3D Marks At The Intersection Of Intellectual Property And Competition Law

With its decision dated 01.08.2024 and numbered 24-32/758-319, the Turkish Competition Authority (“TCA”) rendered a landmark ruling that will be debated in the literature for a long time to come with regard to the delicate balance between IP law and competition law. The TCA concluded that the relevant economic entity, by using three-dimensional (“3D”) marks owned by company under investigation (“The Right Owner”) had abused its dominant position, by excluding its competitors from the market and accordingly imposed a number of sanctions.

This decision has striking implications for trademark law practice, particularly in terms of the scope of protection afforded by device and 3D marks and whether such rights may be used as a means to circumvent competition rules. However, the most controversial aspect of the decision lies in the fact that the TCA did not limit itself to imposing an administrative fine but also ordered the withdrawal of a registered property right, despite the existence of a final court judgment upholding that right. Although the TCA could have opted for behavioural remedies—such as prohibiting the enforcement of the registered rights against third parties—it instead moved beyond its role as a “market regulator” and assumed a position that directly interferes with the very essence of the property right.

Circumvention of the Law and the Limits of Property Rights

In the case at hand, the right owner had registered the packaging shape as both a trademark and a design before the Turkish Patent and Trademark Office (“TÜRKPATENT”). The TCA considered that registering the shape of a product whose patent or design protection is inherently time-limited as a trademark carries the potential to secure an indefinite monopoly through renewals and therefore assumed this a strategy “attempting monopolization”.

The TCA analysed the right owner’s conduct through the concept of circumvention of the law (fraus legis). According to the decision, trademark registrations were used not to indicate the commercial origin of the goods, but rather to perpetuate exclusive rights over the shape indefinitely and to prevent competitors from entering the market. The observations that the entity had sent cease-and-desist letters to competitors even based on pending, unregistered applications, and imposed an obligation on customers to use only its own packaging (de facto tying), were characterized as an abuse of rights. The TCA concluded that a right acquired under the Industrial Property Code (“IP Code”) had been used as a “tool” to circumvent Competition Law.

An Unprecedented Sanction: Withdrawal of Industrial Property Rights

Taking into account the gravity of the infringement, the TCA did not confine itself to imposing an administrative monetary fine but also ordered a radical structural remedy that strikes at the very foundation of IP rights with the purpose of “restoring” competition. Pursuant to the decision, the right owner was required, within a limited period, to withdraw the 3D trademark registration and the related design registration deemed to be subject of infringement, and to withdraw its other pending 3D mark applications that had not yet been registered.

To the best of current knowledge, this is the only instance in the history of Turkish competition law in which a registered IP right has been ordered to be withdrawn under the label of a “structural remedy”. While general theory of competition law favours intervention in the exercise of IP rights rather than their existence, in its decision the TCA regarded the registration itself as the main factor sustaining the violation and chose to eliminate the right altogether.

Jurisdictional Debate: Is the TCA a “Super Court of Cassation”?

The most controversial aspect of the decision is the TCA’s positioning of itself above TÜRKPATENT and the specialised IP Courts. One of the subject 3D marks, dating back to 2014, had been definitively ruled registrable as a trademark by the Ankara 2^nd IP Court and the 11^th Civil Chamber of the Court of Cassation.

For an administrative authority to compel the cancellation of a trademark that has been conclusively held by specialised courts to meet the registration criteria, on the grounds that it “creates an unfair monopoly” undermines the principle of legal certainty. This approach gives rise to concerns that any 3D trademark could, someday, be stripped of its protection through a competition law investigation. Even in the case-law of the Court of Justice of the European Union, intervention has generally taken the form of “compulsory licensing in exceptional circumstances” rather than irreversible revocation of the right itself. In the present case, it is difficult to justify why the TCA, despite having the option to impose a comparable regulatory remedy, chose instead to directly interfere with the property right. In this respect, the decision constitutes an unprecedented intervention with a questionable legal basis and far-reaching practical consequences.

Legal Uncertainty: The “Zombie Trademark” Problem

The enforcement of the decision, requiring the waiver of registered IP rights, entails the risk of “irreparable or irrecoverable damage”. The real legal chaos is likely to emerge at the stage of judicial review of this administrative act. If, in the coming years, the Council of State were to annul the TCA’s decision, the fate of the trademarks that were mandatorily withdrawn would remain an open and difficult question. Under Turkish trademark law, a mark or a design that has been withdrawn cannot automatically be revived and reinstated years later by virtue of an administrative court decision.

Moreover, during the period until the judicial proceedings are concluded, the distinctiveness of the mark may be seriously eroded, and the device may even become commonplace (generic). Furthermore, where similar shapes are used by third parties during the period in which the trademark is removed from the register and deprived of protection, it remains unclear whether—and against whom—the trademark owner could claim compensation for the resulting damages.

Accordingly, even if a future decision of the Council of State were to restore the trademark from a purely legal perspective, the commercial and legal consequences in the interim would be irreversible.

Conclusion

The TCA decision serves as a serious warning for trademark owners. It clearly demonstrates that a trademark registration certificate is not an absolute shield which grants immunity from competition rules.

Although the stated objective of the TCA is to “restore distorted competition”, the chosen method of “cancellation of rights” directly interferes with the core of the right to property. Such radical interventions affecting the essence of property rights should, as a requirement of the rule of law, be carried out not through administrative decisions but only by final judicial rulings. Otherwise, a step taken today in the name of “protecting competition” risks becoming a precedent that tomorrow undermines confidence in the IP system and stifles innovation—the very driving force behind IP protection.

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