Turkey: Turkey introduces mandatory mediation for money-related IP disputes
Pursuant to the recent Code of Commencement of Execution Proceedings in Monetary Receivables Arising from Subscription Agreements (the Code) published in Official Gazette dated December 19 2018, mediation is now mandatory for commercial receivables claims. In line with Article 20 of the Code, Article 5/A is incorporated into the Turkish Commercial Code (TCC). This requires mediation for commercial receivables claims, in which compensation or payment of a certain amount is requested. Accordingly, mediation is a pre-condition of bringing a lawsuit before the courts. This recent development was implemented on January 1 2019.
Though the aforementioned Article 5/A does not clearly include IP-related disputes, according to Article 4/d of the TCC, civil suits regulated under IP-related codes are deemed as commercial where a request for compensation or payment of a certain amount is sought, for instance disputes arising from the price of licence agreements or transfer of IP rights and compensation due to IP right infringements etc.
Before mediation was stipulated as a pre-condition for commercial receivables claims, the Law on Labour Courts made mediation mandatory from January 1 2018 for labour disputes arising from an employment contract in which compensation or re-employment is sought. According to statistics shared by the Ministry of Justice, 65% of disputes were closed by mandatory mediation between January 2 2018 and May 27 2018. As a result of mandatory mediation introduced for commercial receivables actions from 2019, a notable reduction in commercial courts' workload is expected/hoped for as was achieved for labour disputes. It is also worth mentioning that mediation was first incorporated into the Turkish legal system as a discretionary alternative dispute resolution method in 2013 by Law no. 6325 on Mediation in Civil Disputes.
Though mediation is a relatively new concept for dispute resolution, it is possible to say that it has rapidly progressed in Turkey. Mediation offers parties a chance to reach an amicable solution by spending reasonable effort, time and cost and as a consequence was made mandatory first for labour and then commercial receivables actions, including some IP related-matters. However, still, in a certain number of cases it is considered a burdensome procedure that has to be completed before reaching the main stage – legal action.
In time, mediation might become mandatory for other types of IP disputes. Though it is expected that mandatory mediation will decrease the workload of IP courts, the impact of this new development cannot clearly be predicted, since it is conceptually new for Turkey where a culture of litigation dominates. We will wait and see what this brand new update brings to Turkish IP law.