Brand owners must do more to block sale of counterfeits online

The covid-19 pandemic has affected commerce and brand enforcement around the globe. From March 2020, short but repeated lockdowns and other measures have been applied in Turkey, changing many aspects of trade. The supply and demand of product categories, as well as their means of production and distribution, have been particularly affected. Statistics from the Turkish Statistical Institute reveal that the rate of ordering goods and services online reached to 64.5% in June-July 2020, increasing dramatically from 34.1% in 2019.

Crises often present new opportunities for crime, and covid-19 has been no exception. Counterfeiting groups have sought to capitalise on the new demand for virus-mitigating products, such as face masks, virus test kits, personal protective equipment for frontline workers and medical supplies used for treating covid-19 patients.

According to the European Commission Staff Working Document – Turkey 2020 Report, Turkey continued to be among the top producers of counterfeit beverages, perfumes, cosmetics, shoes, clothing and personal accessories throughout 2020. Such illicit and, in certain cases, hazardous products remained readily available in open bazaars and at international fairs in Turkey’s tourist areas.

Domain names and websites

Keywords, metatags and hashtags

For domains that are subject to UDRP proceedings, the Turkish authorities have limited power. They can block access to the domains from Turkey but cannot grant any decisions regarding ownership or block access to all domains.

Turkey’s ccTLD is ‘.tr’. Extension domains can be registered before the local authorities and are not subject to UDRP proceedings.
Nic.tr, operating in the computer centre of the Middle East Technical University, was the authorised body in Turkey for registering all ‘.tr’ extended ccTLDs, but the Information and Communication Technologies Authority (ICTA) has recently announced that the Turkish Network Information System (TRABIS) will soon have the authority for registering and administrating domain names. TRABIS has yet to be set up, but ICTA has temporarily established some authorised bodies. Nic.tr is continuing to handle applications and renewals for certain ‘.tr’ extended ccTLDs (ie, ‘gov.tr’, ‘edu.tr’, ‘bel.tr’, ‘av.tr’, ‘dr.tr’, ‘tsk.tr’, ‘pol.tr’,
‘k12.tr’ and ‘kep.tr’) and has transferred its authority for other ‘.tr’ extended ccTLDs to the temporary bodies.

There is no change to policies, rules and operation criteria for domain name applications.

While applying for the registration of a ‘.tr’ domain, applicants must prove their rights in the sign used as the second-level domain (SLD) (ie, the distinctive part of a domain). Such a right may arise from a personal name, trade name or trademark and must be documented. There are some ‘.tr’ domains that can be registered according to the ‘first come, first served’ principle (eg, ‘.gen.tr’, ‘.web.tr’, ‘.tv.tr’ and ‘info.tr’) without proof of ownership.

It is possible to file an objection against a domain registration. Objections against all ‘.tr’ domains are still examined by nic.tr, which is strict when it comes to proof of ownership.

In some conflicts with ‘.tr’ domains, it may be better to apply directly to the courts. If the domain is registered for a trade name of the registrant but the sign used as an SLD is also another party’s trademark, the matter would be resolved by the courts.

These actions are based mostly on trademark infringement according to Article 7/3-d of the IP Code. However, it is also possible to request cancellation or assignment of a domain regarding unfair competition, the nullification of a trademark or the cancellation of the trade name.

Where the rightful trademark owner has a registration in Turkey, the following must be proven:

• the SLD is identical or similar to the plaintiff’s trademark;
• the domain is used for identical or similar goods and services with the trademark. creating commercial impact; and
• the domain owner has no rights in or legal affiliation with the SLD.

The courts may decide to cancel the domain or, on request, may assign it to the trademark owner. The courts may also block access to the domain as a final decision or a preliminary injunction on request of the plaintiff. The Access Providers Union is the responsible authority to apply such court decisions.

If the attacked domain is registered as a trademark and the rightful owner has no earlier trademark registration in Turkey, a nullification action against the trademark and cancellation or assignment of the domain can also be claimed. In addition, the rightful owner may request cancellation or assignment of the domain in an unfair competition action. Before taking such action in court, it is advisable to have online evidence available to avoid data loss. Determination of evidence can be made through the notary public’s online platform or a court action. Website content may infringe separately from the domain name. Since a domain name would not be the subject matter of a dispute, the courts would not decide to cancel or assign the domain. However, the court may decide to block access to the website or to remove the infringing content from the website.

Even though there is no infringing content on the website or domain name, people who wish to be seen in search results and gain an advantage from a well-known mark may use keyword advertising, metatags and even hashtags to draw customers to that website. Such uses may be deemed trademark infringement by the IP courts. The courts have the discretion to prevent the defendant from using the mark as a keyword, metatag or any other similar use. If the content of the defendant’s website is also infringing, the courts may decide to remove the infringing content from the website or block access to that site or page.

Social media

Today, many social media platforms are used for online shopping and product promotion. If a trademark is used unfairly on a social media platform, the trademark owner can claim trademark infringement and unfair competition. Evidence determination is preferred to avoid data loss.

Even though the courts can determine unfair use on social media, related URLs may not be blocked because most social media platforms use secure hypertext transfer protocols and the authorities are not permitted to block access. In practice, the courts will remove the infringing content from the social media account.

In October 2020, a new amendment to Law 5651 entered into force and is expected to have a significant impact on tackling counterfeiting in Turkey. With this amendment, social network providers that have access to more than 1 million users a day from Turkey are required to assign a representative in Turkey to receive and apply legal notifications from the Turkish authorities and to follow all liabilities of Law 5651. Where social network providers assign no representative, there will be an administrative fine. Eventually, within a given period following a second administrative fine, Turkish tax residents will be banned from publishing online advertisements on these social networks, no new contracts can be signed and no payments can be made. Where the social network provider still fails to assign a representative, the president of ICTA can apply to the Criminal Court of Peace to gradually restrict bandwidth by up to 90%. These decisions can be objected to and, if the social network provider complies with these liabilities at a later stage, the decisions can be revoked.

To date, advertising ban decisions have been issued against Pinterest, Twitter and Periscope/Scope, since no representative has been assigned by these networks in Turkey.

Spam

Email and other communication channels are used for advertising purposes. Spamming is a method by which unwanted commercial messages are sent. If spam messages consist of an identical or similar sign to a trademark, it may be considered trademark infringement.

According to Article 6 of E-Commerce Law 6563, it is prohibited to send commercial advertising messages without the recipient’s prior approval.

Liability regime

Several individuals may be liable based on court decisions regarding online domain use issues. If a decision determines that the use of a domain results in trademark infringement, the infringer who owns the domain is directly responsible. According to Law 5651, after notification of violation, hosting providers and access providers are responsible for removing content. Where a court decision orders access to a website or URL to be blocked, the Union of Access Providers should block access to that website or URL. Where use on a social media platform is deemed infringing, the platform should remove the content. If the decision orders the cancellation of a ccTLD, nic.tr should cancel the subject domain.

If the decision determines the online use of a sign to be unfair competition, service providers are responsible in accordance with Commercial Code 6102. If the decision determines that the online use is against E-Commerce Law 6563, the infringer – as the service provider – is responsible.

Online and offline – the sale and promotion of counterfeits

Due to the increase in online sales of counterfeits, organising raids at the premises, stores, warehouses or places of manufacture of infringers is no longer enough to deal with counterfeiting. Likewise, targeting only online sales channels will not bring satisfying results. Brand owners need to adapt their brand protection strategies to cover both online and physical platforms.

Online and on-site investigation strategies

Determination of the scope of infringing activities through online and on-site investigations is essential to build the best cause of action against infringers.

The biggest problem blocking investigations against online sellers is the anonymity of the online marketplaces that they hide behind. To eliminate this problem, investigation firms will purchase a suspected product online to track down the source and ascertain whether the goods are counterfeit.

For on-site investigations, it is vital to disclose information and evidence to be used during potential legal actions, such as addresses, samples, receipts and photographs of the premises and counterfeit items. The collaboration of investigators with local councils is essential to maintain control over local investigative activities, since Turkey has no regulation establishing the rules of private investigations and privacy is protected as an absolute right under the Turkish Constitution.

Tackling the online sale of counterfeits and ISP liability

Where the seller of counterfeit products can be determined, a rights holder can obtain legal remedies in the usual manner through civil and criminal trademark infringement and unfair competition actions. Otherwise, the rights holder can request to block access to the related websites from Turkey or remove the infringing content through legal actions.

Internet service providers (ISPs) must remove infringing content on the written request of a rights holder (Law 5651). ISPs may also be held responsible for helping infringers by filing civil and criminal trademark infringement and unfair competition actions.

Offline enforcement actions

Customs measures

Customs monitoring plays a key role in challenging counterfeits in Turkey, since Turkey is a transit country between Asia and Europe. Numerous fake products are either manufactured in Turkey or come from the Middle East or Asia, with the intention of moving on to Europe via Turkey.

According to Turkish Customs Code 4458, trademarks, patents, designs, copyrights and geographical signs can be recorded within the Custom’s monitoring system for the seizure of (suspected) counterfeit goods via a simple online application to the directorate general of Customs. On acceptance of the applications, the recordal reflects all local customs authorities’ systems. It remains valid for one year and can be renewed annually, unless the IP rights expire during that period. Customs monitors imported and exported goods passing through Turkey in transit and in free trade zones.

On determining suspected counterfeit goods, Customs will temporarily seize these goods and notify the rights holder or its representative. The rights holder must then obtain and submit a preliminary injunction order from a civil IP court or a criminal raid order within 10 working days for the permanent seizure of the counterfeit items. The 10-working-days term is extendible by up to a further 10 working days at the request of the rights holder and if accepted by Customs. Before deciding whether to pursue legal action, the rights holder may need to examine the seized goods or their photographs to verify their counterfeiting nature.

Where it is possible to pursue either criminal or civil proceedings for obtaining a permanent seizure order, criminal proceedings are to be advised since the claimants may be requested to pay guarantee amounts for the issuance of a preliminary injunction order by the civil courts.

According to the simplified destruction procedure established under the Customs Code, counterfeit goods may be destroyed by Customs without a court order on a joint request of the rights holder and the owner of the goods.

Customs has ex officio authority to seize suspected goods for IP rights that are unregistered in the Customs monitoring system and then invite the rights holder to take any necessary action within three working days.

Criminal proceedings

Article 30/1 of the IP Code reads: “anyone manufacturing goods or providing services with identical or confusingly similar trademarks to another’s, offering for sale or selling, importing or exporting, buying, keeping, shipping or stocking them for commercial purposes shall be liable to imprisonment for one to three years and a judicial fine of up to 20,000 days.”

Criminal proceedings against infringers begin with a criminal complaint of a registered brand owner before the Prosecution Office. Where the rights holder claims a criminal raid order, this request is examined by the prosecutor with priority and then, in the case of the prosecutor’s approval, the file is sent to the Criminal Courts of Peace, which will have the final say on raid order requests. On issuance of a raid order, the police conduct a raid, advisedly with the participation of the rights holder’s representative. The claimants are required to submit solid evidence for the acceptance of raid order claims, which is why pre-investigations are crucial.

When the criminal complaint is found lawful, the prosecutor prepares and sends its indictment to the criminal court and a criminal court action is brought on acceptance of the court’s indictment. According to the ‘fast destruction’ process established under Article 163 of the IP Code, the prosecutor may also request a destruction order from the criminal court if there is a risk of damage, serious loss of value or if the storage incurs considerable expense where the counterfeit nature of these goods is confirmed by an expert report.

Criminal court actions mostly result in imprisonment or a fine. If the indictee has no criminal record, the declaration of the verdict may be suspended under Article 231 of the Code of Criminal Procedure on the indictee’s request. In such a case, the indictee will be under supervisory control for five years and the verdict will be declared if it commits another crime within that period.

The court can also decide on the destruction of the counterfeit goods during the trial or at the end of the proceedings.

According to Articles 253 and 254 of the Code of Criminal Procedure, the courts also need to apply the reconciliation process and invite the parties to seek reconciliation before deciding on the complaint.

Civil court actions

The IP Code regulates civil remedies aiming to prevent the infringement of IP rights even before infringement takes place.

A registered rights holder may demand determination or cessation of the infringement, as well as compensation of its damages by filing a civil court action.

According to the IP Code, ex parte or inter partes preliminary injunctions are also applicable, entitling the courts to issue preliminary injunctions so as to secure final judgments. Where the claimants prove the likelihood of infringement or ongoing infringement, the courts tend to grant a preliminary injunction.

Claimants are usually required to deposit a guarantee amount that is determined by the courts depending on the merits of the case. This guarantee is kept by the court until the verdict is finalised and is refunded to the claimant unless the defendant claims any losses. The defendants may ask the courts to lift preliminary injunctions in return for guarantees; however, in practice, the courts mostly refuse such requests.

The amount of compensation is determined by the courts through the calculation of any losses incurred by the rights holder and any profits made by the infringer as a result of the infringing acts.