G.R. No.

L-24295 September 30, 1971

GENERAL GARMENTS CORPORATION v. THE
DIRECTOR OF PATENTS and PURITAN
SPORTSWEAR CORPORATION, respondents.
The GENERAL GARMENTS CORPORATION,
organized and existing under the laws of the
Philippines, is the owner of the trademark "Puritan,"
under Registration No. 10059 issued on November
15, 1962 by the Philippine Patent Office, for assorted
men's wear, such as sweaters, shirts, jackets,
undershirts and briefs.
On March 9, 1964 the PURITAN SPORTSWEAR
CORPORATION, organized and existing in and
under the laws of the state of Pennsylvania, U.S.A.,
filed a petition with the Philippine Patent Office for the
cancellation of the trademark "Puritan" registered in
the name of General Garments Corporation, alleging
ownership and prior use in the Philippines of the said
trademark on the same kinds of goods, which use it
had not abandoned; and alleging further that the
registration thereof by General Garments Corporation
had been obtained fraudulently and in violation of
Section 17(c) of Republic Act No. 166, as amended,
in relation to Section 4(d) thereof.
On March 30, 1964 General Garments Corporation
moved to dismiss the petition on several grounds, all
of which may be synthesized in one single issue:
whether or not Puritan Sportswear Corporation,
which is a foreign corporation not licensed to do
business and not doing business in the
Philippines, has legal capacity to maintain a suit
in the Philippine Patent Office for cancellation of
a trademark registered therein.
The Director of Patents denied the motion to
dismiss on August 6, 1964, and denied likewise the
motion for reconsideration on March 5, 1965,
whereupon General Garments Corporation,
hereinafter referred to as petitioner, filed the instant
petition for review.
A foreign corporation which has
never done ... business in the
Philippine Islands and which is
unlicensed and unregistered to
do business here, but is widely
and favorably known in the
Islands through the use therein
of its products bearing its
corporate and trade name has a
legal right to maintain an action
in the Islands.
xxx xxx xxx
The purpose of such a suit is to protect its reputation,
corporate name and goodwill which has been
established, through the natural development of its
trade for a long period of years, in the doing of which
it does not seek to enforce any legal or contract
rights arising from, or growing out of any business
which it has transacted in the Philippine Islands.
The right to the use of the corporate or trade
name is a property right, a right in rem, which it
may assert and protect in any of the courts of the
world even in jurisdictions where it does not
transact business just the same as it may
protect its tangible property, real or personal
against trespass or conversion.
Petitioner argues that the ruling in Western
Equipment has been superseded by the later
decision of this Court inMentholatum Co., Inc. v.
Mangaliman (1941), 72 Phil. 524, where it was held
that inasmuch as Mentholatum Co., Inc. was a
foreign corporation doing business in the Philippines
without the license required by Section 68 of the
Corporation Law it could not prosecute an action for
infringement of its trademark which was the subject
of local registration. The court itself, however,
recognized a distinction between the two cases, in
that in Western Equipment the foreign corporation
was not engaged in business in the Philippines, and
observed that if it had been so engaged without first
obtaining a license "another and a very different
question would be presented."
Parenthetically, it may be stated that the ruling in the
Mentholatum case was subsequently derogated
when Congress, purposely to "counteract the effects"
of said case, enacted Republic Act No. 638, inserting
Section 21-A in the Trademark Law, which allows a
foreign corporation or juristic person to bring an
action in Philippine courts for infringement of a mark
or trade-name, for unfair competition, or false
designation of origin and false description, "whether
or not it has been licensed to do business in the
Philippines under Act Numbered Fourteen hundred
and fifty-nine, as amended, otherwise known as the
Corporation Law, at the time it brings complaint."
Petitioner's last argument is that under Section 37 of
the Trademark Law respondent is not entitled to the
benefits of said law because the Philippines is not a
signatory to any international treaty or convention
relating to marks or tradenames or to the repression
of unfair competition.
As correctly pointed out by respondents, this
provision was incorporated in the law in anticipation
of the eventual adherence of the Philippines to any
international convention or treaty for the protection of
industrial property. It speaks of persons who are
nationals of domiciled in, or have a bona fide or
effective business or commercial establishment in
any foreign country, which is a party to any
international convention or treaty relating to industrial
property to which the Philippines may be a party. In
other words, the provision will be operative only when
the Philippines becomes a party to such a convention
or treaty. Regardless of Section 37, aliens or foreign
corporations are accorded benefits under the law.
Thus, under Section 2, for instance, the trademarks,
tradenames and service-marks owned by persons,
corporations, partnerships or associations domiciled
in any foreign country may be registered in the
Philippines, provided that the country of which the
applicant for registration is a citizen grants bylaw
substantially similar privileges to citizens of the
Philippines.
WHEREFORE, the petition is dismissed, and the
resolution of the Director of Patents dated August 6,
1964 is affirmed, with costs.



La Chemise Lacoste vs. Fernandez
GR 63796-97, 21 May 1984; First Division,
Gutierrez Jr. (J)

Facts: La chemise Lacoste is a French
corporation and the actual owner of the
trademarks Lacoste, Chemise Lacoste,
Crocodile Device and a composite mark
consisting of the word Lacoste and a
representation of a crocodile/alligator, used on
clothings and other goods sold in many parts of
the world and which has been marketed in the
Philippines (notably by Rustans) since 1964.

In 1975 and 1977, Hemandas Q. Co. was
issued certificate of registration for the
trademark Chemise Lacoste and Q Crocodile
Device both in the supplemental and Principal
Registry. In 1980, La Chemise Lacoste SA filed
for the registration of the Crocodile device
and Lacoste. Games and Garments
(Gobindram Hemandas, assignee of
Hemandas Q.Co.) opposed the registration of
Lacoste. In 1983, La Chemise Lacoste filed
with the NBI a letter-complaint alleging acts of
unfair competition committed by Hemandas
and requesting the agencys assistance. A
search warrant was issued by the trial court.
Various goods and articles were seized upon
the execution of the warrants. Hemandas filed
motion to quash the warrants, which the court
granted. The search warrants were recalled,
and the goods ordered to be returned. La
Chemise Lacoste filed a petition for certiorari.

Issue: Whether the proceedings before the
patent office is a prejudicial question that need
to be resolved before the criminal action for
unfair competition may be pursued.

Held: No. The proceedings pending before the
Patent Office do not partake of the nature of a
prejudicial question that must first be definitely
resolved. The case, which suspends the
criminal action, must be a civil case, not a mere
administrative case, which is determinative of
the innocence or guilt of the accused. The
issue whether a trademark used is different
from anothers trademark is a matter of defense
and will be better resolved in the criminal
proceedings before a court of justice instead of
raising it as a preliminary matter in an
administrative proceeding.

Inasmuch as the goodwill and reputation of La
Chemise Lacoste products date back even
before 1964, Hemandas cannot be allowed to
continue the trademark Lacoste for the
reason that he was the first registrant in the
Supplemental Register of a trademark used in
international commerce. Registration in the
Supplemental Register cannot be given a
posture as if the registration is in the Principal
Register. It must be noted that one may be
declared an unfair competitor even if his
competing trademark is registered. La Chemise
Lacoste is world-renowned mark, and by virtue
of the 20 November 1980 Memorandum of the
Minister of Trade to the director of patents in
compliance with the Paris Convention for the
protection of industrial property, effectively
cancels the registration of contrary claimants to
the enumerated marks, which include
Lacoste.


Kabushi Kaisha Isetan vs. lAC
GR 75420, 15 November 1991; Second
Division, Gutierrez Jr., (J)

Facts: Kabushi Kaisha Isetan is a Japanese
corporation, and owner of the trademark
Isetan and the Young leave design. Isetann
Department Store, on the other hand, is a
domestic corporation, and owner fo the
trademark Isetann and clover design. In
1980, Kabushi Kaisha Isetan field petitions for
the cancellation of the supplemental
registration of Isetann with the Philippine
Patent Office. It also filed for the cancellation of
the mark Isetan from the corporate name of
Isetann Department Store with the SEC. Both
the SEC and the Director of Patents,
eventually, ruled against Kabushi Kaisha
Isetan. It appealed to the intermediate
Appellate Court, which denied the petition for
being filed out of time.

Issue: Whether Kabushi Kaisha Isetan has the
right to seek for the cancellation of the word
Isetan from the corporate name of Isetann
Department Store.

Held: No. A Fundamental principle in
Trademark Law is that the actual use in
commerce in the Philippines is a pre-requisite
to the acquisition of ownership over a
trademark or a tradename. Kabushi Kaisha
Isetan has never conducted any business in
the Philippines. It has never promoted its
trademark or tradename in the Philippines. It
has absolutely no business goodwill in the
Philippines. It is unknown to Filipinos except
the very few who may have noticed it while
traveling abroad. It has never paid a single
centavo of tax to the Philippine Government.
Under the law, it has no right to the remedy it
seeks. Isetann Department Store is entitled to
use its trademark in the Philippines.


PHILIP MORRIS ET AL V CA

Facts: Petitioners Philip Morris et al are US
companies not doing business in the
Philippines. As registered owners "MARK VII",
"MARK TEN", and "LARK" petitioners asserted
that private respondent Fortune Tobacco
Corporation has no right to manufacture and
sell cigarettes bearing the allegedly identical or
confusingly similar trademark "MARK" in
contravention of Section 22 of the Trademark
Law, and should be precluded during the
pendency of the case from performing the acts
complained of via a preliminary injunction.
Respondent admitted petitioners registration
subject to the affirmative and special defense
on misjoinder of party plaintiffs. Respondent
further alleged that it has been authorized by
the BIR to manufacture and sell cigarettes
bearing the trademark MARK and that it is a
common word which cannot be exclusively
appropriated.

Issue: WON the treaty obligation under Article
2 of the Paris Convention (of which the
Philippines is a signatory and ratified by
Senate) is sufficient basis for issuance of writ of
preliminary injunction.

Held: No. Following universal acquiescence
and comity, our municipal law on trademarks
regarding the requirement of actual use in the
Philippines must subordinate an international
agreement inasmuch as the apparent clash is
being decided by a municipal. Withal, the fact
that international law has been made part of
the law of the land does not by any means
imply the primacy of international law over
national law in the municipal sphere. Under the
doctrine of incorporation as applied in most
countries, rules of international law are given a
standing equal, not superior, to national
legislative enactments.

* Petitioners may have the capacity to sue for
infringement irrespective of lack of business
activity in the Philippines on account of Section
21-A of the Trademark Law but the question
whether they have an exclusive right over their
symbol as to justify issuance of the
controversial writ will depend on actual use of
their trademarks in the Philippines in line with
Sections 2 and 2-A of the same law. It is thus
incongruous for petitioners to claim that when a
foreign corporation not licensed to do business
in Philippines files a complaint for infringement,
the entity need not be actually using its
trademark in commerce in the Philippines.
Such a foreign corporation may have the
personality to file a suit for infringement but it
may not necessarily be entitled to protection
due to absence of actual use of the emblem in
the local market.
NOTE: infringement issue not discussed
extensively issue focused on lifting of writ-
mere interlocutory order.


Philip Morris vs. Court of Appeals
[GRN 91332 July 16, 1993.]
MELO, J.:

Facts:
Petitioners Philip Morris, Inc., Benson and
Hedges (Canada), Inc., and Fabriques of
Tabac Reunies, S.A., are ascribing whimsical
exercise of the faculty conferred upon
magistrates by Section 6, Rule 58 of the
Revised Rules of Court when respondent Court
of Appeals lifted the writ of preliminary
injunction it earlier had issued against Fortune
Tobacco Corporation, herein private
respondent, from manufacturing and selling
"MARK" cigarettes in the local market. Banking
on the thesis that petitioners' respective
symbols "MARK VII", 'MARK TEN", and
"MARK", also for cigarettes, must be protected
against unauthorized appropriation,
Philip Morris, Incorporated is a corporation
organized under the laws of the State of
Virginia, United States of America, and does
business at 100 Park Avenue, New York, New
York, United States of America. The two other
plaintiff foreign corporations, which are wholly-
owned subsidiaries of Philip Morris, Inc., are
similarly not doing business in the Philippines
but are suing on an isolated transaction.
Plaintiffs-petitioners asserted that defendant
Fortune Tobacco Corporation has no right to
manufacture and sell cigarettes bearing the
allegedly identical or confusingly similar
trademark' Plaintiffs admit in the complaint that
"xxx they are not doing business in the
Philippines and are suing on an isolated
transaction xxx'. This simply means that they
are not engaged in the sale, manufacture,
importation, expor[tation and advertisement of
their cigarette products in the Philippines.
Issue:
Whether or not there has been an invasion o
plaintiffs' right of property to such trademark or
trade name.
Whether of not there is a violation of the
International Agreement on protection of
trademarks.
Held:
There is no proof whatsoever that any of
plaintiffs products which they seek to protect
from any adverse effect of the trademark
applied for by defendant, is in actual use and
available for commercial purposes anywhere in
the Philippines.
To sustain a successful prosecution of their suit
for infringement, petitioners, as foreign
corporations not engaged in local commerce,
rely on Section 21-A of the Trademark Law
reading as follows:
SECTION 21-A. Any foreign corporation or
juristic person to which a mark or trade-name
has been registered or assigned under this act
may bring an action hereunder for infringement,
for unfair competition, or false designation of
origin and false description, whether or not it
has been licensed to do business in the
Philippines under Act Numbered Fourteen
hundred and fiftynine, as amended, otherwise
known as the Corporation Law, at the time it
brings complaint: Provided, That the country of
which the said foreign corporation or juristic
person is a citizen or in which it is domiciled, by
treaty, convention or law, grants a similar
privilege to corporate or juristic persons of the
Philippines. (As inserted by Sec. 7 of Republic
Act No. 638.) to drive home the point that they
are not precluded from initiating a cause of
action in the Philippines on account of the
principal perception that another entity is
pirating their symbol without any lawful
authority to do so.
A fundamental principle of Philippine
Trademark Law is that actual use in commerce
in the Philippines is a pre-requisite to the
acquisition of ownership over a trademark or a
tradename. Adoption alone of a trade, ark
would not give exclusive right thereto. Such
right grows out of their actual use. Adoption is
not use. One may make advertisements, issue
circulars, give out price lists on certain goods;
but these alone would not give exclusive right
of use. For trademark is a creation of use.
The records show that the petitioner has never
conducted business in the Philippines. It has
never promoted its tradename of trademark in
the Philippines. It is unknown to Filipinos
except the very few who may have noticed it
while travelling abroad. It has paid a single
centavo of tax to the Philippine government.
Under the law, it has no right to the remedy it
seeks.
In other words, petitioners may have the
capacity to sue for infringement irrespective of
lack of business activity in the Philippines on
account of Section 21-A of the Trademark Law
but the question of whether they have an
exclusive right over the'symbol as to justify
issuance of the controversial writ will depend
on actual use of their trademarks in the
Philippines in line with Sections 2 and 2-A of
the same law. It is thus incongruous on
petitioners to claim that when a foreign
corporation not licensed to do business in the
Philippines files a complaint for infringement,
the entity need not be actually using its
trademark in commerce in the Philippines.
In view of the explicit representation of
petitioners in the complaint that they are not
engaged in business in the Philippines, it
inevitably follows that no conceivable damage
can be suffered by them not to mention the
foremost consideration heretofore discussed on
the absence of their "right" to be protected.
Following universal acquiescence and comity,
our municipal law on trademarks regarding the
requirement of actual use in the Philippines
must subordinate an international agreement
inasmuch as the apparent clash is being
decided by a municipal tribunal (Mortensen vs.
Peters, Great Britain, High Court of Judiciary of
Scotland, 1906, 8 Sessions 93; Paras,
International Law and World Organization,
1971 Ed., p. 20). Withal, the fact that
international law has been made part of the law
of the land does not by any means imply the
primacy of international law over national law in
the municipal sphere. Under the doctrine of
incorporation as applied in most countries,
rules of international law are given a standing
equal, not superior, to national legislative
enactments (Salonga and Yap, Public
International Law, Fourth ed., 1974, p. 16).




Bata Industries v CA Digest

G.R. No. L-53672, May 31, 1982

Facts:
The respondent New Olympian Rubber
Products sought to register the mark "BATA"
for casual rubber shoe products, alleging it had
used the said mark since the 1970s. The
petitioner, a Canadian corporation opposed
with its allegations that it owns and has not
abandoned said trademark. The petitioner has
no license to do business in the Philippines and
the trademark has never been registered in the
Philippines by any foreign entity. Bata
Industries does not sell footwear under the said
trademark in the Philippines nor does it have
any licensing agreement with any local entity to
sell its product.

Evidence show that earlier, even before the
World War II, Bata shoes made by Gerbec and
Hrdina (Czech company) were already sold in
the country. Some shoes made by the
petitioner may have been sold in the
Philippines ntil 1948. On the other hand,
respondent spent money and effort to
popularize the trademark "BATA" since the
70's. Moreover, it also secures 3 copyright
registrations for the word "BATA". The
Philippine Patent Office (PPO) dismissed the
opposition by the petitioner while the Court of
Appeals (CA) reversed said decision. However,
a 2nd resolution by the CA affirmed the PPO
decision.

Issue: Does the petitioner have the right to
protect its goodwill alleged to be threatened
with the registration of the mark?

NO. Bata Industries has no Philippine goodwill
that would be damaged by the registration of
the mark.
Any slight goodwill obtained by the product
before World War II was completely abandoned
and lost in the more than 35 years that passed
since Manila's liberation from Japan. The
petitioner never used the trademark either
before or after the war. It is also not the
successor-in-interest of Gerbec & Hrdina and
there there was no privity of interest between
them, Furthermore, the Czech trademark has
long been abandoned in Czechoslovakia.