The European Court of Human Rights’ (“ECHR” or the “Court”) judgment of 09.02.2021 in TOKEL v. TURKEY case, application no. 23662/08, provides an assessment on violation of patent right discussed within the frame of article 1 “Protection of Title” of Exhibit-1: Protocol to the Convention for the Protection of Human Rights and Fundamental Freedoms (the “Convention”). In our opinion, this judgment becomes more of an issue when it is considered that the patent in dispute has been obtained in 1991 during the validity of the Turkish Law on Certificates of Invention, and is subject to the revisions and changes made in the legislative instruments focusing on patent rights in domestic law until the year 2021 when the Court has issued its judgment after exhaustion of all domestic legal remedies.
Before engaging in an assessment of the ECHR Judgment, it is needed to review the history of dispute, as well as the local court and the Court of Cassation judgments in relation therewith.
According to the proceedings brought by Mustafa Tokel (the “Applicant”) against the Republic of Turkey, the Applicant has filed an application on 08.07.1991 for protection of his invention described as an automated tea-drying system, and has, on 26.08.1992, received a certificate of invention, providing protection for his invention within the frame of the then-current Law on Certificates of Invention dated 1879. However, in May 1991, i.e. a short time before receipt of this certificate of invention, the Directorate General of Tea Enterprises (Ҫay İşletmeleri Genel Müdürlüğü – hereinafter “Ҫaykur”), a public economic institution, has started to use the same invention in one of its factories, and in its feasibility report issued in June 1991, has described the specifications and benefits of the invention and announced its plan to use this invention in its factories within the frame of its investment plan of five years thereafter.
In 1993, the dispute between the sides has for the first time been escalated to courts by Çaykur, and in the action brought in Trabzon 1st Civil Court of First Instance with a request of annulment of the Applicant’s certificate of invention, Çaykur has argued that it had installed the subject tea drying system before the date of receipt of the certificate of invention by the Applicant, and that the system covered by the certificate of invention is not indeed a new invention, and that the Applicant had taken copies of the system installed in the factory of Çaykur, and had received its certificate of invention thereupon.
The local court has dismissed the action on the grounds that “the invention in dispute is new and is not in the state of the art, and thus, the invention has been registered for justified causes according to the then-current Law on Certificates of Invention”, and this local court judgment1 has then been upheld by the Court of Cassation 2, and has become final upon rejection of the request of Çaykur for rectification of the local court judgment.
In the meantime, starting from the year 1993, Mustafa Tokel has filed applications to various different courts in years, and arguing that Çaykur was systematically using his invention protected by his certificate of invention without permission, has sought to obtain declaratory judgments for determination and prevention of unfair competition, and through these declaratory judgments, has opted to prevent use of his invention in factories of Çaykur in different cities. Some of the judgments obtained by the Applicant from different local courts make reference to the previous court judgment rejecting the request of Çaykur for annulment of the certificate of invention, and order the defendant Çaykur to stop using the subject system in its factories.3 However, the Court of Cassation’s judgments of reversal rebutting and setting aside the aforementioned local court judgments4 have urged the Applicant to escalate the dispute to ECHR.
In its aforementioned judgments, the Court of Cassations has, in reliance upon “the right of prior use of the system” regulated in Article 77 of the Legislative Decree no. 551 on the Protection of Patent Rights, held and judged that according to said article, the business activities continued in good faith during the period between the date of application for patent protection for the invention and the date of recognition of the patent right provide the proprietor of such business activities with a right of prior use. In addition, expert reports relied upon by said local court judgments were not consistent. As a result, the Court of Cassations judgments given in line with the aforesaid expert reports have also been issued against the Applicant.
At this point, the contradictory and conflicting expert reports and Court of Cassations judgments have resulted in the continued use of the relevant patent by Çaykur without permission and authorization in spite of the final court judgments obtained by the Applicant from various different courts. As a matter of fact, the Applicant have complained that the unauthorised use of his patented invention by a State-owned enterprise had violated his right to the peaceful enjoyment of his possessions, as provided by Article 1 of Protocol No. 1 of the Convention.
Before elaborating the details of assessment made by the Court (ECHR), it will be appropriate to remind that the objections raised by the Government, acting for and on behalf of the defendant Republic of Turkey, in respect of the conditions of acceptability of the application as cited in Article 35 of the Convention have been broadly discussed in the decision of the Court, though they remain outside perspective of the intellectual property law which constitutes the main theme of this article.
First of all, the Government argued that the application filed to the Court was incompatible in person (ratione personae) with the provisions of Article 1 of the Protocol. This argument was based on the grounds that though the Applicant has obtained a patent protection for the subject invention, Çaykur had a right of precedence in reliance upon its right of prior use, as also demonstrated and proven by various court judgments, and also that the Applicant’s patent, which had been due to expire in 2011, has actually expired in 2008, owing to the Applicant’s failure to pay the required patent fees, and for this reason, the Applicant did not have a patent right and accordingly, did not have a legitimate expectation as well.
With respect to the aforesaid objection, the Court (ECHR) noted that the subject patent right in dispute was indeed existing and valid until the year 2008 when it expired. And given that the continued use of the patented invention by Çaykur by infringing the patent rights during this validity time entitles and empowers the patent owner (Applicant) to take legal actions against such use within the legislative framework, the victim status of the Applicant is unequivocally obvious. Now and therefore, it may easily be stated that the legitimate expectation does not only arise out of an existing right of ownership (title), and that the Applicant had a legitimate right to claim and request respect to be shown to its right of ownership (patent right) against the acts of infringement committed throughout the validity time of his patent.
As regards its argument of the application’s incompatibility in subject matter (ratione materiae), the Government submitted that although Çaykur was a State economic undertaking founded under a law, it was indeed subject to the provisions of private law and it operated autonomously in accordance with commercial rules, without enjoying any monopoly, and for this reason, the present application concerned a dispute between two private parties, and therefore, did not fall within the scope of Article 1 of the Protocol. At this point, for enforcement of Article 1 of the Protocol, it is essential to determine the negative obligation of the State in relation with this lawsuit. Within the frame of the right to property, the negative obligation of the State is not to make any unfair interferences to properties and possessions of individuals. 5 In the present case, the Court has concluded that the State should be held liable within the frame of the Convention in respect of infringement of the patent right by Çaykur in the dispute in hand. In coming to this conclusion, the Court has taken into consideration that Çaykur was a State economic undertaking founded by law and wholly owned by the State, and even Çaykur’s investment plan covered by its argument of prior use regarding the invention was under the control and supervision of the State. Hence, Çaykur’s being subject to the provisions of private law and operating autonomously in the relevant market together with other private enterprises in accordance with commercial rules, were not deemed sufficient to relieve the State from its liabilities and obligations arising out of the Convention.
In respect of examination of the application in merits, the Court has, first of all, declared that Article 1 of the Protocol covers also intellectual property rights, as clearly accepted by it also in its precedents. Accordingly, it was determined that Çaykur has started to use the system covered by the invention a short time before the Applicant has taken his invention under protection by a certificate of invention, and that this use continued without permission or authorization during the protection of invention between 1991 and 2008, and that this use constituted an interference made to peaceful enjoyment of the property rights. Now and therefore, it is emphasized that any interference by a public authority with the peaceful enjoyment of properties and possessions can be deemed legitimate only if and to the extent such interference satisfies the condition of lawfulness. As a matter of fact, the second sentence of first paragraph of Article 1 authorizes a deprivation of “possessions” only “subject to the conditions provided for by the law”, and the second paragraph thereof recognizes that States have the right to control the use of property by enforcing “laws”.6
In the light of these principles, it is determined that the local courts have relied the interference to the patent right of the Applicant upon the right of prior use regulated by Article 77 of the Decree Law no. 551 on the Protection of Patent Rights. This concept which has been introduced to positive law first by the Decree Law no. 551 on the Protection of Patent Rights and has also been set down in Article 87 “Rights Arising out of Prior Use” of the Law no. 6769 on Industrial Property Rights constitutes one of the limitations of patent right. That is why third parties who use or make serious preparations for use of patent in good faith prior to the patent application date / date of the right of priority and precedence are permitted to use the same. This law provision indeed aims within the frame of the principle of equity to protect the good faith of third parties who carry out researches regarding the same invention and use the invention in good faith beyond knowledge of the inventor before the patent right is duly gained. 7
However, the Court has drawn attention to the lack of any clause regarding the right of prior use in the Law on Certificates of Invention dated 1879 which was current in the year 1991 when Çaykur has started to use the invention covered by the patent in the existing case. Temporary Article 1 of the Decree Law no. 551 referring to enforcement of provisions of prior laws provides that the patent applications filed prior to the effective date of the Decree Law no. 551 will be governed by and subject to the pertinent provisions of the law which was current as of the date of application. Now and therefore, it is concluded that the limitations on the right of prior use imposed by the Decree Law no. 551 will not be applicable and enforceable for inventions for which a patent application is filed during the validity time of the Law on Certificates of Invention, and thus, Article 77 will not act retrospectively. Within this framework, the Court has cited that as of the date of first use by Çaykur, there was no legal ground limiting the rights of patent owner relating to his patent, and for this reason, any interference made to the right of the Applicant regarding peaceful enjoyment of his possessions can by no means be considered to be legitimate within the meaning of Article 1 of the Protocol.
The Court has determined right of prior use was not included in the law current as of the date of patent application, and that the provision contained in the Decree Law no. 551 is not preferred by the legislator to act retrospectively through temporary articles. Nonenforcement of the new law provision in the concrete case is important also for showing respect to the rights acquired and vested during the validity time of the prior law and for application of the principle of legal certainty and security. Thus, an interference made by a State economic undertaking wholly owned by the State and determined to be under management, control and supervision of the State to the property rights of the Applicant during the validity time of his patent is an interference which conflicts the Convention and leads to a liability of the State.