The Constitutional Court Decided that the Method of the Net Income of the Infringer in the Calculation of Lost Profits is not Contrary to the Constitution

The Constitutional Court has examined the request for annulment of Article 151/2-b of the Industrial Property Law No. 6769 (“IPL”). Upon examination, it was decided that regulating the net profit obtained by the infringer of industrial property rights as one of the methods of calculating lost profits is not contrary to the Constitution.

The Constitutional Court’s decision (“Decision”) with case number 2024/176 and decision number 2025/42 was published in the Official Gazette dated 06 May 2025 and numbered 32892.

The provision subject to the Decision is Article 151/2-b IPL as follows:

‘(2) The lost profits shall be calculated in accordance with one of the following methods, at the discretion of the owner of the rights that have been infringed:

…

b) The net profits obtained by the infringer of the industrial property right.’

The amount that may be claimed in a material damages lawsuit filed by the party whose industrial property right has been infringed includes actual loss and lost profits, in accordance with Article 151/1 of the IPL.

Pursuant to Article 151/2 of the IPL, the party whose industrial property right has been infringed may choose one of three methods for calculating lost profits for seen in the Article. These methods include the net profit obtained by the infringer of the industrial property right in question, the potential income that the right holder would have earned if the competition had not existed, and the potential license fee that would have been paid if a license agreement had been concluded in accordance with the law.

In the application for annulment filed with the Constitutional Court, it was claimed that the method of calculating the net profit obtained by the infringer of the industrial property right was contrary to the property right and the right to seek redress as stipulated in Articles 35 and 36 of the Constitution.

The Constitutional Court stated in its decision that the provision ordering the payment of both actual damages and lost profits to the party whose rights were violated constitutes a conflict between the property rights of the rights holder and the infringer. In this context, an assessment of the balance of interests must be made, taking into account the severity of the parties’ actions and all the opportunities available to them.

Decision states that the balance of interests is ensured by Article 151/3 of the IPL:

“In calculating the lost profits, factors such as the economic importance of the industrial property right, the number, duration, and type of licenses related to the industrial property right at the time of the infringement, and the nature and extent of the infringement shall be taken into account.”

In this context, the court applying the provision sought to be annulled shall first determine the net profit obtained by the infringer and then determine the lost profits by taking into account the criteria set forth in Article 151/3 of the IPL and the general principles of compensation law.

It has been decided that this regulation ensures a balance of interests and does not impose an excessive burden on the infringer.

For the reasons explained above, the request for the annulment of Article 151/2-b of the IPL has been rejected on the grounds that the provision is not contrary to the Constitution.

You can access the full text of the Constitutional Court’s decision through this link (Only available in Turkish).