1. Does competition law apply to the obtainment, grant, acquisition, exercise and transfer of intellectual property rights?
Law No. 4054 on the Protection of Competition (Law No. 4054) applies, to inter alia, the obtainment, grant, acquisition, exercise and transfer of intellectual property rights (IPRs). Paragraph 5 of Guidelines on the Application of articles 4 and 5 of Law No. 4054 on the Protection of Competition to Technology Transfer Agreements (Technology Transfer Guidelines) provides that the fact that legal regulations related to intellectual property grant exclusive rights of exploitation to right holders does not imply that intellectual property rights are immune from the area of application of the competition law. Moreover, articles 4, 5, 6 and 7 of Law No. 4054, which govern restrictive agreements, concerted practices and decisions of association of undertakings; abuse of dominance and merger control respectively, are also applicable to agreements whereby the holder of intellectual property right licenses another undertaking to use its intellectual property rights.
The Board also acknowledged that from a perspective of Turkish competition law, it could be indicated that Law No. 4054 does not include any provision specifically for intellectual property rights under the provisions on purpose and scope and other relevant provisions of Law No. 4054 and thus, it is accepted in the literature that there is no obstacle for the application of Law No. 4054 directly to the legal actions and conducts based on intellectual property rights (Philips, 26 December 2019, 19-46/790-344).
Furthermore, the Competition Board (Board) has explicitly dealt the current position of competition law within the intellectual property (IP) cases in Turkey in its recent Turkish Musical Work Owners Society decision (22 August 2017, 17-27/451-193). In this regard, the Board has initially stated that (i) the positioning of and the need for competition law within the IP cases have long been a matter of debate, (ii) despite the fact that there are also contrary views, the EU Commission and the Court of Justice of the European Union have acknowledged that competition law should be applied to markets related to intellectual property rights, (iii) indeed, the report titled Intellectual Property Rights Policy, Competition and Innovation published by World Intellectual Property Organization (WIPO) on December 2013 concluded that those two fields of law are developed with a view to supporting a system of promoting dynamic competition through varied products and encouraging creative processes. The Board also cited the relevant WIPO report, according to which matters such as exclusionary agreements, abuse of dominant position, possibility of horizontal or vertical mergers affecting the competition and the situation of profession associations as the main courses where competition law and IP law may interact.
The statutory framework for the application of competition law rules to the exercise of IPRs in Turkey is as follows:
Restrictive agreements, concerted practices and decisions of associations of undertakings
Article 4 of Law No. 4054 is akin to and closely modelled on article 101(1) of the Treaty on the Functioning of the European Union (TFEU). It prohibits all agreements between undertakings, decisions of associations of undertakings, and concerted practices that have (or may have) as their object or effect the prevention, restriction or distortion of competition within a Turkish product or services market or a part thereof. Similar to article 101(3) of the TFEU, article 5 of Law No. 4054 provides that the prohibition contained in article 4 of Law No. 4054 may be declared inapplicable in the case of agreements between undertakings:
- that contribute to improving the production or distribution of products, or to promoting technical or economic progress;
- that allow consumers a fair share of the resulting benefits;
- that do not impose restrictions that are not indispensable to the attainment of these objectives; and
- that do not afford such undertakings the possibility of eliminating competition in respect of a substantial part of the products concerned.
This individual exemption test is done on a case-by-case basis.
Abuse of dominance
The main provision of Law No. 4054, which regulates the behaviour of dominant firms, is article 6, which is similar to article 102 of the TFEU. It provides that any abuse of a dominant position (on the part of one or more undertakings, individually or through joint agreements or practices) in a market for goods or services within the whole or part of Turkey, is unlawful and prohibited. No exemptions as provided under article 5 of Law No. 4054 are applicable for the abuse of dominance.
Article 7 of Law No. 4054, which governs mergers and acquisitions, grants the Board the authority to regulate, through communiqués, whether a concentration must be notified and granted approval by the Board, to gain legal validity.
Specific regulations and provisions
Within the framework of competition law, the secondary law that relates to the interaction between antitrust and IP law is as follows:
Technology transfer agreements
Block Exemption Communiqué No. 2008/2 on Technology Transfer Agreements (Communiqué No. 2008/2) provides for a protective cloak for agreements involving the transfer of IPRs and in particular technology licensing agreements.
Research and development (R&D) agreements
Block Exemption Communiqué No. 2016/5 on Research and Development Agreements (Communiqué No. 2016/5) provides a block exemption for research and development (R&D) agreements, including an exemption for R&D agreements that contain provisions relating to the assignment or licensing of IPRs to carry out joint R&D, paid-for R&D or joint exploitation, so long as those provisions are not the primary object of such agreements, but are instead directly related to and necessary for their implementation.
Standardisation agreements, franchise agreements and contract manufacturing agreements
Block Exemption Communiqué No. 2002/2 on Vertical Agreements (Communiqué No. 2002/2) applies to standardisation, franchise and contract manufacturing agreements to the extent they satisfy the conditions set out in the relevant communiqué.
Block Exemption Communiqué No. 2013/3 on Specialisation Agreements (Communiqué No. 2013/3) establishes the conditions for granting block exemptions to specialisation agreements between undertakings and extends this exemption to licensing or intellectual property transfer agreements that are directly related to, or necessary for, the functioning of the exempted specialisation agreements.