M&A Activities and Intellectual Property Protection
Despite the economic crisis in neighbouring Europe, Turkey’s economy was the second fastest growing economy in the G20 behind China with growth of 8.5% in 2011 following growth of 9% in 2010. Turkey remained strong throughout the financial crisis of 2008 and is expecting growth of 2 – 2.5%. At this point, protection and enforcement of IP rights in Turkey are also of great importance. Turkey is increasingly attracting the attention of trademark owners.
Over the past decade Turkey has implemented bold economic reforms, these have created a stable environment for growth and coupled with the country’s strategic location between Europe, Asia and the Middle East, have contributed to making Turkey the 16th largest economy in the world. High inflation and the large current account deficit are a growing concern. The deficit has narrowed in recent months but still stands at 10% of GDP and the central bank expects that inflation will be down to 6.5% by the end of the year. This is achievable but it will depend on policy staying tight or even tightening further to ensure that inflation does not rise. Turkey’s Inflation rate had dropped from an average 75% in the 1990s to 11% today, public debt had been halved, and banking sector reformed. One key concern for Turkey is the nation’s unemployment rate, which sits at 10.3%. This is linked to a number of issues such as high labour costs and lack of competitive advantage in the labour market.
We predict that as the global economy races towards an information-based economy and now involves much severe competition, intellectual property will continue to play an increasing role as the driving force behind future merger and acquisition activity.
Since Turkey becomes a rising star at the Europe-Asia bridge, at this point, protection and enforcement of IP rights in Turkey are of great importance. Turkey is increasingly attracting the attention of trademark owners. In 2011, almost 120,000 trademark applications were filed and Turkey has been ranked number one for trademark applications in Europe, ahead of France, Germany and the UK.
However, on the other hand, it is unexpected to see that foreign companies do not take advantage of patent protection as much as the domestic applicants did in Turkey since the annual filing total number was about 10,000.
Meanwhile, it is worth noting that a new Intellectual Property law package is expected to be issued in a few months. On the other hand, the Ministry of Justice recently announced a new judicial reform package that, among many other things, introduces extra measures to lighten the heavy workload of the judiciary and to produce a “revolutionary outcome” under which the average length of trials would drop to one year for civil proceedings, and to 18 months to two years for criminal proceedings, including their appeals, within a period of about two years. Further details and the effect on trademark proceedings will be understood when the package is fully effected.
(Doing Business in Turkey, Acquisition International Magazine)
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