WHAT IS CORPORATE LAW?
Corporate Law is a law field within the scope of commercial law that embodies norms regarding the establishment, merger, division, acquisition, conversion, and dissolution of a company and examines the legal relations regarding commercial companies.
Corporate Law is regulated under the Turkish Commercial Code No. 6102. According to provision of Article 124 of the Turkish Commercial Code No. 6102: Commercial companies consist of;
- Unlimited Liability Company
- Commandite Company
- Joint-Stock Company
- Limited Company
- Cooperative Company.
In this Code, the Unlimited Liability Companies and Commandite Companies are defined as Partnership Company and Joint Stock Company, Limited Company and Commandite Companies in which the capital is divided into shares are defined as "Stock Corporation"
Companies are separately classified in terms of their real and legal personality, duty of their share-holders, capital structure and liabilities.
In this article, we are going to mention the assignment of registered trade-marks that can be brought as assets to Joint Stock and Limited Companies by establishing a collusion transaction and the legal sanctions accordingly.
First of all, Joint-stock companies and Limited companies, which are both capital companies, can be established by at least one or more real or legal persons. Exceptional cases regarding the capital amount, capital structure and shareholder liabilities of company are reserved. Joint-stock and Limited companies may bring assets to the company including limited real rights, intellectual property rights and artificial environments which are valuable and can be assigned and which are not subject to an attachment or caution.
Intellectual property rights are regulated under Industrial Property Code numbered 6769 and listed as trade-marks, geographical indications, designs, patents, utility models and traditional products. In order to bring above-mentioned intellectual properties as assets to the company, these must be registered, otherwise they cannot be brought as assets.
The trade-mark, which is the subject of our article, can be subject to various legal transactions due to the increase in the economic value of the trade-mark right in the field of industrial property and its independence from commercial enterprises. Registered trade-mark can be subject to the assignment, descending, license of right of usage, pledge and attachment.
Therefore, trade-mark has an important place in the field of industrial property and for capital companies within the scope of Turkish Commercial Code and it seems that it has gained economic value independent of commercial enterprises.
A registered trade-mark, which has an economic value, can be assigned together with the commercial enterprise or separately. The trade-mark assignment agreement shall be written, without prejudice to exceptional circumstances, and shall be signed and registered by parties.
The trade-mark which is an important asset for the capital company, can be used for collusive transactions within the framework of fraudulent behaviors in a way which cause the company to be stripped of or reduction in its assets or cause the partners to deceive each other.
WHAT IS MEANT BY COLLUSIVE TRANSACTIONS?
It is defined in the Article 19 of Turkish Code of Obligations numbered 6098 as "The true and common intention of the parties should be taken into consideration in the assessment and interpretation of the type or terms of an agreement, disregarding any expression which may have been used either mistakenly or so as to disguise true intention of the parties."
(2) Debtor cannot plea against a third party, who has the right to claim depending on a written recognition of debt, that the transaction is collusive.
There are two types of collusion within the scope of Turkish Law as absolute and relative collusion. Absolute collusion is a secret agreement that does not comply with parties' wills and creating no obligation. And relative collusion is executing another agreement to keep the real agreement between the parties in secret. In that case, collusion is that "the parties seem to make a legal action that they do not really want to do", with the intention of deceiving third parties.
These two types of collusions are also used within the scope of commercial law. The real purpose is to provide unfair advantage to themselves or third parties with the intention of stripping the company of its assets or reducing its assets. Company shareholders may conduct collusive transactions against the creditors jointly, or against other share-holders by abusing their signature and representative rights to establish and unfair transaction to deceive other party in relation to the dispute between them.
WHAT IS THE LEGAL SANCTION FOR THE COLLUSIVE TRANSACTION?
If the assigned asset of the company is a registered trade-mark, the invalidation of the trademark assingment agreement may be requested within the scope of Intellectual and Industrial Rights. However, for the annulment of the trade-mark assignment, it shall be proved by the applicant that the concrete data suitable for proving the level of awareness and distinctiveness of the trademark, the legal benefit in filing the lawsuit, the bad faith of the share-holder or debtor who initiated the collusive transaction, and that they acted with the intention of damaging the company or third parties.
In the presence of these requirements, if the court is convinced that the assignment of the trademark has been collusively made, it may decide on the cancellation / invalidation of this trade-mark assignment agreement and its deletion from the Turkish Patent and Trademark Office.
The compensation and penalty rights of the parties regarding the matter are reserved. In the verdict of the 11th Civil Chamber of the Supreme Court Case No. 2010/9098 - Decision No. 2010/10255, dated 14.10.2010;
"... The decision of the Court regarding the annulment of the assignment of trade-mark labeled "Eser İnşaat ve Ticaret A.Ş. + Figure" and the deletion of the registration from Turkish Patent Institute, given on the grounds that it is obvious according to Article 321 and 443/2 of Turkish Commercial Code, in this case, Ilhan, who uses authority on behalf of the board of directors, does not have the authority to transfer the trademark used by the plaintiff company while providing its goods and services, and that this authority belongs to the general assembly. It is also decided accordingly that the case is accepted because the trade-mark subject to the case also includes the trade name of the plaintiff company and has vital importance for the existence of the company, moreover, the transfer of the aforementioned trade-mark to the defendant company cannot be deemed in accordance with the obligation of loyalty and care of İlhan who is a manager in both companies, has been approved by our Chamber upon the appeal of defendant's attorney."
In conclusion, as a result of the judgments made by the Civil Court of Intellectual and Industrial Rights, the disputes have been brought to the Supreme Court and it is ensured that the important assets of the company cannot be transferred without the decision of the general assembly, and the relevant trademark cannot be transferred to third parties or be subjected to commercial transactions without the consent or approval of the general assembly.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
