Mediation as a Prerequisite for Legal Proceedings in terms of Commercial Disputes and Particularly Intellectual Property Rights Disputes

Mediation has been rendered prerequisite for legal proceedings related to labour law disputes recently. Subsequently it is now rendered prerequisite for commercial disputes covered by the “Law on Procedure of Commencement of Execution Proceedings  Relating to Pecuniary Debts Arising out of Subscription Agreements”:

ARTICLE 20- Following article shall be inserted to Turkish Code of Commerce numbered 6102 dated 13/1/2011 subsequent to Art. 5:

“3. Mediation as a Prerequisite for Legal Proceedings              

Art. 5/A- (1) Mediation shall be prerequisite for legal proceedings for the actions subject matter of which relates to payment of debt or damages among the commercial actions which are provided by Art. 4 of the Code herein and other acts.

(2) The mediator shall conclude the application within six months of her assignment. In case of obligatory circumstances this period may be extended up to two weeks.”

ARTICLE 21-  The following provisional provision has been inserted to the Code numbered 6102:

“Provisional Article 12- (1) Provisions in the Code herein which relate to mediation as a prerequisite for legal proceedings shall not apply to actions which has been heard by courts of first instance, courts of appeal and Court of Cassation as of the date of entry into force of said provisions.”

ARTICLE 22- The following provision has been inserted to Article 3 Paragraph 1 of the Law on Mediation in Civil Disputes numbered 6325 dated 7/6/2012.

“However, Article 18/A relating to mediation as a prerequisite for legal proceedings is reserved.”

ARTICLE 23- Fifth Chapter entitled “Mediation as a Prerequisite for Legal Proceedings” and provision below inserted to Act numbered 6325 following the Forth Chapter and the other chapters have been arranged accordingly.

 

Aforesaid Act is such an act that is described as omnibus bill and framework articles 20-23 in this act provides for compulsory mediation procedure. By means of its framework article 20, the act stipulates that article 5/A is to be inserted to Turkish Code of Commerce (TTK) numbered 6102 dated 13.01.2011.

Under the Art. 5/A inserted to TTK, mediation is laid down as a prerequisite for lawsuits cause of actions of which are payment of an amount of money and which are brought for the purposes of claims for debt or damages provided within scope of Art. 4 of TTK. Although aforesaid provision may appear as a regulation applicable merely to commercial actions, its applicability to actions laid down under intellectual property legislation is beyond any question. Civil actions provided under intellectual property legislation are deemed to be commercial actions under Art. 4/1(e) of TTK regardless of whether the parties to disputes are merchants.

It should be emphasised that aforesaid Art. 4/1(e) does not refer to the actions arising out of intellectual property legislation but rather the actions which are provided for therein. In other words, the actions which are expressly laid down in intellectual property legislation are to be deemed as commercial actions.

The actions provided under Law No. 5147 of 22.04.2004 on the Protection of Integrated Circuits Topographies, Law No. 6769 of 22.12.2016 on the Industrial Property (SMK) and under the condition that it relates to commercial undertaking Law No. 5846 of 05.12.1951 on Intellectual And Artistic Works (FSEK) are covered by Art. 4/1(e) of TTK. Mediation is laid down as a prerequisite for the actions of debt and actions for damages, cause of which relate to payment of an amount of money owing to aforesaid amendments.

Problems and issues encountered during ordinary legal proceedings are commonly complained about. Ordinary legal proceedings may take considerable amount of time both in terms of legal proceedings and enforcement of court decisions. The delay may even take form of wel-known legal maxim “justice delayed is justice denied”. Delays in ordinary legal proceedings give rise to heavy costs as well.

Furthermore, lack of grey settlements which in turn result in circumstances where parties are identified either as winner or as loser bring forth a tension between parties that hinder their future trade relations. Combination of aforesaid circumstances crate an impetus for lawyers to seek for alternative dispute settlement mechanisms.

Alternative dispute resolution mechanisms, particularly mediation, are settlement methods developed in view of the weaknesses posed by civil legal proceedings. These are resolution mechanisms envisaged with a view to eliminating extreme behaviours and encouraging parties to be more open-minded and to take active part in communication. These settlement methods aim at rapid achievement of results, diminishing concerns, cutting back in terms of administrative and legal aspects. Parties will have to continue trade relations existed between themselves prior to these resolution mechanisms even after the settlement. The persons expected to settle the dispute in alternative dispute resolution mechanisms are to take account of not only legal aspects of each dispute but also the interests. The aforesaid persons and parties are to discuss the dispute in detail and reach a solutions that will be of advantage for everyone.

Since the awareness about economic effects of protection of intellectual property rights has been raised, the position of alternative dispute resolution mechanisms in this respect has been discussed. It is apparent that economic utilization of products would be of no avail without effective protection of intellectual property rights. Effective protection of intellectual property rights will in turn enable an increase in market value of products. Protection of intellectual property rights has been becoming more and more important in terms of finance sector. Protection of trademarks and patents, improvement of license system in terms of technology will ensure economic development thanks to the support it will create for innovation and entrepreneurship.

A tendency that considers protection of intellectual property system as the most important aspect has been growing with a view to ensuring growth, support of investments and encouraging innovation owing to economic development in the World. Nevertheless ensuring an effective intellectual property system requires effective settlement of disputes as well. Thus, alternative dispute resolution mechanisms, in particular arbitration and mediation take an active role in settlement of intellectual property related disputes.

Owing to recent amendments, mediation is laid down as prerequisite for legal proceedings regarding commercial actions cause of which consists of payment of an amount of money. However mediation is an appropriate means of dispute settlement in terms of intellectual property related disputes which fall out of the scope of aforesaid provisions as well.

It has been reported that a considerable amount of trademark related disputes arise out of confusion of trademarks. Trademark disputes do not require a vast knowledge on technology unlike patent and commercial secrets. In mpst cases, whether there is a confusion between trademarks can be determined form the perspective of a reasonable person.

As to patent related disputes it has been reported that the disputes which requires complicated technological knowledge in particular are appropriate for alternative disputes resolution. Taking account of technological aspects of right to patent which embodied in biotechnology, chemicals, pharmaceutical, and computer hardware, an opportunity to select mediators among persons following the technological developments is of utmost advantage.

The Regulation on Inventions of Employee, Inventions Made at Higher Education Institutions and Inventions Made in Public-Funded Projects had previously laid down that disputes shall be settled by means of arbitration.

Settlement of Disputes

ARTICLE 24- (1) Provided that employer and employee do not agree on the terms relating to amount to paid and the form of payment which is to be paid under the provisions of Regulation herein within two months starting from the date of issuance of patent or utility model if employer acquires rights on the invention wholly and within two months starting from the date on which employer starts to enjoy invention if employer acquires the rights on invention partially, the dispute shall be settled by means of arbitration within the framework of calculations in Regulation herein.

(2) The provisions in Civil Procedure Act dated 12.01.2011 numbered 6100 relating to arbitration shall be applicable regardless of whether an arbitration agreement in written form is concluded. For the disputes including element of foreignness International Arbitration Act numbered 4686 dated 21.06.2001 shall be applicable.

Owing to recent amendments aforesaid disputes shall be referred to mediator prior to application to arbitration.

In fact the spirit of Industrial Property Act numbered 6769 is appropriate to mediation. Mediation is particularly regulated in the Act among the provisions relating to conciliation.

Examination of Opposition to Publication

ARTICLE 19- (4) The Office may encourage the parties to refer to conciliation if it deems appropriate. With regard to aspects relating to conciliation Law on Mediation in Civil Disputes numbered 6325 dated 7/6/2012 shall be applicable.

Examination of Opposition to Decision

ARTICLE 21- (3) The Board may encourage to conciliation according to Art. 19 Paragraph 4 if it deems appropriate regarding the oppositions which are raised against decisions rendered in accordance with Art. 19 Paragraph 3.

Opposition and Examination of Opposition

ARTICLE 40-(5) The Office may encourage the parties to conciliation if it deem appropriate. With respect to aspects concerning conciliation the Law numbered 6325 shall be applicable.

 

Disputes relating to copyright law frequently arise out unauthorized reproduction of work of one party by the other party or creation of another work inspired by another work. If express evidence is lacking in dispute, the settlement is generally dependent on determination of opportunities of defendant to reach the work and similarities between the works in terms of their expressions. Therefore it is reported that technical aspects of copyright related disputes are rather negligible and similarity between two works can be determined from the perspective of a layman with the exception of some cases. In this respect, copyright related disputes are appropriate to be settled by means of mediation. Moreover, computer programs which are protected by copyright law require technical expertise as it is the case for inventions protected by patents. In this respect, advantages of alternative dispute resolution mechanisms are becoming more significant particularly regarding the disputes related to computer programs.

Disputes arising out licence agreements and infringement of moral rights in copyright law are appropriate to mediation as well.

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