the following patent infringement actions which featured in repealed Decree-Law 551: acts facilitating participation in patent infringement; and failure to disclose the supplier/source (who) and the way of procurement (how) of an infringing product. Legal remedies against patent infringement The patent holder may request the following remedies against patent infringement: evidential action to determine the act of infringement; the prevention of potential infringement; stopping acts of infringement; compensation for material and moral damages; no moral damages for geographical indications and traditional product names; the confiscation of infringing products and the devices and machines used in the production of such products; measures to prevent the continuation of infringement, especially with regard to processes which change the shape or appearance of the seized products; the destruction of machinery and erasing of trademarks on products where IP infringement is

10 unavoidable; the assignment of IP rights for confiscated infringing products, devices and machinery used in the production of such infringing products and the deduction of the value of such products, devices and machinery from the amount of compensation determined by the court; and the publication of the court decision in daily newspapers or via similar mediums in whole or in summary. At the enforcement level, the new IP Code aims to strengthen the remedies for patent infringement by making it possible to make a court request for the "determination and prevention of infringement" as part of a permanent injunction order. Further, the new act provides confiscation rights for the infringing products. As regards the devices and machinery used in the production of such products, confiscation rights are limited to devices and machinery which are specifically used for the production of infringing goods. Compensation With regard to compensation for patent infringement, rights holders can request compensation for material damages, moral damages and any use which has been detrimental to a patent's reputation. Material damage can be claimed for effective loss and the rights holder's non-realised income. The rights holder can choose between the following modes of calculation in order to determine nonrealised income: probable income that the rights holder would have earned if the infringer's products had not been introduced to the market; net income earned by the patent infringer; and the licence fee that the rights holder would have charged had the infringer been a legitimate licensee. The new IP Code changed the calculation method for non-realised income by determining the net income which a patent infringer obtained through the use of the IP right in question. Repealed Decree-Law 551 stipulated that non-realised income must be calculated by considering parameters such as economic importance, the terms of IP rights and the number and type of licences issued during the infringement investigation. The new IP Code has removed the parameter of the term of patent rights and instead sets parameters concerning: the particular economic importance of the patent in question; the number, term and types of licences concerning the patent at the time of infringement; and the nature and dimension of the infringement. Indirect contributory infringement Article 86 of the new IP Code is based on Article 74 of repealed Decree-Law 551; however, the word 'instigate' has been changed to 'encourage' in Article 86(2) of the new IP Code. As a result, rights holders can prevent third parties from providing the essential elements of a patented invention which would enable unauthorised third parties to exploit it. The new IP Code sets the following conditions for contributory infringement: third parties must provide essential elements of the patented invention to unauthorised third parties; third parties must be aware of the means which render a patented invention's duplication/implementation possible; and it must be proven that third parties encouraged the parties concerned to commit patent infringement. Doctrine of equivalents

11 Article 89(5) of the new IP Code is based on Article 83(6) of Decree-Law 551, with a number of minor differences, but maintains the following criteria according to which equivalents are assessed. The scope of patent protection is assessed by considering whether an element equivalent to the element specified in a patent claim exists when the alleged infringement is put forward. An element is deemed equivalent to another found in the claims if it essentially performs the same function in an identical manner and produces the same result. Preliminary injunction Under the new IP Code, a patentee can ask for a preliminary injunction to secure the effectiveness of a court action. Rights holders must prove that an infringement occurred or that there was a serious and effective effort/preparation made to perform such infringement. A preliminary injunction can be requested to: prevent and cease: infringing activities; the means being used in the production of infringing products; the means being used to make use of the patented process; or confiscate the infringing products being produced or imported. An injunction can include activities in Turkey, including customs and free port zones. The new IP Code enables rights holders to request the confiscation of the means used to: produce infringing products; or make use of the patented process. Comment The new IP Code aims to improve the quality of patented inventions and harmonise Turkish patent law with EU legislation and the international agreements to which Turkey is a party. However, while the new IP Code has yet to be fully harmonised with the European Patent Convention, it is expected that these gaps will be filled when parties enforce their patent rights before the courts. For further information on this topic please contact Mehmet Nazim Aydin Deriş or Okan Çan at Deriş Patents and Trademarks Agency by telephone ( ) or (aderis@deris.com.tr or okan.can@deris.com). The Deriş website can be accessed at The materials contained on this website are for general information purposes only and are subject to the disclaimer.